The Sky Did Not Fall After All: On the one year anniversary of the end of the Canadian Wheat Board’s marketing monopoly

Commentary, Frontier Centre, Rural, Saskatchewan, Uncategorized

  

The one-year anniversary on Aug. 1 of the removal of the 75-year Canadian Wheat Board monopoly on western wheat and barley sales was marked with celebration in some quarters. But mostly it was relief, the feeling someone might have who was wrongfully convicted and sentenced to a long jail term, a year after being released. None of the consequences predicted by single -desk monopoly supporters came close to materializing. Most supporters, or ex-supporters, had nothing to say, having seemingly retreated back into the woodwork.

The pro-monopoly Canadian Wheat Board Alliance protested weakly that higher prices during the first monopoly- free year stemmed from the 2012 U.S. drought (which had little or no effect on wheat production). A spokesman claimed, with no evidence, that customers in China and Japan complain that they are not getting the level of customer service that the old Board provided. Of course they have been happy for decades with the service they received from the same companies as buyers of canola. Grain Commission statistics showed that wheat shipments to Japan were 30% higher and to China 150% higher than during the Board’s last monopoly year.

The Wheat Board itself did not have a word either. Requests for interviews from farm-paper reporters were apparently not responded to. It now issues a news release about once a month on such arcane topics as its calendar photo contest. When the elected directors were able to use the Board’s propaganda apparatus for their perpetual anti-government political campaign, hysterical press releases sometimes came out in morning and afternoon editions. The Board did not say that it had a successful or even a satisfactory year, which can be taken as confirmation that it had a rotten year. If it is lucky it retained perhaps a 10% share of the wheat market. Its barley and canola shares were probably too small to measure. Towards the end of the crop year the ‘new’ Wheat Board was buying grain from grain companies in both primary and terminal positions to make up for what farmers did not sell to it, in effect abandoning its function as an alternative marketer serving farmers.

The Canadian Federation of Independent Business released results of a survey of wheat and barley growers which it commissioned, showing an even higher degree of satisfaction with the change than might have been expected. Almost three quarters (74%) said they experienced no negative impact whatsoever. The results showed 78% of respondents feel they have better market signals than under the Wheat Board monopoly and its phony pool return outlooks; 66% appreciate access to competitive prices for their crops. Improved cash flow was cited as a benefit by 62% and 42% said they have better access to niche markets. Less stress because of better marketing control was claimed by 37%.

No one conducted a survey in the grain trade, but it was hardly needed. Several new companies entered the prairie grain market in various capacities. Obviously the most noted was Glencore, whose takeover of Viterra would not have happened if not for the prospect that the Wheat Board monopoly would end. Companies like Glencore would never go into a market where the scope of their operations was limited to acting as a service provider for an all-powerful, all-controlling bureaucratic monster. To be sure Glencore has not yet done anything except dismember Viterra and there is a feeling among some farmers that the new Viterra is a poor substitute for the old. However all farmers now have the freedom to choose the firm that will get their business on the pure grounds of self-interest, instead of as a channel through which to surrender their grain to the Wheat Board.

In the retrospect of just 12 months the superheated, fanatic, divisive decades-long controversy over the monopoly, fomented by its supporters, looks exactly like what it was: a ridiculous waste of time and energy. The Liberal and NDP politicians who blocked reform for years after the Harper government earned the right to make such decisions look even more like nincompoops than usually. The assorted judges, who as long ago as 1973 issued one blatantly-statist decision after another and so delayed reform by a generation, should have spent more time in law school, or else in reform school.

Marketing freedom is a not a gift from the government. It is a human right. It was always a valid proposition that a so-called marketing agency which could not attract voluntary patronage had no claim on monopoly powers. Now it has been proven. The Board was and still is an unnecessary middleman between farmers who grow grain and the grain companies who find people to buy it and ways to deliver it to them.

Originally appeared in Agriweek.