The Wheat Board Should Have Remained Neutral

Agriculture, Commentary, Dennis Owens, Marketing Boards, Rural, Uncategorized

The votes on the barley referendum will soon be counted, and perhaps another prairie crop freed of the fetters of monopoly. If that brings for barley the same boom as the one in oats after it was deregulated in 1989, and it likely will, another longstanding policy error will have been corrected. It will also leave the Canadian Wheat Board with a single captive commodity, the big one, wheat.

Let’s consider the desperate feelings of the Wheat Board workforce. They’re convinced, it seems, that the agency can’t survive in the free market. They’re wrong about that – the Board has an enormous depth of experience as a marketer of grain – but the mistake is driving some of its people to fearful behavior.

Ag Minister Chuck Strahl told the Board to stay out of the barley referendum, an action some labeled a “gag order.” That’s nonsense. No matter the democratic gloss of elected Directors, the federal government controls the Board. As former Manitoba Attorney-General Sidney Green swiftly pointed out, arguments that the agency shouldn’t have to listen to Strahl have ominous implications if applied throughout the public sector.

What’s surprising, in fact, is that rebellious former CEO, Adrian Measner, is the only one disciplined so far. He’s the chap who stood shoulder to shoulder with opposition leader, Stéphane Dion, who vowed to fight for a monopoly from which Ontario and Québec are exempt. Other employees at the Wheat Board should face repercussions, as well. They’ve continued to meddle in referendum politics.

A good example of that is contained in a Frontier Special Report. It shows clearly how, in contravention of Stahl’s explicit instructions, the Board used its staff and website to lobby for one of the three questions in the referendum. Using farmers’ own money to persuade them to vote for any of them is not what the Board is supposed to be doing with its time.

Strahl’s referendum offered growers three options: the status quo, an end to Board involvement or marketing choice. Inserted into the ballot package were opinion pieces in support of each position. The University of Saskatchewan’s Murray Fulton argued for keeping things as they are – the Board’s position – and the University of Calgary’s Barry Cooper presented a case for getting the Board out of barley altogether. Based on the Frontier Centre’s longstanding presentation of the case for marketing freedom, the Minister asked the Frontier’s Agriculture Policy Fellow, Rolf Penner, to summarize that position.

In other words, the ballot package was balanced, fair and clear evidence of a neglected public sector virtue, neutrality. Not so with the Board. On March 5, 2007, the CWB’s website posted rebuttals to Cooper and Penner. Fulton’s article was not discussed. That’s a full eight days before the deadline for growers to mail in their ballots, and a violation of the so-called “gag order.”

You’d think Board people willing to risk their jobs would have something valuable to say. But their counter-arguments to Penner were of the sort to which we’re unfortunately accustomed, what he calls “contradiction, innuendo, red herrings and irrelevancy, with the worst outweighing the best by a healthy margin.” He dissects their positions with surgical precision, sometimes to comic effect.

Penner can’t point out how well former provincial pork monopolies fared in a model of marketing choice, the anonymous writer argues, because “Comparing hogs to barley is worse than comparing apples to oranges.” A few breaths later, we read: “Many Canadian cattlemen who dealt with rock-bottom prices during the BSE crisis . . . would disagree that the free market – usually dominated by a handful of multinationals –serves farmers well.”

Hold on, Penner asks. I can’t compare grain with our successes in the hog market, but you can cite the politically induced BSE crisis as an example of free-market failure? Which is it? And in defense of the single desk you point out that “not enough buyers” is the problem?

Penner punctures much more puffery, not least the perennial Wheat Board claim that it delivers higher prices. Expert John De Pape, the author of the famous 2004 Sparks Barley Study, shredded the last of those illusions in a recent speech (also at www.fcpp.org) where he presented evidence that the Board offers customers lower than market prices.

An Algerian government grain buyer, confirmed that the Board sold to his country at a price that saves Algeria tens of dollars per tonne. “There is no other country which grants such advantages to us,” the bureaucrat said. The Wheat Board claims that a free-market U.S. grain association mistranslated the Algerian’s words in an act of malice. De Pape had the text translated independently, and it turns out that’s exactly what the writer was saying.

The Wheat Board’s people ought to forget about political battles, in which they look increasingly futile and incompetent, and write a new business plan instead. To prepare for the inevitable day when open markets in barley and wheat are restored to the Prairies.