Stephen Harper’s Conservative government is preparing to pass legislation to end the Canadian Wheat Board’s monopoly on exports and milling of prairie-grown wheat and barley.
“The Wheat Board was brought into place, basically, so that grain buyers wouldn’t take advantage of farmers,” explained Jo-Lene Gardiner of Manitoba Agriculture, Food, and Rural Initiatives, which is based out of Pilot Mound, MB.
From it’s offices in Winnipeg, the Canadian Wheat Board (CWB) markets Canadian grain to world markets and for domestic consumption.
Opinions among grain farmers are divided on the issue. As it stands, grain farmers in western Canada can only sell wheat and barley to the CWB. The Wheat Board therefore decides which varieties of wheat and barley farmers can grow, buys grain from farmers and markets it to buyers domestically and around the world.
One benefit to farmers under the current system is that payment of grain is meted out over a year period, and the CWB attempts to provide farmers with the best price possible for their grain by paying them the average price of grain on the world market over the year.
“If when you sell your wheat, [the] price is five dollars a bushel, and by the time the end of the year came along the price was nine dollars a bushel, under the new system you’re stuck with five dollars, end of story,” said Jan McIntyre, a mixed cattle and grain farmer near Cartwright, MB. “Under the Wheat Board, you would get the average price, which would be the difference between your five dollars and whatever the final average was.”
Currently, the CWB provides all grain farmers with the same price for their grain, “no matter if you have 100 bushels or 100,000,” said Gardiner. “If you have No. 1 wheat at 14 per cent protein, you would get the same price [per bushel] as the next guy. Everybody is treated equally under the system.”
“[The Wheat Board] takes a certain percentage [of wheat] right off the combine right to their elevator,” Derek Marvin told The Dominion. Marvin is a 31-year-old elementary school teacher in Winnipeg, but during the summer months leading up to harvest, he returns to his family’s farm in the rural municipality of Elton, MB, to help his father run their 2,300-acre operation.
“Without it, farmers are going to have to bring it back home in their own storage bins on the farm, and so you’re going to have to buy new bins and find more storage and find more space for it all,” he said. “A grain bin holds 40,000 bushels, and that’ll cost you $100,000. That’s like buying a house!”
Opponents of the CWB’s monopoly argue that farmers ought to have the right to market their own grain, and decide which varieties to grow and when.
“An open market will increase the number of buyers bidding on our wheat and barley,” federal Agriculture Minister Gerry Ritz said told reporters in October, according to the Globe & Mail. “Unlike what some people may claim, the sky will not fall in an open market. Instead, the sky will be the limit.”
“I think it’s going to be a positive change,” said Barry Critcher, who has been farming grain for 28 years. Critcher farms 3,200 acres between Dawson Creek and Fort St. John, BC, one of British Columbia’s most productive grain growing regions. “I think it’s going to be positive to my farm, because I can sell my grain to who I want, when I want, and I can do the things I want to do on my farm without having to worry about letting somebody else do the marketing for me.”
The prairie provinces have been experiencing a rural demographic shift since at least the 1970s, which kicked into high gear since the 1980s. Rural populations are diminishing, small towns are dying, and economic control over food systems is held by an increasingly smaller number of players, with money flowing out of small communities and into corporate headquarters, such as those of agribusiness giants Vittera and Cargill, in urban centers.
How will the changes to the CWB affect this demographic and economic transition?
“I think it will perpetuate the problem,” said Marvin, whose family has been farming grain in Elton, MB area for three generations. “It’s already to the point where rarely can a small family farm exist on its own. It needs other income. When I think of all the farms around my community, all the farmers who were farming smaller acreages than us have dropped off. They’ve sold a few acres to us, a few to the Hutterites, a few to some other neighbors, because it’s just too tough to keep up.”
While it is impossible at this juncture to confidently predict what effects the changes to the Canadian Wheat Board will have on farmers and rural communities, there is no doubt that grain farmers and farming communities in western Canada will have to adapt to the new economic reality—and fast.
Most expect that the proposed legislation will go through; if it does, as of August 1, 2012, the Canadian Wheat Board as we know it today will be gone.
Source: The Canadian National Newspaper
Join the Conversation… Are you in favour of the new legislation or do you think the Canadian Wheat Board should be allowed to keep their monopoly?