I'm not an expert on this myself, but here's a recent article about it..
Lots of losers, few winners in CWB fight
Even Agriculture Minister Gerry Ritz concedes that most Prairie wheat and barley producers support the Canadian Wheat Board. "The wheat board claims they have the support of 60 per cent of the farmers. That's a great base to start from,'' Ritz told the Regina & District Chamber of Commerce Tuesday, referring to the voluntary wheat board the Tories intend to create as of Aug. 1, 2012.
According to a 2007 study by PricewaterhouseCoopers, the CWB generates an estimated economic impact of $1.6 billion a year. As the world's largest exporter of wheat and barley, the CWB markets more than 20 million tonnes of grains and has sales in excess of $5 billion annually, giving it real market clout.
The Winnipeg-based agency markets Canadian grain to more than 70 countries and returns its sales revenues, less marketing costs, to 50,000 Prairie farmers. The single desk system enables the CWB to guarantee not only the quantity and quality of grain delivered to its customers, but also an initial payment to producers.
It can do this through a government guarantee, which is not a subsidy, but a line of credit that allows the CWB to provide a minimum floor price for farmers, not unlike support programs offered by other governments to their producers.
As to the subsidy charge, the U.S. government has investigated the board eight times in the past 10 years and the CWB has been found to be trading fairly and within international trading rules.
In fact, numerous studies by agricultural economists have shown the CWB earns a premium price for producers through its market clout, timing sales to catch market peaks, ensuring both the quality and quantity of grain delivered and getting volume discounts on shipping and handling.
So, what happens on Aug. 1, 2012? Well, no one can say for sure, but the Australian Wheat Board, which lost its monopoly in 2008, provides a pretty good example. Despite having been in operation for more than 20 years, within a year of the removal of the single desk, the AWB's share of the export market dropped to 23 per cent. Since then, the AWB was taken over in a $1.1-billion bid by Agrium, which sold the commodity marketing arm of AWB to Cargill for $175 million.