The CWB monopoly five years ago this week, but grain farmer Stewart Wells isn’t celebrating the anniversary.
The board, set up in 1935, was the sole organization allowed to buy and export western Canadian wheat and barley until former prime minister Stephen Harper’s government eliminated the “single desk” and opened the system to competition on Aug. 1, 2012, a time Harper called “grain marketing freedom day.”
The government sold the Crown corporation in 2015 to G3 Global Grain Group, owned by Saudi Arabia and a U.S. grain trader.
For some in the industry, the end of the wheat board was a victory in an emotional fight to increase profitability and efficiency — some farmers went to jail in the 1990s for taking their grain across the border to sell illegally in the U.S.
But Wells, a former wheat board director who chairs the Friends of the Canadian Wheat Board, sees the government action as a hammer blow that continues to hurt the average producer.
“There’s no question it’s the single biggest transfer of wealth away from farmers over to the grain trade in the 150-year history of this country,” said Wells, who works 2,500 acres near Swift Current, Sask.
“It’s amounted to billions of dollars every year since 2012.”
Most members in a wheat board plebiscite voted to keep the monopoly, a result the government dismissed.
A 2015 study by University of Saskatchewan agricultural economist Richard Gray concluded insufficient capacity in the grain handling and transportation system during the big 2013-14 and 2014-15 crop years cut producer incomes between $5 billion and $6.7 billion.
Mohammad Torshizi, a grain transportation specialist at the University of Alberta’s faculty of agricultural, life and environmental sciences, said the impact would have been smaller under the wheat board because farmers wouldn’t have rushed to sell before prices became even worse.
He doesn’t have a clear answer to whether eliminating the wheat board was a good idea — farmers adept at the complexities of selling grain, or close to elevators or the U.S. market, tend to like the move, while more isolated operators or people less likely to peddle their product are often unsupportive.
“From the perspective of voicing farmers’ concerns, the wheat board helped. They showed up in times of crisis, but in general I can also tell you a lot of farmers are happy because they have the freedom to market their grain as they want. It’s difficult to put a price on people’s freedom.”
In theory, major firms such as Richardson International and Glencore compete with each other to buy grain from farmers, but in reality most growers have little choice about where they can sell because the number of nearby elevators is limited, Wells says.
The companies don’t have to accept deliveries as they did under the wheat board, and new infrastructure they’re building will ultimately be funded through the expenses they charge farmers, he said.
“The whole system has switched to … where all the market power rests with the grain companies.”
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Industry chafed five years after end of Canadian Wheat Board monopoly | Edmonton Journal