The federal government has promised western Canadian farmers they can have the Canadian Wheat Board and an open market too.
Most farmers assume the only major change to the wheat board will be the loss of its monopoly over the sale of western Canadian wheat and barley destined for export or domestic human consumption.
The promise has created what now appears to be unrealistic expectations, including the board retaining many of its legislated powers giving it access to the grain-handling and transportation system, plus government guarantees of initial payments and pool accounts. These are important board tools that arguably benefit farmers.
These are also powers the board has had since it was created in 1935, before it received monopoly powers in 1942.
However, grain companies and the working group assigned to prepare a report on the transition to an open market, reject this. The Western Grain Elevator Association says the wheat board as essentially another grain company competing for the same grain should not get special treatment in an open market. It s easy to understand why. It would give the board a leg up on private grain companies.
Notwithstanding the inequity, farmers and the government can argue it s justified given the government says the proposed changes are aimed at benefiting farmers. Without those powers, how likely is it the government can fulfil its promise?
Board powers, or the lack of them in an open market, are what s behind the impasse between the board and the government now. The board has presented options to Agriculture Minister Gerry Ritz, predicated on the board continuing to have either regulated access to the system or the capital to acquire its own. The minister blames the board for failing to come up with a plan.
The logical place to start is ownership. If the government really wants the board to continue to exist, all it has to do is take ownership, which it had before legislative changes in 1998. At the very least, it needs to underwrite its liabilities.
Either way, that translates into lots of financial risk for the government. One of the reasons the Mackenzie King government gave the board monopoly selling powers was to reduce deficits in the pool accounts. Farmers sold to the board when open-market prices were below the board s initial payment and sold to the open market when prices were above.
As a farmer from Hanna, Alta., told Justice W.F.R. Turgeon s royal commission in 1938:
We are to have the grain exchange function when times are good and make all the profit possible out of the manipulation of the toil and sweat and blood as represented by our wheat (but) when things start to go bad and the exchange fails miserably, as it has always done, then the state has to step in, in an endeavour to save the situation.
Minister Ritz says an open market will be better for farmers and the grain industry. But he also promised a viable Canadian Wheat Board. If he fails to deliver, farmers will be wondering whether the government deliberately misled them or was just naive.