A federal task force has laid out an aggressive game-plan for ending the Canadian Wheat Board's monopoly, recommending prairie wheat and barley marketing be opened up by 2008.
The report's prescription, which was slammed Monday as the death knell for the Winnipeg-based agency, comes after the Harper Conservatives took the rare step of sacking one of the CWB's government-appointed directors, Ross Keith of Regina, over the weekend.
"I am strongly of the view that the CWB cannot and will not be viable without a single desk," Keith wrote in an Oct. 12 letter – obtained by the Free Press – to Agriculture Minister Chuck Strahl.
"The choice is between the single desk and an open market. The open market will resemble the American system without the subsidy and will not be to the benefit of farmers. In fact, control will ultimately flow to the transnational grain companies," said Keith.
The task force report – written by those who back the Tory campaign promise to end the wheat board's monopoly – lands smack in the middle of the campaign now underway to elect farmer directors in five of 10 prairie electoral districts.
It makes no mention of the main demand from backers of the existing wheat board that the government hold a plebiscite among prairie producers to see if they agree with plans to end the CWB's status as the single-desk seller of all Prairie wheat and barley that is exported or sold domestically for human consumption.
Instead, the report focuses on the creation of a new CWB that would be owned by farmers, who would be able to buy shares for $1 each.
"The task force believes that if marketing choice is introduced in a careful, considered way but without unnecessary delay, an efficient, effective and competitive grain marketing system will serve grain producers, customers and the overall grain industry," the report concludes.
However, the report's call to move without unnecessary delay –including passing legislation repealing the existing Canadian Wheat Board Act in favour of a new commercial company by June 2007 – is running up against a minority Parliament in which the Liberals, NDP and Bloc Quebecois are unlikely to support the plans.
Still, Strahl said he looks forward to sharing the report with farmers and making good on the Tory election vow.
"Canada's new government is committed to marketing choice for farmers and we are also committed to a strong voluntary wheat board, something that farmers want and something that this side of the House is very determined to make happen," he told the Commons Monday. As part of that vow, Strahl has already secured a cabinet order banning the CWB from spending any money advocating the retention of its marketing monopoly.
Ken Ritter, the Saskatchewan grain farmer who chairs the Canadian Wheat Board, said the task force's recommendations are unrealistic.
"How can you in four weeks do a report that does justice to the Canadian grain industry? I just don't think you can do it. And this report, in my judgment, didn't," he said in an interview. Ritter questioned the report's proposal that new directors be named by the government next June, by which time the task force envisages that a new act of Parliament respecting the wheat board will have received royal assent.
"So what does that mean?" said Ritter. "That the people running for director right now would only get six months in their positions?"
Manitoba Conservation Minister Stan Struthers who, acting for Agriculture Minister Rosann Wowchuk who is currently in Israel, described the report as outrageous.
"The minister (Strahl) asked his friends to find a way to kill the Canadian Wheat Board and the task force is doing what the minister asked them to do," said Struthers.
Struthers said the report shows the importance of Manitoba's pledge to hold a plebiscite among the province's farmers if the Tories refuse to consult with producers.
"The Tories don't have the guts to have a vote on this," Struthers said.
But Rolf Penner, a Morris farmer and an agricultural policy fellow with the Winnipeg-based Frontier Centre for Public Policy, said he wishes that the task force had tightened the timeline for implementing marketing choice.
"I would prefer that it would be quicker. I was hoping that, for next crop year, we would have the marketing choice option," he said.
David Rolfe, president of Keystone Agricultural Producers, which represents 7,000 Manitoba farm families, called the report "superficial."
Rolfe said the new wheat board envisaged by Strahl's task would be severely undercapitalized and would "have great difficulty competing in the international marketplace."
What was recommended
The government introduce legislation to repeal the Canadian Wheat Board Act and create a law providing for a new commercial entity, "CWB II". The law would also outline transition measures.
- The government announce its intention to end the monopoly for barley marketing on Jan. 31, 2008, and for wheat marketing on July 31, 2008. That assumes the new legislation will have received Royal assent by then.
- The government direct the wheat board to prepare for "a successful transformation" to an organization without monopoly powers.
- The government develop a communications strategy that would begin soon after the release of the task force report to explain the implications of marketing choice and the steps to achieve it. The communications would be directed at farmers, CWB customers and Canada's trading partners.
- The government appoint, for a two-year term, an interim CEO upon passage of the new Act to assume the management of the existing CWB and lead the transition to CWB II. It would also appoint an interim board of directors to serve until the shareholders of CWB II elect their own board.
- Prairie farmers be able to buy up to 2,000 shares in the new CWB, at a cost of $1 per share, during an initial three-month sales period. Over the following three-month period, farmers could buy as many shares as they wanted.
- CWB II be free to acquire assets and market a range of crops grown across Canada as well as crops "from origins other than Canada."
- The government guarantee CWB II borrowings over a specified time to a limit of $200 million, with a restriction that the funds only be used for operating credit. This would provide assurances to farmers that they would be paid for deliveries to the new entity.
- The government assume the obligations of the CWB for severance costs related to reductions of CWB permanent staff, if any.
- Wheat board assets, estimated by the task force to be worth $109.7 million, be transferred to the new entity.
- Following a transition period, CWB II have no ongoing financial support and no regulatory powers. There would be no restrictions on who would then own shares, but western farmers should retain majority control.