Worthwhile Canadian Initiative

By November 24, 2006Trade

Catching up on our Canadian political news this week, we were shocked to discover that the federal government may actually end the Canadian Wheat Board (as we know it)! Why, the Winnipeg-based Wheat Board is as Canadian as socialized health care, Sergeant Preston of the Yukon, and the Calgary Stampede. Hard to imagine it going away.

The Canadian Wheat Board is a government-mandated monopsony, which is to say if you’re a wheat or barley grower in Western Canada you MUST sell your grain to the CWB. (Not Eastern Canadian grain growers, just those farmers in Western Canada.) The Wheat Board then functions as a single desk seller, presumably gaining market advantage through its size and — many U.S. farmers rationally assert — secret deals that violate international trade agreements. The Wheat Board is notoriously non-transparent.

Younger, more aggressive Canadian farmers — especially in Alberta and Saskatachewan — also resent the idea they may not decide what to do with THEIR OWN GRAIN. By law, they must sell to the CWB.

But now, Prime Minister Stephen Harper and Agriculture Minister Chuck Strahl are proposing making membership in the CWB voluntary, and of course, all heck is breaking loose. This excellent column by Paul Jackson on the CWB appeared Nov. 21 in the Calgary Sun.

Canadian Wheat Board practices are a long-standing trade irritant with the United States, and U.S. prairie populist progressive protectionist politicians gain great purchase with their arguments against the CWB. (Although the P5, almost by definition, would find some other Canadian practice to fulminate against even if the CWB disappeared altogether.)

Our interest in the debate? Mostly theoretical:
1. Freedom is good.
2. Transparency is good.
3. Open markets are good.

Sun columns tend to disappear behind archival walls after a while, so you can find more of a “fair use” excerpt of Jackson’s column in the extended entry. And here’s a link to a good University of Manitoba student editorial.

The wheat board has often been described as a wholly owned subsidiary of the Liberal party and a huge patronage operation for Liberal governments.

Despite its $6 billion in annual sales, and a large staff, no outside agency or official is allowed to look at its books to see just how profitable it is, where the money goes and how it is decided who gets contracts for advertising or polling.

Indeed, when the Liberal-dominated Senate sent back to the House of Commons the Conservatives’ Federal Accountability Act — that’s the act calling for more ethics and openness in government — one of the ‘amendments’ struck out by the Liberals was the guarantee to an access to information clause covering the wheat board.

Sounds like a pretty innocuous clause.

But then why do the Liberals shudder at the very thought some outsider might be able to go through the board’s books or see how directors are appointed and contracts handed out?

Why are the internal operations of the wheat board guarded so jealously?

Join the discussion One Comment

  • Laurence Nicholson says:

    The CWB is a MARKETING , yes MARKETING agency not just a seller and there is a BIG difference . A MARKETING agency of the grain farmers in western Canada, controled by an elected board of directors, eastern Canada normaly consumes what they produce but still have to get an export permit from the CWB . We here in western Canada need to export 70% of what we produce and must rely on the CWB to do that for us. Grain companies are sellers not marketers and as a grain and oilseeds producer I need more buyers not sellers.