Board Costs Farmers $1 a Bushel: Report

Agriculture, Marketing Boards, Media Appearances, Rolf Penner (historic), Rural, Uncategorized

A new report analyzing the value that the Canadian Wheat Board insists it delivers to Prairie farmers offers “instant absolute proof” to the contrary, says its author.

Far from maximizing returns back to producers, the board is actually leaving an “astounding” amount of money on the table, costing farmers and the Prairie economy as a whole, said Rolf Penner, the report’s author and agriculture fellow at Winnipeg’s Frontier Centre for Public Policy.

According to Penner’s “apple-to-apple” analysis, western Canadian farmers on June 14 were getting at least $1 less per bushel for their hard red spring wheat, depending on the contract, than farmers just across the border in the U.S.

For the average Prairie producer growing 200 hectares of spring wheat, the price difference translates into a minimum loss of $20,000, he said. Factored over the 6.8 million hectares of spring wheat planted in western Canada this year, that translates into an economic loss of between $585 million and $1.2 billion for the Prairie economy, Penner said.

The per bushel price difference is old news for many farmers but that “it’s still around is the point,” Penner said. “This thing is not going away, the differences are not shrinking and they’re not getting more efficient,” he said.

Penner’s case study was made between Boissevain, Man. and Bottineau, N.D., but he said the results are applicable right across the Prairies.

For Doug McBain, a Cremona-area farmer and past president of the Western Barley Growers Association, the Frontier report is “just more evidence that the board system does not deliver a benefit to farmers,” he said.

However Deanna Allen, spokeswoman for the Canadian Wheat Board, dismissed the report as shoddy analysis. She said the price comparisons are invalid.

“It looks like Frontier has opportunistically selected a single comparison that supports their political objective, and then extrapolated it to the entire western Canadian crop, which points to the objectivity of the analysis. You just can’t make that comparison,” she said.

The Frontier report follows a legal challenge launched by the board earlier this week over Ottawa’s move to end the board’s monopoly powers on barley sales in western Canada.

Earlier this year, the federal government moved to end the board’s monopoly on barley sales by Aug. 1, after western Canadian farmers voted in favour of marketing choice in a contentious landmark plebiscite. The vote was only about barley; western wheat will continue to be marketed solely by the wheat board for now.

Lee Erickson, a grain and oilseed farmer near Donalda, said there’s been lots of similar reports showing exactly the same thing as the Frontier report, and that traditionally there’s about a $1 a bushel difference.

“It’s been proven over and over and over again, that this is where it’s at, and plus we have to wait 18 months for our money,” he said.