Canadian Wheat Board

From Wikipedia, the free encyclopedia

The Canadian Wheat Board (known at times as the Canada Wheat Board or by the acronym CWB) was established by the Parliament of Canada in 1935 as a producer marketing system for wheat and barley. It is headquartered in Winnipeg, Manitoba, Canada.

1 Governance
2 Purpose
3 American complaints
4 Western alienation
5 Abolition
6 The Debate over the Canadian Wheat Board's Monopoly
- 6.1 Some recent news involving the CWB
7 See also
8 Foot Notes
9 External links

It is governed by a 15-person Board of Directors. Ten of the directors are elected by grain farmers in the western Canadian provinces of Alberta, Saskatchewan and Manitoba. Four of the directors are appointed by the federal Minister of Agriculture. The President of the Board is appointed by the Governor in Council, which, in its practical effect, means by the Prime Minister of Canada.

The purpose of the Wheat Board is to create a level playing field for all producers. The farmers deliver their grain in accordance with regulated schedules. The Board acts as a marketing agent on behalf of all farmers. Farmers receive an interim payment and a final payment depending on the overall sales and prices. This is in effect a pooled selling system that benefits farmers by ensuring a predictable cash flow, a pooled price and, if necessary, a government guarantee if the Board's market forecasts do not meet expectations.

Although the Board was reformed to meet free market conditions under the North American Free Trade Agreement and the World Trade Organization Treaty, American producers continually complain. Despite numerous challenges and much posturing by the United States, the World Trade Organization ruled in 2003 that the Wheat Board was a producer marketing body and not a system for government subsidy although the decision has since been overturned. In fact, Canadian producers have almost no government subsidy while their American and European Union counterparts are heavily subsidized.^{[citation needed]} The attacks on the Wheat Board are one of the major irritants in bilateral relations between Canada and the United States.

The fact that the Wheat Board primarily markets crops produced in Western Canada while its monopoly affects few Eastern Canadian products has become a source of Western alienation and even Alberta separatism for some Western Canadian farmers. This is despite the fact that farmers in Quebec and Ontario have their own marketing boards and associations. Nonetheless,in response, the Wheat Board has attempted to offer producers more options in recent years - for example, farmers can now purchase binding futures contracts from the Wheat Board that pay them the same price that they would get for their grain in the U.S. Although the new options created by the CWB allow farmers more ability to play the market, this does not go far enough in many farmers' eyes when it comes to the ability to get the best possible price for their commodities.

In recent years, there have been calls by many groups to abolish the Wheat Board. Many of these groups have taken their fight to the internet to spread their message and gain support for their cause. While many are focused on the Canadian Wheat Board, the movement has taken a turn towards international Wheat Board abolition, with the other primary target being the Australian Wheat Board. At the moment the movement is in a grassroots stage, and it is uncertain as to whether or not it will gain widespread support.

One of the aims of the Conservative government since coming to power in January, 2006 was to end the CWB Monopoly on the selling of Western Canadian Wheat and Barley. (See Stand Up For Canada, 2006, Conservative Party of Canada Federal Election Platform, page 18, http://www.conservative.ca/media/20060113-Platform.pdf)

Proponents From the standpoint of supporters of the board, the board gives individual farmers increased marketing power in a world market which gets them a higher price than they would otherwise get. A study conducted in the mid 1990s suggested that farmers gained on average a premium of 13.35 a tonne on wheat as a result of the board's monopoly. (http://www.gov.sk.ca/news?newsId=cf309d89-9570-481a-ab87-389ae5651ca1) Supporters of the boards monopoly fear that an end to the board's monopoly would put farmers in a situation not unlike that in the early part of the 20th century where farmers effectively competed with each other to sell their grain, a situation that effectively put them at the mercy of big agribusiness and the railroad monopolies and reduced farm incomes.

Opponents Some farmers, as well as big agribusiness in Western Canada support the government's plan to dismantle the wheat board monopoly. In some cases, this is on principle, as regardless of the benefits gained, they believe that farmers should be allowed to opt out of the board. While the board does have options for farmers who wish to sell their own grain, this is through a 'buyback' system which allows the board to maintain a pooled equal price for all farmers, and some farmers would like to opt out of board entirely. Others believe that they could get a better price for their grain than the board itself and would like to market their own grain. For big agribusiness, the board prevents their participation in a potentially profitable sector of the agricultural economy.

A Dual Market?

Some opponents of the board's monopoly have suggested that the board's monopoly be replaced by a 'dual market' system. This is presented as a compromise where board supporters could continue to sell their wheat and barley through the board and board opponents could have the option to sell outside the board. From the standpoint of supporters of the board, however, this is not a real alternative as a dual market would effectively end the board's monopoly and any benefits that that monopoly may give to farmers.

Since the Conservatives took power in Canada, Chuck Strahl, the minister of Agriculture has actively worked towards the end the Wheat Board's monopoly. This has included the replacement of government appointees to the board of directors in favor of individuals who oppose the board's monopoly, a gag order on wheat board staff, the firing of the pro-board President of the Board, and intervention in the election of farmer elected members of the board of directors. (See http://www.cbc.ca/canada/manitoba/story/2006/12/19/measner-fired.html and http://www.cbc.ca/canada/saskatchewan/story/2006/10/31/keith-cwb.html Some more details on this is below.

December 2006 CWB board of directors election. Only one of five farmer elected seats go to opponents of the Canadian Wheat Board's monopoly on the selling of Canadian wheat and barley internationally. Since there is only one incumbent farmer elected board member opposed to the monopoly, only 2 out of 10 farmer elected directors are opposed to the monopoly. Nonetheless, the government appoints 5 members to the board meaning that supporters of the board's monopoly only have an eight to seven majority. Doubts have also been cast on the results because Strahl, the minister of Agriculture removed upwards of 20,000 farmers from the voters list in the midst of the election. Some supporters of the board's monopoly believe that these were farmers who would be more likely to support the board's monopoly and that the removal was politically motivated to alter the results. ^[1]
December 19, 2006: Chuck Strahl dismisses CWB president Adrian Measner, an outspoken supporter of the monopoly. This was done by Strahl with the statment "It's a position that [he] serves at [the] pleasure [of the Minister/Government]. And that position was no longer his" ^[2] It was made clear to Measner that he might save his job if he opted to support the government's plan to dismantle the CWB monopoly, something he refused to do. (http://www.ctv.ca/servlet/ArticleNews/story/CTVNews/20061219/wheat_board_061219/20061219?hub=TopStories) The majority of the CWB's board of directors opposed the firing of Measner. (http://www.vueweekly.com/articles/default.aspx?i=5606)