Wheat board at WTO to Protect Farmer Interests – Our view …

Commentary, Agriculture, Frontier Centre

This response was published in the Saskatoon Star-Phoenix in response to a Frontier Centre column published there on April 22, 2005. You can read the original by clicking here. Rolf Penner’s section-by-section response to Ritter’s claims appears in bold throughout.

Ken Ritter is a Kindersley farmer and elected director who chairs the producer-controlled board of the Canadian Wheat Board.

This is not quite true; the board is a Crown corporation with its own federal cabinet minister (Reg Alcock) although, when asked, it likes to call itself a “shared governance” organization. Five of the executive directors running the board are appointed by Ottawa. While producers have a say in what goes on, they do not have the final say.

Re: Wheat Board working against farmers’ interests (SP, April 22). Why would Canadian Wheat Board directors travel to the World Trade Organization in Geneva? To fight on the world stage for the things that matter most to western Canadian farmers — our livelihood and our rights.

These are pretty words but coming from the CWB and Mr. Ritter they ring hollow; the wheat board does not fight for farmer rights but fights to suppress them; more on this later.

As a Saskatchewan farmer, I feel passionately about these things. As the CWB board chair, I am fully aware of how important trade liberalization would be for Canadian wheat and barley, which rely on export markets for 70 per cent of sales.

Curious, no mention of canola, oats, peas, sunflowers, corn, soybeans, canary seed, all of the other special crops and no mention of livestock, all of which would also benefit from trade liberalization.

Better international trade rules are critical to the future of our industry. We, as producers and exporters, want better rules.

Getting better access to foreign markets is a key goal when you are exporting billions of dollars worth of grain each year. We also want real cuts to the trade-distorting subsidies provided primarily by the U.S. and European governments. We want stricter rules for export credit and food-aid use. We want rules to prevent the groundless trade harassment western Canadian farmers have faced for 15 years.

Why does Mr. Ritter not mention tariff reduction here? Because he has allied himself with Canada’s other monopolists, who are protected by some of the highest tariffs in the world (up to 290%), to fight for the status quo in world trade. We need cuts in both subsidies and tariffs, which are opposite sides of the same protectionist coin, if we are to successfully compete in the global arena.

The CWB has been steadfastly pursuing these goals for many years, and not just at the WTO. We have also taken a lead role in alerting the Canadian government to the consequences of country-to-country trade agreements being forged by our competitors.

Other countries, most notably the United States, aggressively have been making “side-deals” that could harm market access for Canadian agricultural exports. The CWB has been working with other Canadian agricultural exporters to alert Ottawa about the risks and to preserve our markets.

There is nothing nefarious about the U.S. entering into free trade agreements with other nations. We should be following their example, not bashing them for their initiative.

I am acutely aware that current international trade rules are not working for western Canadian farmers. At the WTO, this is a critical year for negotiations. We need to be there, not only to press for meaningful concessions from other countries but to ensure a deal that doesn’t tip the scales away from producers in Canada.

Mr. Ritter is engaging in some Orwellian “doublespeak” here. Everyone else is supposed to make the concessions, except for him. He is also repeating the economic fallacy that protectionism is good for those being protected. It is not; it is self-destructive and harmful in and of itself, regardless of what our trading partners do.

There is no need, for example, for farmers here to give up our right to decide — among ourselves — what kind of grain marketing system suits us best. Negotiations at the WTO are devoted to a single purpose: reducing global trade distortions caused by government policies.

If Mr.Ritter is such a champion of the “right to choose,” why does he not fight for a voluntary Wheat Board? Why should a farmer in western Canada be held hostage by his neighbours when it comes to selling his wheat and barley? Why can a sovereign, individual western Canadian farmer not decide which marketing system suits him best? The questions answer themselves, because Mr. Ritter does not actually believe in sovereign individual rights, or the right to choose. He believes in false “collective rights,” absolute democracy and the tyranny of the majority. These are false rights, because in the case of the Wheat Board they violate one of the most fundamental of human rights, the right to one’s own property.

It is also the height of hypocrisy to then demand that the democratic choice of the other 147 countries in the WTO is irrelevant in these discussions, that somehow mystically outside of western Canada the definition of choice reverses and the Board now has a sovereign right to exist as an entity unto itself.

The single-desk system used by western Canadian farmers does not distort trade, and so its existence is not negotiable in Geneva.

More on this later.

The CWB’s compliance with international trade rules was confirmed last year by a WTO dispute-settlement case brought by the American government.

Yes, the board was in compliance with “some” international trade rules but not with “all” of them, as the case concluded. The case also highlighted how the board uses its monopoly power to consistently underbid its competitors. Which is legal, but the board then claims to be netting higher returns back to Prairie farmers. Both claims can not be true, and the evidence strongly suggests that farmers would be better off selling their grain themselves.

In other words, the future of Prairie farmers’ single desk is a debate that belongs in Western Canada — not in Geneva, Washington or Brussels.

Ironically, if the board were voluntary it would not come up in any trade discussions.

As farmers, we doubtless will be forced to make huge concessions if a WTO deal is finalized.

Again, the economic fallacies of protectionism. Grain farmers have everything to gain if the deal is finalized and nothing to lose.

We will lose our federal government guarantees of CWB borrowings and initial payments. If a deal is reached, we will have borne our share of the pain, and at this point, we don’t even know what we’ll get in return.

So how is it that government guarantees, subsidized interest rates on borrowings and the Wheat Board Act aren’t considered “trade-distorting government interference”? Oh, that’s right, because they are. This is why they are part of the WTO discussions and are on the negotiating table.

It is also quite galling that the board is ready to sacrifice literally billions of dollars worth of increased trade that would benefit all of Canada for a few measly million dollars worth of handouts from hard-working Canadian taxpayers.

It was important for us to highlight our views last week in Geneva, where we could meet with influential international players. Others clearly feel the same way.

Interestingly enough, communist China isn’t one of them; it has decided to do away with state trading enterprises (STEs) such as the CWB. The only other STE in the world is the Australian Wheat Board which is also not happy with the government perks enjoyed by the CWB. The board in its present form clearly has few if any supporters around the world.

Of the 1,700 registered participants at the WTO Public Symposium, more than 100 were Canadians, mostly from the agriculture sector.

It’s called “being proactive,” and not complacent about allowing foreign interests to determine the future of agriculture in Western Canada.

It’s about protecting your butt and lining your pockets at the expense of your fellow countrymen.

It’s also being realistic about what we should expect to gain from the WTO negotiations versus what we could lose. Geneva might be across the ocean, but what’s decided there will affect farmers here directly in the pocketbook.

We can’t afford to sit back and trust someone else.

The status quo is not an option.