Dissolution of CWB costing farmers billions: CWBA

The dissolution of the Canadian Wheat Board (CWB) under former Prime Minister Stephen Harper is costing Canada's prairie farmers $3.25...

The dissolution of the Canadian Wheat Board (CWB) under former Prime Minister Stephen Harper is costing Canada’s prairie farmers $3.25 billion annually, according to the Canadian Wheat Board Alliance (CWBA).

According to a report by agricultural economist doctor Richard Gray from the University of Saskatchewan, private elevator companies have made $6.5 billion in profits off prairie farmers in the past two years.

“This represents fully half the annual value of the wheat and barley crop in Western Canada,” Ken Sigurdson, a member of the CWBA, said. “These losses will continue compounding the negative effects, including the loss of quality control and grain handling logistics, already felt in the grain industry.”

Sigurdson and others from the CWBA have called on the federal government to restore the CWB, citing these losses as unsustainable.

Under the CWB act, Canada’s prairie farmers sold their wheat and other similar crops to the CWB, who would then sell their product to the rest of the country and the world. This method of selling is known as single-desk marketing.

Another advantage of the CWB was the lack of first-come, first-serve mentality, which means farmers didn’t have to race to get their product to the market in the hopes it would sell immediately, rather than up to a year from harvest. With the CWB backed by the government, farmers were able to be paid immediately, even before the crop was sold, Forestburg’s Allen Oberg, the last chairman of the CWB before dissolution, said.

The equal delivery opportunity meant that farmers didn’t find themselves cash-strapped because of a bumper crop slowing down the movement of grain to market, such as what was experienced two years ago.

Oberg said he wishes the CWB was still in existence, as the service it provided to Canada’s prairie farmers was invaluable. At the time, though, not only did Canada’s federal government push for the dissolution of the CWB, so did some grain farmers.

“I think now that it’s been gone, some farmers may change their mind about the wisdom of removing the wheat board,” Oberg said.

While the CWBA has called for the restoration of the CWB, Oberg takes a more cautious approach to the idea.

“What I want to see is a vote, to let farmers actually show what farmers want,” he said. “The first thing is to make sure we have farmer support. Without it, there’s no point in pursuing it.”

Restoring the wheat board would require Canada – and others – to revisit agreements with the World Trade Organization and the North America Fair Trade Agreement (NAFTA), as well as potential trade agreements in Asia and the Trans Pacific Pact (TPP), as returning to single-desk selling would change Canada’s obligations.

Oberg said that before the federal government dissolved the CWB there should have been a plebiscite amongst the membership, as the CWB act required it. However, after many legal challenges, the government won out and the CWB was disbanded, and its assets sold off – to a non-Canadian corporation.

Rick Strankman, Wildrose MLA for Drumheller-Stettler, was part of the group arguing for the dissolution of the CWB. At one point, he was arrested for selling his crop without going through the CWB, though he was later pardoned by then-Prime Minister Harper.

Strankman isn’t convinced that a majority of Canada’s prairie farmers yearn for a return to the CWB-days.

“(The CWBA is) in a more remote area of the country than Stettler,” Strankman said. “(It’s certainly understandable how they’d have a different view than others in some provinces.”

Strankman said one of his issues with the CWB was its “double-standard,” as the rules were different depending on what part of Canada in which the farmer lived and grew crops.

“I think there’s a misunderstanding by people who made the motion (to restore the CWB) between the differentiation from CWB and Western Wheat Farmers,” Strankman said. “The wheat board in the past was federal legislation, and farmers across the country could not export their grain without a permit generated by the CWB, no matter where in Canada they lived. It was just that farmers were treated different in Western Canada than the rest of Canada.”

“Some of the final embarrassment of the wheat board was that double-standard,” he noted.

Strankman said he hasn’t seen any especial support for restoration of the CWB in his riding – or even much of Alberta. He noted that most of the support for the CWBA comes from Saskatchewan and Manitoba.

He also said that yes, while the CWB assets were sold to a non-Canadian corporation, there was nothing stopping Canadian farmers from grouping together to purchase the assets. They were sold openly and went to the highest bidder.

For CWBA members, it’s not that simple: life for farmers is not better, they said.

“Former customers of the Wheat Board are now complaining about unreliable supply and lack of quality assurance,” Andrew Dennis, a Manitoba grain producer and member of CWBA, said. “Ending the single-desk has put Canada’s reputation for high-quality grain in jeopardy.”

Without any way to mitigate the financial losses farmers are suffering because of what Oberg calls “gouging” by the companies that are now serving in place of the CWB in the current system, returning to the CWB method of single-desk selling is the only solution, Sigurdson said.

“Single-desk marketing agencies give farmers the commercial muscle to provide quality assurances to customers and for farmers to receive the full value of their product,” Sigurdson said. “The single-desk was an important component of my farm, which brought it stability and profitability. I want my son have the same benefits of single-desk marketing that are used by US farmers to market almonds and other crops, just like our own Federation of Quebec Maple Syrup Producers and other organizations around the world make use of.”