Paying for the Wheat Board

Commentary, Marketing Boards, Rolf Penner

Ever since a federal court judge ruled on July 31 that the federal government’s bid to bypass Parliament and remove the Canadian Wheat Board’s monopoly on barley sales was illegal, pundits have been quibbling over the legal merits of the eleventh hour judgment. But whether it constitutes just “one thumbs up” for the democratic process or “two” misses the point. For a country whose politicians can barely decide where dogs can walk off-leash, never mind tackle hugely distortive and outdated policies that hamstring our ability to compete in increasingly cut-throat global markets, it’s a huge opportunity lost, for farmers and the future of Canadian agro-industry.

In a recent op-ed piece for the Saskatoon Star Phoenix, Ken Ritter, the chairman of the Canadian Wheat Board argued that a recent rash of foreign takeovers in strategic resource and manufacturing sectors was damning evidence – of the kind long foretold by the marketing monopoly – that unless Canada circles the wagons, the very kernel of the country’s sovereignty – grain – is at risk of being usurped by a motley crew of multinationals, conglomerates and private interests.

Why wheat and barley is more integral to Canadian autonomy than say, producing steel, is hard to say. Mr. Ritter is right to be concerned though, that foreign ownership, on such a scale in any case, dilutes Canadians’ ability to make responsible decisions affecting their future. But he need not worry when it comes to the country’s agro-industry. Unless foreign raiders plan on replacing Prairie farmers with landless Chinese peasants, there’s not much to take over.

Despite the Prairie’s image as breadbasket to the world, there are precious few Canadian companies making bread, or anything else for that matter, and none of a globally relevant size. The pasta companies and maltsers are already under foreign ownership while a cabal of American multinationals – Archer Daniels Midland, Cargill and Monsanto – retain a steely grip on the processing, handling, seed and fertilizer sectors. Except for a few small holdouts, including the Saskatchewan Wheat Pool, (partially owned by ADM), and the Winnipeg-based Richardson family, Canada has already ceded control of most of its agro-industry to foreigners.

How did this happen? Well, you can thank the Canadian Wheat Board.

Back in the Dirty ‘30s when farmers first began clamouring for government protection from unremitting market forces, the bogeymen were their fellow Canadians – traders, merchants and industrialists who made fortunes trucking in ‘prairie gold.’ Their commerce and burgeoning dynasties helped turn Winnipeg into a gilded city, it’s Grain Exchange, the continent’s second largest after Chicago, luring entrepreneurs and adventurers from around the world. Some farmers, however, were convinced the wealth to be had trading in grain futures was being made at their expense and the government, bowing to pressure, created the Board.

Initially the board only provided price protection. During World War II it was given a monopoly to trade in wheat and over time various other grains were added and removed from the Board’s jurisdiction. Bit-by-bit, private trading disappeared and with it, Winnipeg’s fortunes. Onerous government regulation discouraged all but the most diehard entrepreneurs willing to twist and bend to the Board’s monopoly diktats. By grinding down any private sector ambition and focusing exclusively on grain in commodity form, the Board left the door wide open to American companies, unhindered by such impediments in their home market, to waltz right in.

Today, the Manitoba government staunchly defends the Board, fearful of losing its Winnipeg-based head office and the 417 civil service jobs that sustain it. It’s a sad commentary on the city’s once glimmering future and what Canadians could have attained had they not been so fearfully, distrustful of market forces. Just a few hundred kilometers south is Minneapolis, a city similar to Winnipeg, which took a different path and is now home to Cargill, a leading global grain marketer and processor with US$75-billion in sales and 153,000 employees in 66 countries.

But at least we can take consolation in the fact that the Wheat Board is Canadian controlled, even if it has fuelled more animosity and divisiveness within Canada than any foreign multinational operating here. And the Board has succeeded in protecting Canada’s sovereignty, as Mr. Ritter claims, if that means Canadians are actually growing the wheat and barley, even if farmers plant less of it all the time. The fact that we don’t possess the means to turn the grain into food we can eat, well, that seems to be beside the point.

So yes, maybe there were some legal concerns surrounding how the federal government chose to remove the Board’s barley monopoly. It’s debatable. What’s not, is the damage an antiquated worldview of so-called “sovereignty” has done to undermine Canada’s ability to truly defend its interests in a globalized world. For that, the Board gets two huge thumbs down.

Andrea Mandel-Campbell is author of “Why We Don’t Sell Molson to the Mexicans”