Winners And Losers From The Demise Of The Wheat Board

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So much has been written about the fate of the Canadian Wheat Board that one approaches the topic with trepidation. The government has made it clear that the board’s days as a monopoly are numbered and I expect the feds are well along with the enabling legislation to strip the CWB of its powers.

In Alberta, the ruling PC party long ago made the end of the CWB government policy. To promote their position, they have engaged in mischief to discredit the board, including nuisance legal actions, ministerial grandstanding, grants to anti-CWB groups, negative ad campaigns and biased statistical battles. It was part of a strategy that included the elimination of the old Crow Rate and the feed grain subsidy. The latter was even fought with the feed grain offset, a curious Alberta subsidy to offset a federal subsidy.

The idea was that the unfettered free market provided producers with the best pricing opportunities. That’s fair enough, but it does cause one to ponder as to why then are the most stable and profitable commodities the supply-managed production sectors. I suspect that those in the much-diminished Alberta hog industry don’t think much of the free market either. But I digress.

In another life, I was a CWB permit book holder in the B.C. Peace River region. At that time I observed (and I believe it to be still true) that the more modest the producer and the farther from the U.S. border, the more they were a supporter of the CWB. Peace region growers suspected that they were all too easily forgotten in the big picture, hence they figured CWB pooling made them more equal to the large producers closer to markets and shipping points in central and southern Alberta.

When the Conservatives first came to power, I commented that it was time that the CWB make a proposal to radically reinvent itself, if for no other reason than to keep the Conservatives off balance. After all, times were changing and many of the other state marketing agencies in the world were being disbanded.

But that did not happen. Instead a vicious ideological war broke out that saw millions spent by both sides, which as expected made any compromise impossible. From that you just knew the Conservatives were going to extract retribution once they had the political power of a majority.

Hard to measure

The question always is with these sorts of fundamental changes, will it put another dollar in the producer’s pocket? That’s going to be impossible to gauge since there will be no CWB to compare with. I expect large growers will be signing delivery contracts directly with grain companies and processors, which will be of some benefit. Anxious wheat growers in the Peace region will get a rude awakening when faced with higher transportation costs imposed by free market buyers, and pooling will be a fond memory for northern growers. Growing wheat and malting barley in that area may be reduced or completely lost in favour of other crops. The market will decide.

The Alberta Barley Commission agrees there will be a transportation disadvantage for some, noting in a story in our last edition that barley growers living near malt plants will do better. Even the government’s own in-house agency, the Alberta Grains Council, in the same story tries to lower producer expectations, noting that markets may not be all that affected with the CWB change, but at least they will be more transparent and competitive between buyers.

That’s the hope anyway, but then there are few around who remember the exploitive free market conditions in the 1920s and ’30s that created the CWB in the first place. Yes, times and markets have changed, but history does have a habit of repeating itself.

What about south of the border? American wheat organizations have launched nine trade actions against Canadian imports, most of them instigated by the notorious North Dakota Wheat Commission. The CWB at a cost of millions defeated every challenge. All of that expertise will now be lost to fight off the next challenge which will surely arise after Canadian growers start to plug up American border elevators. In a story in this edition the response from the Montana grain industry is reviewed. They agree that a border area producer response is expected, at least on the short term. They also look forward to the demise of the CWB as they see it as a major competitor in their export markets (is there a message in that?).

One does wish that common sense would break out and the government would at least preserve the CWB as a national producer agency that has the ability to support grain-growing research, promote wheat and barley products at the national and international level, and most importantly to maintain and use their trade action expertise to protect Canadian producers at every level to fight the battles to come. All of this should be funded by a universal mandatory national checkoff on all wheat and barley. The national cattle and beef checkoff comes to mind as a precedent. However if the CWB is wiped out for good, wheat growers may come to live that old Dutch saying, “when you burn your butt you have to sit on the blisters.”

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Thequestionalwaysiswith thesesortsoffundamental changes,willitputanother dollarintheproducer’spocket?

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