Your Reading List

The Grain Trade Must Step Up

Throughout its history, this newspaper s editorial position has been that Prairie farmers are better off economically by selling wheat and barley through the Canadian Wheat Board. That has not changed, but since the board s end seems inevitable, we have recently focused not on saying don t do it but rather on emphasizing just what this change means.

We have been especially critical of those who claim that this is no big deal, and that the CWB can somehow survive without a monopoly. It could only do so with government subsidies, and would not support the board continuing under these conditions.

There has been an unfortunate tendency to define free markets as those with minimal regulations. Recent financial meltdowns have proved that wrong. A true free market is one in which there are clear rules, fairly applied to all.

By that definition, the current wheat board system is a free market. Anyone can grow grain, and has legislated access to the marketing system. The board is the only seller, but does not handle grain. The companies that do handle grain compete under clear rules, and there are no barriers to entering the business.

It would not be a free market if one company, whatever it s called, were receiving government subsidies.

A voluntary board without government support can t exist. A voluntary board with government support shouldn t exist. The refusal of the self-proclaimed free marketers to accept this reality is leading to some unprofessional and sometimes bizarre behaviour.

That includes the members of the working group that Agriculture Minister Ritz appointed to advise on the transition. Their report completely avoided the key issue of where a voluntary board would find capital to buy grain from farmers. As for access to facilities, that could only come up with platitudes on giving markets a chance to work. Lacking answers themselves, they could only throw things back to the board and say The Working Group therefore considers that the CWB needs to get on with preparing for implementation.

The members know perfectly well that a voluntary board won t work and should either have the courage to say so, or the good judgment to decline participation in such a futile exercise.

But when it comes to unprofessional and bizarre behaviour, no one can top Agriculture Minister Gerry Ritz. It is scarcely believable that a minister of the Crown could write the juvenile Happy Birthday Monopoly letter (page four last week), portraying the CWB as a wartime measure foisted on unwilling farmers. Not only is that a distortion of history, it s an insult to the vast majority of farmers, of whom many are parents or grandparents now in their graves, who have supported it for most of its history.

One thing seems to have been forgotten in this increasingly nasty debate. When it comes to selling wheat, this country has never done anything better, and no one has ever done it better than Canada. You can do no better than to have a brand a concept so important these days for having the world s best wheat. We didn t get that by having the wheat board do a poor job.

Plant breeders, farmers, grain companies and the Canadian Grain Commission share the credit, but so does the board. The minister may not respect the board, but buyers do. These are sophisticated people who understand that the government is entitled to change the system.

What they will not understand is how the change is being managed. The minister s tasteless letter, plus the empty report of the transition committee, is telling customers that the future of Canadian wheat and barley trade is in the hands of ideologues who know little about the business, and have bad manners to boot.

Whether this change is for better or worse is no longer an issue. The question is how to wind down the CWB with minimum disruption to customers and farmers.

It s time for Canadian grain company presidents, who unlike most of the transition committee members actually know something about grain trading, to meet with Mr. Ritz, and preferably Prime Minister Harper as well.

They need to explain that this is not a minor change. As Paterson Globalfoods CEO Andrew Paterson said recently, there s going to be blood on the floor for some players. The political fallout will be enormous. Heaven help us and the grain companies when the government realizes what a potential mess this could be, and starts doing damage control. That could mean actually coming up with its stated plan for a strong, viable wheat board. Spare us from that hybrid monstrosity. Let s have an open market, with clear rules for everyone, and let s get this transition process into the hands of people who actually understand grain marketing.

[email protected]

About the author

Comments

explore

Stories from our other publications