Wheat board monopoly ends
MORE OPTIONS OPEN UP Western farmers can choose buyers
I feel a great sense of relief that it’s over with
JEFF NIELSEN,
FARMER
As the clock ticked toward midnight Tuesday and the official end of the Canadian Wheat Board’s monopoly on the sale of western wheat and barley, Jeff Nielsen felt as if a load had been lifted from his shoulders.
“I feel a great sense of relief that it’s over with,” the Olds-area grain farmer said Tuesday.
Nielsen, who has long been an advocate for marketing choice in agriculture, is perhaps best known for being one of two Alberta directors who resigned from the Canadian Wheat Board in October 2011. He and Fairview-area grain farmer Henry Vos ran for the board in the hope of changing the CWB from the inside — but when it became apparent the board was determined to maintain its single-desk mandate, both Nielsen and Vos resigned in protest.
Fast forward 10 months, and a federal law passed late last year giving western farmers the freedom to sell their grain to whomever they choose has taken effect. Effective today, the Wheat Board is no more.
Nielsen said he feels vindicated.
“It’s each individual farmer’s right to manage their business the way they choose to manage their business. I don’t believe anybody should be telling me how to do that,” he said. Wheat and barley farmers in Western Canada have had to sell their grain through the Canadian Wheat Board since the 1940s. Under the new law, farmers still have the option to market their grain through the board, but now it will be a voluntary decision.
Nielsen said he and many other farmers have already started signing contracts for the new crop year, in anticipation of their new market freedom.
“We’ve seen a large rally in prices due to the U.S. drought, and we’re seeing a lot of farmers capturing that, signing contracts,” he said.
While many producer groups advocated for the change, some farmers are dreading it. Laurence Nicholson, who farms near Seven Persons southwest of medicine Hat, is a member of Friends of the Canadian Wheat Board — a group that is still waging a court battle over the way the Harper government stripped the agency of its marketing monopoly. They argue the federal government didn’t follow a law that required it to let grain farmers vote on the future of the wheat board.
Nicholson said most farmers don’t have the expertise to market their grain on their own, so without the marketing power of the single-desk CWB, they will be at the mercy of profit-motivated grain companies.
“I don’t think there are too many farmers who are going to be selling their wheat and durum to Japan and China directly — they’re going to be doing it through a grain company,” Nicholson said. “Grain companies are sellers, they’re not marketers. And as a farmer, I need marketers on the international market.”
Nicholson said his father was one of the prairie producers who pushed hard for the formation of the Canadian Co-operative Wheat Producers, the central selling agency that was created in 1924 and was a precursor to the CWB. He grew up listening to his father’s tales of what can happen when farmers are left to the whims of the market.
“He told me stories about going down elevator row, and if you had a bottle of whiskey you could get a better grade. He experienced that, and it was terrible,” Nicholson said. “We shouldn’t be throwing out the baby with the bathwater. I’m not opposed to change, but it should be change for the betterment of the farmer, not the betterment of the industry.”
Richard Phillips, executive director of the Grain Growers of Canada, said it’s too early to know how many Canadian farmers will use their new marketing freedom to cross the border in search of better prices in the United States.
“Traditionally, we’ve seen substantially higher prices in the U.S. than we have at certain times of the year in Canada, so there will be opportunities there,” Phillips said. “I expect we will see some interest from farmers who will, at a minimum, cross the line with some samples to do price comparisons.”
In Winnipeg on Tuesday, Canadian Wheat Board CEO Ian White refused to give details on how many farmers have signed contracts with the board, but said he still expects as much as 40 per cent of prairie wheat to be marketed through the board. He said farmers understand the advantages of the board’s close relationships with international clients as well as its practice of pooling wheat prices. Federal Agriculture Minister Gerry Ritz, speaking in Saskatoon on Tuesday, said the CWB has a five-year window during which the federal government will “backstop” it financially. But the board also has to come forward with a plan in the next two to three years on how it will move ahead, he said. He didn’t rule out privatization. “We’ve already had a couple of entities come forward saying that they would love to buy up the CWB already. … We’re not prepared to entertain that takeover that quickly,” said Ritz. “I think there’s some great roles for the CWB to play in the next two to three years and we’ll analyze it at that point, so there’s no rush.”