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Canadian Wheat Board

The Canadian Wheat Board (known at times as the Canada Wheat Board or by the acronym CWB) was established by the Parliament of Canada in 1935 as a producer marketing system for wheat and barley. It is headquartered in Winnipeg, Manitoba, Canada.

Governance

It is governed by a 15-person Board of Directors. Ten of the directors are elected by grain farmers in the western Canadian provinces of Alberta, Saskatchewan and Manitoba. Four of the directors are appointed by the federal Minister of Agriculture. The President of the Board is appointed by the Governor in Council, which, in its practical effect, means by the Prime Minister of Canada.

Purpose

The purpose of the Wheat Board which was made compulsory in 1943 by the government of Canada via the War Measures Act, was to control all grain prices. The Board had statutory maximums on wheat, oats, barley, flax, and corn between December, 1941 until expiry after the war. In April, 1943 the Board was also authorized to buy rapeseed and sunflowers. In 1967, the Canadian Wheat Board Act, until then subject to expiry and requiring periodic amendments by Parliament to extend the Board’s duration, was amended without time limit, thereby creating a permanent Board. CWB control over interprovincial shipments of feed grains became a public issue during the grains crisis in 1969 to 1972 and was removed. Only non-feed wheat and barley remain controlled by the CWB.

The farmers deliver their wheat and barley in accordance with regulated schedules. The Board compulsory acts as a marketing agent on behalf of prairie farmers. Farmers receive an interim payment and a final payment depending on the overall sales and prices. This is in effect a forced pooled selling system. It also provides, if necessary, a government guarantee in the event that the Board's market forecasts fail to meet expectations; however, initial prices are set low enough that this is a very rare occurrence. Farmers from Eastern Canada and parts of British Columbia are not controlled by the Canadian Wheat Board and may market all their grain on the open market. The area of British Columbia known as The Peace River District falls under the jurisdiction of the Canadian Wheat Board.

American complaints

Although the Board was reformed to meet free market conditions under the North American Free Trade Agreement and the World Trade Organization Treaty, American producers continually complain. Despite numerous challenges and much posturing by the United States, the World Trade Organization ruled in 2003 that the Wheat Board was a producer marketing body and not a system for government subsidy although the decision has since been overturned. In fact, Canadian producers have almost no government subsidy while their American and European Union counterparts are heavily subsidized. The attacks on the Wheat Board are one of the major irritants in bilateral relations between Canada and the United States.

Western alienation

The fact that the Wheat Board primarily markets crops produced in Western Canada has become a source of Western alienation and even Alberta separatism for many Western Canadian farmers. Farmers in Eastern Canada (east of Manitoba) and British Columbia are exempt from the monopoly control of non-feed wheat and barley. Wheat and barley farmers from the East have their own marketing boards but they are not compulsory. The Wheat Board has attempted to offer producers more options in recent years - for example, farmers can now purchase binding futures contracts from the Wheat Board that attempt to pay them the same price that they would get for their grain in the U.S. Although the new options created by the CWB allow farmers more ability to play the market, this does not go far enough in many farmers' eyes when it comes to the ability to get the best possible price for their commodities.

Abolition

In recent years, there have been calls by many groups to abolish the Wheat Board. Many of these groups have taken their fight to the internet to spread their message and gain support for their cause. While many are focused on the Canadian Wheat Board, the movement has taken a turn towards international Wheat Board abolition, with the other primary target being the Australian Wheat Board. At the moment the movement is in a grassroots stage, and it is uncertain as to whether or not it will gain widespread support.

The Debate over the Canadian Wheat Board's Monopoly

One of the aims of the Conservative government since coming to power in January, 2006 was to end the CWB Monopoly on the selling of Western Canadian Wheat and Barley. (See Stand Up For Canada, 2006, Conservative Party of Canada Federal Election Platform, page 18,

)

Proponents of CWB From the standpoint of supporters of the board and labour unions, the board gives individual farmers increased marketing power in a world market which gets them a higher price than they would otherwise get. A study conducted in the mid 1990s suggested that farmers gained on average a premium of 13.35 a tonne on wheat as a result of the board's monopoly. () Supporters of the board's monopoly fear that an end to the board's monopoly would put farmers in a situation not unlike that in the early part of the 20th century where farmers effectively competed with each other to sell their grain, a situation that effectively put them at the mercy of big agribusiness and the railroad monopolies and reduced farm incomes.

Opponents of CWB Many farmers, as well as agribusiness in Western Canada support the government's plan to dismantle the wheat board monopoly. They believe that farmers should be allowed to opt out of the board. Others believe that they could get a better price for their grain than the board itself and would like to market their own grain.

Also, farmers already have the ability to market all the crops save wheat and malt barley independently, showing that it is possible to succeed marketing grain without board oversight. For example, the total acres seeded to Canola in western provinces has often exceeded that of wheat. Thus, the wheat board's control of wheat and malt barley is seen as a redundancy.

Another concern is that many organic farmers are forced to sell and buyback their grain from the Canadian Wheat Board which lacks the resources to market organic wheat and barley. Being forced to sell and buyback wheat and malt barley also prevents the advantage that Canadian Farmers would have in adding value to those crops by developing businesses for milling and processing those crops.

A study by authors, Colin A. Carter and R. M. A. Loyns found that measurable costs of the single-desk to farmers exist, they vary and could be as high as $20 per tonne in any year for wheat. Taxpayer costs could be another $5 to $6 per tonne. For barley growers, the hidden costs of the Board are larger than $20 per tonne, and the taxpayer costs are approximately $9 per tonne.

A Dual Market Some opponents of the board's monopoly have suggested that the board's monopoly be replaced by a 'dual market' system. This is presented as a compromise where board supporters could continue to sell their wheat and barley through the board and board opponents could have the option to sell outside the board. From the standpoint of supporters of the board, however, this is not a real alternative as a dual market would effectively end the board's monopoly and any benefits that that monopoly may give to farmers.

Shaky Ground?

Because farmers capitalize program benefits into the cost of land, (), elimination of the CWB monopoly will result in lower land prices.() Lower land prices would make Canadian farmers more competitive but could also leave many owing more than the value of their reduced land. Retiring farmers, selling their land could be faced with a much reduced retirement fund but new entrants into farming would be able to purchase land at lower cost.

Some recent news involving the CWB

Since the Conservatives took power in Canada, Chuck Strahl, the minister of Agriculture has actively worked towards the end the Wheat Board's monopoly. This has included the replacement of government appointees to the board of directors in favor of individuals who oppose the board's monopoly, a gag order on wheat board staff, the firing of the pro-board President of the Board, and intervention in the election of farmer elected members of the board of directors.

December 2006 CWB board of directors election. Only one of five farmer elected seats go to opponents of the Canadian Wheat Board's monopoly on the selling of Canadian wheat and barley internationally. Since there is only one incumbent farmer elected board member opposed to the monopoly, only 2 out of 10 farmer elected directors are opposed to the monopoly. Nonetheless, the government appoints 5 members to the board meaning that supporters of the board's monopoly only have an eight to seven majority. Doubts have also been cast on the results because Strahl, the minister of Agriculture removed upwards of 20,000 farmers from the voters list in the midst of the election. These farmers were disqualified for such reasons as not having delivered any grain to the Wheat Board in the past two years, or having produced enough wheat or malt barley to have generated a significant enough income to live off of.
December 19, 2006: Chuck Strahl dismisses CWB president Adrian Measner, an outspoken supporter of the monopoly. This was done by Strahl with the statement "It's a position that [he] serves at [the] pleasure [of the Minister/Government]. And that position was no longer his". It was suggested that Measner had gone too far, for refusing to remove pro-CWB documents from the Board website, and also appearing at press conferences with opposition leader Stéphane Dion. The majority of the CWB's board of directors opposed the firing of Measner.
Conservative government loses court battle over unilaterally dismantling the CWB because it was contrary to the Canadian Wheat Board Act. In the aftermath. Harper and Strahl stated their intent to continue removing the traditional role of the CWB particularly in regards to barley (which is generally a more corporate crop), perhaps through Parliament.