Reforming the Wheat Board Without a Fight

Commentary, Marketing Boards, Rolf Penner

The new Conservative government in Ottawa should make good on its election promise to put an end to the monopoly power of the Canadian Wheat Board (CWB), the agency that markets Prairie wheat and barley within Canada and internationally. If it does, farm incomes will rise and bureaucratic costs will fall. That’s the conclusion reached in The Path Forward, a policy paper released last week by the Western Canadian Wheat Growers Association, a voluntary organization made up of prairie grain farmers, at its annual convention in Saskatoon.

The Path Forward makes strong ethical, economic and legal arguments for giving western farmers the freedom to sell their wheat and barley to whomever they see fit. They enjoy that marketing freedom with other crops like oats, canola and peas, as do other growers of wheat and barley outside of the Prairie Provinces.

While the ethical arguments have rarely been questioned—it’s obviously unfair that western farmers have to buy their own grain back from the Wheat Board if they want to use it for their own purposes—the economic debate has raged for decades. After reviewing and assessing relevant studies, the Wheat Growers are convinced “that implementing marketing choice will lead to higher net farmgate returns.”

The paper also points out that “The CWB marketing system also imposes tremendous costs on farmers” by downgrading crops piled on the ground because of delivery restrictions, the lack of investment in value-added processing relative to other crops and lower production due to restrictions on plant breeding. Other regulations also stifle innovation, encourage the inefficient allocation of scarce transportation resources, and run the risk of provoking retaliatory trade action by other countries.

The question posed by The Path Forward, however, is whether a minority government has the ability to get the necessary changes through the House of Commons. The paper convincingly argues that reform is possible through deregulation, with no need for legislative amendments to the Canadian Wheat Board Act would not be required. The Wheat Growers argue that it is fully within the authority of the government to instruct the CWB to grant export and interprovincial licenses to prairie farmers, or anyone else for that matter, free of charge. That would accomplish the task of granting market freedom without a political fight.

Some wheat board supporters are calling on the government to put the matter up for a farmer vote, saying that Canada is, after all, a democratic country. The problem with that noble sentiment is that it distorts the meaning and impact of democracy. Many of those allowed to vote have little
stake in the Wheat Board’s performance.

Cherilyn Jolly-Nagel, the fiery 26-year-old president of the Wheat Growers, has an answer for such arguments: “We don’t collectively decide on when or what we are going to seed, we don’t collectively decide when or how we are going to control the weeds in our fields and we don’t collectively decide when it is time to harvest our crops. I have never understood why people think that we have to collectively decide how to sell our wheat. There is no one better suited to make any of those decisions than the farmer who has to live with the consequences of those decisions.”

The longer the federal government drags its feet on this issue, the more impatient producers will grow. There are already rumblings throughout the Prairie farm belt of civil disobedience.

Minister of Agriculture Chuck Strahl and his parliamentary secretary, Saskatchewan MP David Anderson, have called for an end to the CWB’s monopoly. The Wheat Growers are pointing out that they can do that right now, without changing a single line of existing law. I hope Stephen Harper is listening.

This article originally appeared in the National Post March 21, 2006.