2020 hindsight: Ending the Canadian Wheat Board was an economic tragedy
August 1st 2020 marks the 8th anniversary of one of the great economic tragedies in Canadian history. This was the day the wrecking ball swung by then Prime Minister Stephen Harper and former Agriculture Minister Gerry Ritz finally destroyed one of the most important institutions working for economic justice for farmers – the Canadian Wheat Board (CWB). In a malicious act driven by wrong-headed doctrine, they chose to eliminate the CWB through the Orwellian-titled Marketing Freedom for Farmers Act.
The CWB was a world-renowned agency that reliably supplied top quality western Canadian wheat and barley to customers within Canada and around the world and achieved a premium price for farmers through its single desk selling powers. Farmers also shared in the returns generated throughout year through the annual pooling of net sales, with a final payment made when the year’s results were tallied. Farmers could opt out of the pools through various other marketing tools offered by the Board, or they could market their grain directly to buyers through a very inexpensive buyback program. With the CWB, farmers really had the best of all worlds for marketing their wheat and barley.
In the lead-up to the CWB’s destruction, Stephen Harper and Gerry Ritz thumbed their noses at democracy by firing the farmer-elected members of the board of directors and by refusing to allow farmers to vote in regard to retaining the CWB as their marketing agency, which was required by then-existing law. They knew the majority of farmers wanted to maintain the CWB. This was not acceptable to Harper and Ritz.
Adding further insult to injury, after dismissing the farmer-elected directors who were the majority on the board, the remaining government-appointed board members used the $145 million contingency fund, which was made up of farmers earnings, to buy up elevators that were subsequently turned over — along with other assets of the CWB, including hopper rail cars, locomotives, and lake freighters — to the multinational grain company Bunge and the Saudi Arabian Land and Agricultural Investment Company, now doing business as G3.
Ironically, the very few who chafed under the CWB and complained it lacked transparency — in spite of its extensive annual reports — now labour under a system dominated by multinational grain companies that disclose almost nothing. This is particularly galling because with the CWB we had a direct stake in the marketing of our grain and democratic control through our elected farmer directors.
Under the CWB, malt barley sales generated significant premiums because of its end-use in the brewing industry. Now, price premiums are a joke. Grain companies are offering less than a dollar per bushel, sometimes just dimes, over feed barley prices. Grain companies are capturing the premium value for themselves. This is also happening in wheat sales where buyers manipulate the basis levels to capture most of the increased value whenever export prices go up (basis is made up of various charges including freight, handling, and arbitrage). The prices farmers receive have more or less stagnated, hovering in the 6 dollar/bushel range since the loss of the CWB. These are 1970’s prices!
Today, everyone should have 20:20 hindsight and see the magnitude of the losses to farmers and the Canadian economy caused by the destruction of the CWB. The National Farmers Union predicted these outcomes years ago and knew that the fight to save the CWB was the right fight! Now farmers are dominated by a few multinational grain companies that have taken billions out of Canada’s economy at farmers’ expense. Shame on Stephen Harper and Gerry Ritz.
Terry Boehm was NFU President from 2010 to 2014. He farms at Colonsay, Saskatchewan.