WINNIPEG – The Frontier Centre for Public Policy released today “Removal of the Canadian Wheat Board Monopoly: Future Changes for Farmers and the Grain Industry,” authored by University of Manitoba Professor and Economist Milton Boyd.
The Policy Brief looks ahead to resulting changes for farmers and industry, including the formation of a voluntary wheat board in the likely eventuality that the Canadian Wheat Board monopoly is removed by 2012. The Board was born around the time of the Great Depression, when many smaller subsistence farmers lacked grain marketing information and expertise.
Boyd explains how, contrary to circumstances seventy years ago when smaller farmers were relatively more comfortable with the Board marketing their grain, that many of today’s larger, independent, and sophisticated farmers want the freedom to make their own grain marketing decisions.
The removal of the Wheat Board monopoly will create voids, including loss of some export customer relationships, and the loss of an advocate for farmers on grain, regulatory, transportation, and other issues. But Boyd also describes opportunities. He points out at alternatives for the structure of a new voluntary wheat board, and some requirements it would need in order to be successful in the long-term, and some of the challenges it would likely face. He explains that “more deregulation, new investment, innovation, and value added may occur in the absence of a Board monopoly.” It would bring, Boyd says, “continued prosperity, and new jobs to offset lost jobs resulting from the removal of the Board monopoly.” He also mentions that some jobs potentially lost from the removal of the Board monopoly may be shifted to a voluntary board or could be absorbed by private grain companies taking on business formerly handled by the Board. Finally, he contemplates that more grain may be traded on the ICE Futures Canada Exchange in Winnipeg, in the absence of a Board monopoly.
Boyd also points out that regulators will need to remain vigilant, in order to ensure that there is sufficient competition among the private grain companies, and within the grain transportation sector, in the absence of the Board monopoly. He mentions that the grain industry appears relatively competitive at present. However, if the industry becomes less competitive in future, and the voluntary board is unable to add sufficient competition, then this could bring rise to new grain cooperatives or other grain companies entering the industry.
Download a copy of Removal of the Canadian Wheat Board Monopoly HERE.
For more information and to arrange an interview with the study's author, media (only) should contact:
Milton Boyd, PhD
Tel: (204) 474 9384
Marco Navarro-Genie, PhD
Director of Research