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{{Short description|Defunct Canadian marketing board}} | |||
{{Multiple issues|unbalanced =November 2010|refimprove =November 2010|long=January 2013}} | |||
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{{Infobox government agency | {{Infobox government agency | ||
|agency_name = Canadian Wheat Board | | agency_name = Canadian Wheat Board | ||
|type = | | type = | ||
|nativename = Commission canadienne du blé | | nativename = {{lang|fr|Commission canadienne du blé}} | ||
|nativename_a = | | nativename_a = | ||
|nativename_r = | | nativename_r = | ||
|logo = | | logo = | ||
|logo_width = | | logo_width = | ||
|logo_caption = | | logo_caption = | ||
|seal = | | seal = | ||
|seal_width = | | seal_width = | ||
|seal_caption = | | seal_caption = | ||
|picture = 433 Main Street and Canadian Wheat Board Building, Winnipeg.jpg | | picture = 433 Main Street and Canadian Wheat Board Building, Winnipeg.jpg | ||
|picture_width = 200px | | picture_width = 200px | ||
|picture_caption = Canadian Wheat Board Building (on right) | | picture_caption = Canadian Wheat Board Building (on right) | ||
|formed = {{Start date|1935}} | | formed = {{Start date|1935}} | ||
|preceding1 = | | preceding1 = | ||
|preceding2 = | | preceding2 = <!-- (etc.) --> | ||
| dissolved = {{Start date|2015}} | |||
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| superseding = | ||
| jurisdiction = ] | |||
|superseding = | |||
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| headquarters = ] | ||
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|headquarters = ] | |||
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| budget = | |||
|longd= |longm= |longs= |longEW= | |||
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| chief1_position = | |||
|budget = | |||
| chief2_name = | |||
|minister1_name = ] | |||
| chief2_position = <!-- (etc.) --> | |||
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| keydocument1 = Canadian Wheat Board Act | |||
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<!-- (etc.) -->| website = {{URL|www.cwb.ca/}} | |||
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|keydocument1= Canadian Wheat Board Act | |||
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|website = {{URL|www.cwb.ca/}} | |||
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}} | }} | ||
The '''Canadian Wheat Board''' ({{ |
The '''Canadian Wheat Board''' ({{langx|fr|Commission canadienne du blé|links=no}}) was a ] for ] and ] in ]. Established by the ] on 5 July 1935, its operation was governed by the Canadian Wheat Board Act as a mandatory producer marketing system for wheat and barley in ], ], ], and a small part of ].<ref name=":0">{{Cite web |title=Canadian Wheat Board |url=http://biographi.ca/en/topics/topic-match-list.php?id=1491 |access-date=2024-07-30 |website=Dictionary of Canadian Biography}}</ref> It was illegal for any farmer in areas under the CWB's jurisdiction to sell their wheat and barley through any other channel than the CWB. Although often called a ], it was actually a ] since it was the only ''buyer'' of wheat and barley. It was a marketing agency acting on behalf of Western Canadian farmers, passing all profits from its operation back to farmers. Its market power over wheat and barley marketing was referred to as the "Single Desk". | ||
Amid criticism, the Canadian Wheat Board's |
Amid criticism, the Canadian Wheat Board's Single Desk marketing power officially ended on 1 August 2012 as a result of Bill C-18, also known as the ], which was tabled by the ] and passed in December 2011. The Canadian Wheat Board changed its name to simply CWB, reflecting its changed status. CWB continued to operate as a grain company, although the bill also set a timeline for the eventual ] of CWB. On 15 April 2015, it was announced that a 50.1% majority stake in CWB would be acquired by Global Grain Group, a joint venture of ] and the Saudi Agricultural and Livestock Investment Company, for $250 million.<ref name="gandm-cwbsold" /> CWB was combined with the grain assets of Bunge Canada to form ] Limited. | ||
The third-highest sales year for wheat industry in Canada was 2011–2012 when the CWB "sold $7.2-billion worth of grain to more than 70 countries, $4.9 billion of which was paid back to farmers."<ref name="farmers_miss_CWB_2014" /> | |||
== Staff == | |||
Prior to the Bill C-18 the Board of Directors was organized as a cooperative with most of the directors being elected by farmers. It was governed by a 15 person Board of Directors. Of which: | |||
#Ten of the directors are elected by grain farmers in the western Canadian provinces of ], ], ] and parts of ]; | |||
#Four of the directors are appointed by ] on the recommendation of the Minister responsible for the Canadian Wheat Board;<ref>Canadian Wheat Board Act, subsection 3.02(1)</ref> | |||
#The President of the Board is appointed by the ], on the recommendation of the Minister responsible for the Canadian Wheat Board with certain restrictions including that the CWB must be consulted on the recommended candidate.<ref>Canadian Wheat Board Act section 3.09</ref> | |||
==History== | |||
On December 15, 2011, Bill C-18 Act received Royal assent. The original elected board was removed. Now only 5 appointed directors remain. "Four directors are appointed by the Governor in Council on the recommendation of the Minister" while "the president is appointed by the Governor in Council on the recommendation of the Minister<ref>{{cite web|last=Government of Canada|title=Board of Directors|url=http://parl.gc.ca/HousePublications/Redirector.aspx?RefererUrl=%2fHousePublications%2fPublication.aspx%3fLanguage%3dE%26Mode%3d1%26DocId%3d5339113&File=63#13|work=Marketing Freedom for Grain Farmers Act|publisher=Government|accessdate=30 January 2013}}</ref> | |||
== First wheat boards == | === First wheat boards === | ||
By the early 20th century in ], grain purchasing, transportation and marketing were dominated by large companies headquartered outside the region, such as the ] and the trading companies which dominated the ]. Producers were deeply suspicious of the business practices of these companies and hostile to their positions of power. Farmers were impressed by the success of state-led marketing as it was practised during ]. The government created a series of boards in and around the war, each with progressively more power to control the grain trade. The ] of 1912 was purely for regulation (to supervise grading, etc.), but by 1915 the government had seized control of all wheat exports to help the war effort, and by 1917 futures trading on the Winnipeg Exchange was banned. In 1917, the new ] was given monopoly powers over wheat, and fixed uniform prices across the country. Soon afterwards, the Board took over marketing of crops as well. Farmers were worried that after the war prices would crash and various agrarian groups lobbied Ottawa to keep the Board in place. The government relented by creating the Canadian Wheat Board for the 1919 crop only. Farmers got a guaranteed price for that crop, paid immediately, and later a further payment once the Board had |
By the early 20th century in ], grain purchasing, transportation and marketing were dominated by large companies headquartered outside the region, such as the ] and the trading companies which dominated the ]. Producers were deeply suspicious of the business practices of these companies and hostile to their positions of power. Farmers were impressed by the success of state-led marketing as it was practised during ]. The government created a series of boards in and around the war, each with progressively more power to control the grain trade. The ] of 1912 was purely for regulation (to supervise grading, etc.), but by 1915 the government had seized control of all wheat exports to help the war effort, and by 1917 futures trading on the Winnipeg Exchange was banned. In 1917, the new ] was given monopoly powers over wheat, and fixed uniform prices across the country. Soon afterwards, the Board took over marketing of other crops as well. Farmers were worried that after the war, prices would crash and various agrarian groups lobbied Ottawa to keep the Board in place. The government relented by creating the Canadian Wheat Board for the 1919 crop only. Farmers got a guaranteed price for that crop, paid immediately, and later a further payment once the Board had completed the year's sales. This system of guaranteed prices and distributed income was extremely popular and when the Board dissolved in 1920, many farmers were livid. It certainly did not help that, "from a peak of $2.85 per bushel in September, 1920 began a slow and sickening decline to less than a dollar a bushel in late 1923."<ref>MacEwan, Harvest, 103.</ref> This marked contrast to the stable prices of 1919–1920 Board seemed to confirm farmers' suspicions of market trading. | ||
== Interregnum == | === Interregnum (1920–1935)=== | ||
{{Main|wheat |
{{Main|wheat pools in Canada}} | ||
After the dissolution of the early board in 1920, farmers turned to the idea of farmer-owned ]s. Cooperative grain elevator operators already existed, like ], which had already been started in 1917. In 1923 and 1924 the ] were created to buy Canadian wheat and resell it overseas. The ], the ], and ] quickly became giants in the industry and displaced the private traders. However they did not hedge against falling prices (instead relying on provincial government guarantees), and during the price collapse of 1929, they effectively went bankrupt. The majority of farmers did not want the private traders to return, and now it also seemed impossible for them to own their own marketing companies, so the idea of a government marketing board was revived. | After the dissolution of the early board in 1920, farmers turned to the idea of farmer-owned ]s. Cooperative grain elevator operators already existed, like ], which had already been started in 1917. In 1923 and 1924 the ] were created to buy Canadian wheat and resell it overseas. The ], the ], and ] quickly became giants in the industry and displaced the private traders. However they did not hedge against falling prices (instead relying on provincial government guarantees), and during the price collapse of 1929, they effectively went bankrupt. The majority of farmers did not want the private traders to return, and now it also seemed impossible for them to own their own marketing companies, so the idea of a government marketing board was revived. | ||
== Revival == | === Revival and flourishing (1935–2000)=== | ||
The Canadian Wheat Board was re-created in 1935 the aim of controlling grain prices, so as to benefit farmers devastated by the |
The Canadian Wheat Board was re-created in 1935 with the aim of controlling grain prices, so as to benefit farmers devastated by the ].<ref name=":0" /> During the ], the authority of the Board was expanded, and the Board was given the authority to set statutory maximums on wheat, ], barley, ], and ] between December, 1941 until expiry after the war. Membership was made compulsory for Western Canadian farmers in 1943 via the ], now with the purpose of aiding the war effort. In April, 1943 the Board was also authorized to buy ] and ]s. | ||
Between 1958 and 1970 the CWB was chaired by ], and he managed to perennialise the CWB in 1965, which was until then subject to amendments by Parliament when they periodically extended the Board's duration. McNamara convinced Parliament to end the time limit in the Act, thereby creating a permanent Board. CWB control over interprovincial shipments of feed grains became a public issue during the grains crisis in 1969 to 1972 and was removed. Only non-feed wheat and barley remained controlled by the CWB.<ref>{{Cite web|url=http://www.cwb.ca/public/en/about/history/|archive-url=https://web.archive.org/web/20110218042315/http://www.cwb.ca/public/en/about/history/|title=cwb.ca: History of CWB|archive-date=February 18, 2011}}</ref><ref> (copy by archive.org)</ref> | |||
== Operation == | |||
] | |||
The farmers deliver their wheat and barley to grain elevators throughout the crop year. The Board acts as a single desk marketer of wheat and barley on behalf of prairie ]s. Upon delivery to an elevator, farmers receive an initial payment for their grain from the CWB that represents a percentage of the ] for that grade from the pool account. After the end of the crop year, July 31, an interim payment and a final payment are paid to farmers, in addition to their initial payment so they will have received 100 percent of the return from the pool for the grain they delivered. The initial payments are guaranteed by the Government of Canada so that farmers will receive payment even if there is a deficit in the pool account. Initial payments are set with a risk factor built in to guard against the event that price expectations are not met. | |||
=== Anti-GMO stance of the CWB (2004) === | |||
Until December 15, 2011, compliance with the wheat board for most farmers and elevators was mandatory<ref>, Canadian Wheat Board Act, section 45</ref><ref>, Canadian Wheat Board Act, section 66</ref><ref>, Canadian Wheat Board Act, section 20 and 21</ref> and was punishable by fines and/or imprisonment.<ref name="Canadian Wheat Board Act">, Canadian Wheat Board Act, section 68</ref> Farmers from Eastern Canada and most of British Columbia were not controlled by the Canadian Wheat Board and were able to market all their grain on the open market. The area of British Columbia known as ''The Peace River District'' falls under the jurisdiction of the Canadian Wheat Board. Bill C-18 re-organized the CWB to now market grain through voluntary pooling. | |||
The Canadian Wheat Board was instrumental in stopping the ] (GM) wheat of ] in 2004. As a united voice for wheat farmers, the CWB conducted market research which showed that international markets did not want GM wheat and would reject wheat exports from Canada if GM wheat was approved, because of the risk of contamination. The CWB also surveyed wheat farmers and found many did not want GM wheat. The CWB presented research and the views of wheat farmers to the government.<ref name="GMO_2010">{{citation |url=http://www.cban.ca/Resources/Topics/GE-Crops-and-Foods-Not-on-the-Market/Wheat |publisher=Canadian Biotechnology Action Network(CBAN) |location=Ottawa, Ontario |series=Canadian Biotechnology Action Network - Wheat |access-date=5 August 2015 |title=GM Wheat rejected by 233 Consumer, Farmer Groups in 26 Countries |archive-url=https://web.archive.org/web/20150524154441/http://www.cban.ca/Resources/Topics/GE-Crops-and-Foods-Not-on-the-Market/Wheat |archive-date=2015-05-24 }}</ref> | |||
=== Late operations === | |||
] | |||
The farmers delivered their wheat and barley to grain elevators throughout the crop year. The Board acted as a single desk marketer of wheat and barley on behalf of prairie ]s. Upon delivery to an elevator, farmers received an initial payment for their grain from the CWB that represented a percentage of the ] for that grade from the pool account. After the end of the crop year, July 31, an interim payment and a final payment were paid to farmers, in addition to their initial payment, and so they would have received 100% of the return from the sale of the grain they delivered, less all overhead costs of the CWB. The initial payments were guaranteed by the Government of Canada so that farmers received payment even if there was a deficit in the pool account. Initial payments were set below expectations for the crop year, a risk factor that was built in to guard against the event that price expectations are not met. | |||
Prior to the December 2011 passage of Bill C-18, ''An Act to reorganize the Canadian Wheat Board and to make consequential and related amendments to certain Acts'',<ref>{{Cite web |url=http://www.parl.gc.ca/Content/LOP/LegislativeSummaries/41/1/c18-e.pdf |title=parl.gc.ca - Library of Parliament Legislative Summary PUBLICATION NO. 41-1-C18-E |access-date=2015-04-29 |archive-url=https://web.archive.org/web/20150610045220/http://www.parl.gc.ca/Content/LOP/LegislativeSummaries/41/1/c18-e.pdf |archive-date=2015-06-10 }}</ref> the CWB was governed by a 15-person Board of Directors, of which: | |||
#Ten of the directors were elected by grain farmers in the western Canadian provinces of ], ], ] and parts of ]; | |||
#Four of the directors were appointed by ] on the recommendation of the Minister responsible for the Canadian Wheat Board;<ref>Canadian Wheat Board Act, subsection 3.02(1)</ref> | |||
#One was the President of the CWB, appointed by the ], on the recommendation of the Minister responsible for the Canadian Wheat Board with certain restrictions including that the CWB Board of Directors must be consulted on the recommended candidate.<ref>Canadian Wheat Board Act section 3.09</ref> | |||
Upon the implementation of Bill C-18, the original elected board was removed and was replaced by four directors, appointed by the Governor in Council on the recommendation of the Minister of Agriculture, as well as the president, appointed by the Governor in Council on the recommendation of the Minister.<ref>{{cite web|last=Government of Canada|title=Board of Directors|url=http://parl.gc.ca/HousePublications/Redirector.aspx?RefererUrl=%2fHousePublications%2fPublication.aspx%3fLanguage%3dE%26Mode%3d1%26DocId%3d5339113&File=63#13|work=Marketing Freedom for Grain Farmers Act|publisher=Government|access-date=30 January 2013}}</ref> | |||
Until 15 December 2011, compliance with the wheat board for most farmers and elevators was mandatory<ref name="CWB_section_45">{{citation |url=http://laws.justice.gc.ca/eng/acts/C-24/page-17.html#h-34 |title=Canadian Wheat Board Act, section 45 |access-date=2011-06-24 |archive-date=2012-05-27 |archive-url=https://web.archive.org/web/20120527132111/http://laws.justice.gc.ca/eng/acts/C-24/page-17.html#h-34 |url-status=dead }}</ref><ref name="CWB_section_66">{{citation |url=http://laws.justice.gc.ca/eng/acts/C-24/page-23.html#h-52 |title=Canadian Wheat Board Act, section 66 |access-date=2011-06-24 |archive-date=2012-05-27 |archive-url=https://web.archive.org/web/20120527132140/http://laws.justice.gc.ca/eng/acts/C-24/page-23.html#h-52 |url-status=dead }}</ref><ref name="CWB_section_20">{{citation |url=http://laws.justice.gc.ca/eng/acts/C-24/page-8.html#h-17 |title=Canadian Wheat Board Act, section 20 and 21 |access-date=2011-06-24 |archive-date=2012-05-27 |archive-url=https://web.archive.org/web/20120527132151/http://laws.justice.gc.ca/eng/acts/C-24/page-8.html#h-17 |url-status=dead }}</ref> under threat of punishable by fines and/or imprisonment.<ref name="Canadian Wheat Board Act"> {{Webarchive|url=https://web.archive.org/web/20120527132155/http://laws.justice.gc.ca/eng/acts/C-24/page-24.html#h-54 |date=2012-05-27 }}, Canadian Wheat Board Act, section 68</ref> Farmers from Eastern Canada and most of British Columbia were not controlled by the Canadian Wheat Board and were able to market all their grain on the open market. The area of British Columbia known as ''The Peace River District'' fell under the jurisdiction of the Canadian Wheat Board. Bill C-18, the Marketing Freedom for Grain Farmers Act, reorganized the CWB to market grain through voluntary pooling. | |||
] | ] | ||
From the standpoint of supporters of the board and labour unions, the board gives individual farmers increased marketing power in a world market which gets them a higher price than they would otherwise get, not only through the efficiencies of scale, but as well by exercising ] marketing power on the selling side, especially for ] wheat. 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 monopsony.<ref>{{cite web|url=http://www.gov.sk.ca/news?newsId=cf309d89-9570-481a-ab87-389ae5651ca1 |title=UPSHALL DELIVERS STRONG PRO-CANADIAN WHEAT BOARD MESSAGE - Government of Saskatchewan |publisher=Gov.sk.ca |date=1996-02-16 |accessdate=2011-02-14}}</ref> Supporters of the monopsony fear that an end to the board would put farmers in a situation like 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. The counter-argument is that producers of non-Board crops such as canola do not seem to have this problem.<ref></ref> | |||
== |
==Quality grading system== | ||
Unlike the United States, Canada had a tight grading system established by the ] and enforced by the CWB. This enforcement made it "possible to extract premiums for higher quality grain that is not possible in the United States."<ref name="AGECON_1996">{{cite report |url=http://ageconsearch.umn.edu/bitstream/31759/1/fulton03.pdf |title=Dual Marketing and the Decisions Facing Western Canadian Farmers for Wheat and Barley Marketing: A Brief to the Western Grain Marketing Panel |author=Murray Fulton |author2=James Vercammen |location=Saskatoon, Saskatchewan |date=February 1996 |access-date=3 August 2015}}</ref> In an open market system Western Canadian farmers lose the benefits of a grading system.<ref name="AGECON_1996" /> | |||
In a recent plebiscite (referendum) conducted by Meyers norris Penny, 62% of CWB farmers voted that they wanted to keep the wheat board.<ref name="cwb.ca">{{cite web|url=http://www.cwb.ca/public/en/newsroom/releases/2011/news_release.jsp?news=091211.jsp |title=Farmers vote to keep Canadian Wheat Board |accessdate=2011-09-12 |date=2011-09-12 |publisher=CWB }}</ref> Proponents of maintaining the CWB have stated that the collective barganing power of the wheat board gives farmers a better price than they would have if they were individually marketing to large multi-national corporations.{{Citation needed|date=November 2011}} | |||
At this time, farmers already have the ability to market all the crops save wheat and malt barley independently, meaning it is possible to succeed marketing grain without board oversight.{{Citation needed|date=July 2011}} This, however, may make farmers more susceptible to fluctuations in the commodity market and to focus more of their time on the business aspect of farming, rather than farming.{{Citation needed|date=November 2011}} The Wheat Board currently attempts to offer producers more options in recent years - for example, farmers can now purchase binding ]s from the Wheat Board that attempt to pay them the same price that they would get for their grain in the U.S. | |||
===Reorganisation (2006–2012)=== | |||
Since 2006 when the Conservative Party came to power, ], then Minister of Agriculture, worked towards the end of the Wheat Board's Single Desk, including the replacement of government appointees to the Board of Directors in favor of individuals who oppose the board's Single Desk, a ] on Wheat Board staff, the firing of the pro-board President, and intervention in the election of farmer elected members of the Board of Directors.<ref name="fired">{{cite news|title=Strahl fires wheat board president |date=19 December 2006 |publisher=CBC News |url=http://www.cbc.ca/news/canada/manitoba/strahl-fires-wheat-board-president-1.596641 |access-date=25 January 2015 |archive-url=https://web.archive.org/web/20151019033411/http://www.cbc.ca/news/canada/manitoba/strahl-fires-wheat-board-president-1.596641 |archive-date=October 19, 2015 }}</ref><ref>{{citation |url=http://www.policyalternatives.ca/sites/default/files/uploads/publications/Saskatchewan%20Office/2011/05/SKNOTES_Canadian_Wheat_Board_May2011.pdf |date=May 2011 |access-date=3 August 2015 |title=Harper's Renewed Attack on the Canadian Wheat Board |author=Helen Forsey |author2=Simon Enoch }}</ref> | |||
==Challenges and Successes== | |||
* December 2006 CWB Board of Directors election. Only one of five farmer-elected seats went to opponents of the Canadian Wheat Board's Single Desk power on the selling of Canadian wheat and barley internationally. Since there was only one incumbent farmer-elected board member opposed to the Single Desk, only two out of ten farmer-elected directors were opposed to the Single Desk. Nonetheless, the government appointed five members to the board; supporters of the board's Single Desk would have only an eight to seven majority. Doubts have also been cast by some 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. These farmers were disqualified for such reasons as not having delivered any grain to the Wheat Board in the past two years or not having produced enough wheat or malt barley to have generated significant enough income from which to live off.<ref>{{cite news| title=marketing agency| url=https://brandhause.com/| access-date=2007-08-27}}</ref> | |||
Since 2006 when the Conservative Party came to power, Chuck Strahl, the minister of Agriculture has worked towards the end the Wheat Board's monopsony, including the replacement of government appointees to the board of directors in favor of individuals who oppose the board's monopsony, 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.<ref name="fired">{{cite news | first= | last= | coauthors= | title=Strahl fires wheat board president | date=2006-12-19 | publisher=CBC News | url =http://www.cbc.ca/canada/manitoba/story/2006/12/19/measner-fired.html | work = | pages = | accessdate = 2007-08-27 | language = }}</ref><ref>{{cite news | first= | last= | coauthors= | title=Pro-monopoly Wheat Board director fired | date=2006-09-31 | publisher=CBC News | url =http://www.cbc.ca/canada/saskatchewan/story/2006/10/31/keith-cwb.html | work = | pages = | accessdate = 2007-08-27 | language = }}</ref> | |||
* December 19, 2006: Chuck Strahl dismisses CWB president ], an outspoken supporter of the Single Desk. This was done by Strahl with the statement "It's a position that serves at pleasure . And that position was no longer his."<ref name="fired"/> It was suggested that Measner had gone too far for refusing to remove pro-CWB documents from the Board website and also appearing at press conferences with ] leader ].<ref>{{cite news |title=Strahl fires president of Canadian Wheat Board |date=2007-12-19 |work=CTV News |url=http://www.ctv.ca/servlet/ArticleNews/story/CTVNews/20061219/wheat_board_061219/20061219?hub=TopStories |access-date=2007-08-27 |archive-url=https://web.archive.org/web/20080330163853/http://www.ctv.ca/servlet/ArticleNews/story/CTVNews/20061219/wheat_board_061219/20061219?hub=TopStories |archive-date=2008-03-30 }}</ref> The majority of the CWB's board of directors opposed the firing of Measner.<ref>{{cite web|url=http://www.vueweekly.com/articles/default.aspx?i=5606 |title=FARMERS OPPOSE TORIES' WHEAT BOARD POLICY AND STRONG-ARM TACTICS |access-date=2007-08-27 |last=Eshpeter |first=Ken |work=Vue Weekly |archive-url = https://web.archive.org/web/20070928011715/http://www.vueweekly.com/articles/default.aspx?i=5606 <!-- Bot retrieved archive --> |archive-date = 2007-09-28}}</ref> | |||
{{Prose|date=August 2011}} | |||
* March 28, 2007: Barley Plebiscite. 62% of farmers vote to end the wheat board's barley Single Desk power.<ref>{{cite news | title=Farmers vote to end wheat board's barley monopoly | date=2007-03-28 | publisher=CBC | url =https://www.cbc.ca/news/canada/farmers-vote-to-end-wheat-board-s-barley-monopoly-1.642135 | access-date = 2011-12-30 }}</ref> Legislation to amend the act dies on ] when the September 2008 election is called. | |||
* December 2006 CWB board of directors election. Only one of five farmer elected seats goes to opponents of the Canadian Wheat Board's monopsony on the selling of Canadian wheat and barley internationally. Since there is only one incumbent farmer elected board member opposed to the monopsony, only two out of ten farmer elected directors are opposed to the monopsony. Nonetheless, the government appoints five members to the board so supporters of the board's monopsony have only 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. These farmers were disqualified for such reasons as not having delivered any grain to the Wheat Board in the past two years or having produced enough wheat or malt barley to have generated significant enough income from which to live off.<ref>{{cite news | first= | last= | coauthors= | title=dead link | date= | publisher= | url =http://www.canada.com/topics/news/national/story.html?id=bf672344-841b-4c58-afc3-573e7c47efc0&k=90428 | work = | pages = | accessdate = 2007-08-27 | language = }}</ref> | |||
* December 19, 2006: ] dismisses CWB president Adrian Measner, an outspoken supporter of the monopsony. This was done by Strahl with the statement "It's a position that serves at pleasure . And that position was no longer his."<ref name="fired"/> It was suggested that Measner had gone too far for refusing to remove pro-CWB documents from the Board website and also appearing at press conferences with opposition leader ].<ref>{{cite news | first= | last= | coauthors= | title=Strahl fires president of Canadian Wheat Board | date=2007-12-19 | publisher=CTV | url =http://www.ctv.ca/servlet/ArticleNews/story/CTVNews/20061219/wheat_board_061219/20061219?hub=TopStories | work = | pages = | accessdate = 2007-08-27 | language = }}</ref> The majority of the CWB's board of directors opposed the firing of Measner.<ref>{{cite web|url=http://www.vueweekly.com/articles/default.aspx?i=5606 |title=FARMERS OPPOSE TORIES' WHEAT BOARD POLICY AND STRONG-ARM TACTICS |accessdate=2007-08-27 |last=Eshpeter |first=Ken |work=Vue Weekly |archiveurl = http://web.archive.org/web/20070928011715/http://www.vueweekly.com/articles/default.aspx?i=5606 <!-- Bot retrieved archive --> |archivedate = 2007-09-28}}</ref> | |||
* March 28, 2007: Barley Plebiscite. 62% of farmers vote to end the wheat board's barley monopoly.<ref>{{cite news | first= | last= | coauthors= | title=Farmers vote to end wheat board's barley monopoly | date=2007-03-28 | publisher=CBC | url =http://www.cbc.ca/news/canada/story/2007/03/28/barley-vote.html | work = | pages = | accessdate = 2011-12-30 | language = }}</ref> Legislation to amend the act dies on ] when the September 2008 election is called. | |||
* February 26, 2008: Conservative government loses court battle over unilaterally dismantling the CWB because it was contrary to the Canadian Wheat Board Act.<ref name=WWWYKI/> | * February 26, 2008: Conservative government loses court battle over unilaterally dismantling the CWB because it was contrary to the Canadian Wheat Board Act.<ref name=WWWYKI/> | ||
* December 7, 2008: Board of Directors elections. Four of five candidates elected support the |
* December 7, 2008: Board of Directors elections. Four of five candidates elected support the Single Desk marketing agency.<ref>Conservatives use Taxpayers Money to Kill Wheat Board. NFU press release, Nov 26, 2008.</ref> | ||
* January 21, 2010: Supreme Court of Canada sided with the federal government in its 2006 order barring the board from spending its money on lobbying.<ref>{{cite web|url= |
* January 21, 2010: ] sided with the federal government in its 2006 order barring the board from spending its money on ].<ref>{{cite web |url=https://vancouversun.com/news/Court+ruling+defeat+Canadian+Wheat+Board/2468693/story.html |title=Top Court ruling a defeat for Canadian Wheat Board |access-date=2010-01-22 |date=2010-01-22 |publisher=Vancouver Sun |archive-date=2010-01-25 |archive-url=https://web.archive.org/web/20100125162651/http://www.vancouversun.com/news/Court+ruling+defeat+Canadian+Wheat+Board/2468693/story.html |url-status=dead }}</ref> | ||
* December 7, 2011: Federal Court judge Douglas Campbell rules the Conservative government broke the law in introducing legislation to end the Wheat Board.<ref>{{cite |
* December 7, 2011: Federal Court judge Douglas Campbell rules the Conservative government broke the law in introducing legislation to end the Wheat Board.<ref>{{cite news|url=https://www.theglobeandmail.com/news/politics/ottawa-broke-law-on-wheat-board-court-rules/article2263351/ |title=Ottawa broke law on Wheat Board, court rules. |access-date=2011-12-09 |date=2011-12-07 |publisher=The Globe and Mail |location=Toronto}}</ref> | ||
* December 15, 2011: |
* December 15, 2011: Bill C-18, the Marketing Freedom for Grain Farmers Act, which ends the CWB Single Desk, receives royal assent.<ref>{{cite web|url=http://www.parl.gc.ca/HousePublications/Publication.aspx?Docid=5339113&file=4 |title=An Act to reorganize the Canadian Wheat Board and to make consequential and related amendments to certain Acts. |access-date=2011-12-09 |date=2011-12-07 |publisher=LegisInfo }}</ref> | ||
* June 18, 2012: Federal Court of Appeal upholds Bill C-18<ref> |
* June 18, 2012: Federal Court of Appeal upholds Bill C-18.<ref>{{cite news| url=https://www.theglobeandmail.com/news/politics/judge-backs-ottawas-bid-to-break-up-wheat-board-monopoly/article4332304/ | location=Toronto | work=The Globe and Mail | title=Judge backs Ottawa's bid to break up wheat-board monopoly | date=2012-06-18}}</ref> | ||
*August 1, 2012: end of monopsony takes effect | *August 1, 2012: end of monopsony takes effect | ||
===Wheat farmers, railways and CWB=== | |||
==Criticism== | |||
] | |||
Arguments in favour of privatization believe that farmers should be allowed to opt out of the board.{{Citation needed|date=November 2011}} Others believe that they could get a better price for their grain than the board itself and would like to market their own grain.{{Citation needed|date=November 2011}} | |||
Ian Robson, whose great-grandfather helped start the co-operative pool system, argued that a multi-generational small farmer like himself depended on the CWB to balance the power of the railway. Robson claims that, "We're captive to the railways, and you can see how that's turning out. Transport Canada is supposed to safeguard our interests, but they're afraid to antagonize the railways."<ref name="farmers_miss_CWB_2014" /> Before the CWB was sold by the federal government to foreign investors in 2014, the CWB owned 3,375 CWB railway cars.<ref name="farmers_miss_CWB_2014">{{cite news |publisher=The Globe and Mail |title=Why so many farmers miss the Wheat Board |author=Jake MacDonald|date=27 November 2014 |access-date=3 August 2015 |url=https://www.theglobeandmail.com/report-on-business/rob-magazine/why-so-many-farmers-miss-the-wheat-board/article21810531/?from=23966156|author-link=Jake MacDonald }}Jake MacDonald's special report for the Globe and Mail covers a number of aspects of the CWB in depth.</ref> By 2014 CP was shaped by CEO ] and American activist shareholder ]. Americans own 73% of CP shares while Canadians and Americans own 50% of CN.<ref name="farmers_miss_CWB_2014" /> In order to improve returns for their shareholders, railways cut back on their workforce and downsized the number of locomotives.<ref name="farmers_miss_CWB_2014" /> ]'s director, Wade Sobkowich, argued that railways were increasing profitability by reducing capacity. At a time when grain farmers are competing with crude oil producers for rail cars, they are not succeeding in getting the rail cars they need.<ref name="farmers_miss_CWB_2014" /> | |||
The total acres seeded to ] in western provinces has often exceeded that of wheat.{{Citation needed|date=July 2011}} While an increased canola crop is popular now, it may change based on market fluctuations, and this destabilizes the work food supply, much like corn-for-ethanol subsidies in the US caused a massive increase in world food prices in the 2000s.{{Citation needed|date=November 2011}} | |||
In 2014, even though CN and CP were threatened by ] with fines for not meeting the "minimum volumes under the Fair Rail for Grain Farmers Act," the monetary penalties were not hefty enough to impact on railways that generate revenues of roughly $200 million per week.<ref name="farmers_miss_CWB_2014" /> | |||
A study by authors Colin A. Carter and R. M. A. Loyns found that measurable costs of the single-desk to farmers exist, they vary and could be as high as $20 per tonne in any year for wheat{{Citation needed|date=December 2011}}. The CWB's operating costs were paid out of the revenue it earned on the sale of farmers' grain and its financial trading activities. For barley growers, they estimated the hidden costs of the Board to be larger than $20 per tonne.<ref>{{cite web|url=http://www1.agric.gov.ab.ca/$department/deptdocs.nsf/all/agc2248 |title=The Economics of Single Desk Selling of Western Canadian Grain: Executive Summary |publisher=.agric.gov.ab.ca |date= |accessdate=2011-02-14}}</ref> | |||
===CWB and tendering process=== | |||
Some opponents of the board's monopsony have suggested it to be replaced by a 'dual market' system.{{Citation needed|date=October 2011}} 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 viable alternative as a dual market would effectively end the board's monopsony and any benefits that it may give to farmers. | |||
In 2006 the four top grain handling companies in Western Canada—], ], ], and ] held nearly 50% of the primary storage capacity. According to University of Saskatchewan professor, Murray Fulton, "This level of concentration, along with a lack of excess capacity" gave grain handling firms market power to raise prices above the cost of providing the service.<ref name="Fulton_2006" /> Since 2001 the CWB encouraged greater competition among the grain companies by "operated a tendering process for approximately 20 to 25 percent of the grain destined for export." The grain handling companies had to enter competitive bids to the CWB. CWB obtained market power by selecting the best bid as one seller as opposed to a large number of sellers (namely farmers) attempting to negotiate the best price.<ref name="Fulton_2006">{{Cite report |url=https://ageconsearch.umn.edu/record/31787 |title=The Canadian Wheat Board in an Open Market: The Impact of Removing the Single-Desk Selling Powers |last=Fulton |first=Murray E. |date=2006 |doi=10.22004/AG.ECON.31787 |location=Saskatoon, Saskatchewan |language=en}}</ref> | |||
{{blockquote|"The CWB's mandate was to pay farmers a base price for their grain, identify markets, negotiate the best price, deliver the goods, issue advance cheques and make final payment after the crop was sold. If the wheat market went up, farmers pocketed the profits. If the market went down, the government absorbed the loss. Nothing was subtracted from the farmer's share except the cost of marketing and delivery."|] ''The Globe and Mail'' 2014}} | |||
Opponents argue that because the benefits farmers receive from the CWB increases their land value, elimination of the CWB monopsony will lower the value of their land.{{Citation needed|date=July 2011}} Lower land prices would make Canadian farmers more competitive but could also leave many owing more than the value of their reduced land. Retiring farmers selling their land could be faced with a much reduced retirement fund but new entrants into farming would be able to purchase land at lower cost. | |||
====Modern criticism==== | |||
] | |||
Arguments in favour of privatization believe that farmers should be allowed to opt out of the board.<ref name="senate_1998">{{citation |url=https://sencanada.ca/en/Content/Sen/committee/361/agri/05evb-e |title=Proceedings of the Standing Senate Committee on Agriculture and Forestry |number=5|location=Brandon, Manitoba |date=March 24, 1998 |access-date=3 August 2015}}</ref> Others believe that they could get a better price for their grain than the board itself and would like to market their own grain.<ref name="senate_1998" /> For many Western Canadian farmers, the argument over the CWB Single Desk was about personal freedom{{Citation needed|date=November 2015}}—the freedom to market their production of crops in the manner they choose. | |||
The Single Desk control of price and the ability of farmers to deliver wheat and barley created an interest in other crops, causing a surge in acres of canola and pulse crops—crops with no delivery or price controls. This led to a decline in wheat acres and an increase in other crops. Now, with equal delivery opportunity, relative prices are the driving force in making cropping decisions, leading to an appropriate mix of crops based on relative global demand. | |||
Some opponents of the board's Single Desk power suggested it should be replaced by a 'dual market' system.{{Citation needed|date=October 2011}} This was 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 was not a viable alternative as a dual market would effectively end the board's Single Desk power and any perceived benefits that it may have given farmers. | |||
Opponents argue that because the perceived benefits farmers received from the CWB increases their land value, elimination of the CWB Single Desk would lower the value of their land.{{Citation needed|date=July 2011}} Lower land prices would make Canadian farmers more competitive but could also leave many owing more than the value of their reduced land. Retiring farmers selling their land could be faced with a much reduced retirement fund but new entrants into farming would be able to purchase land at lower cost. (This is all based on the theory that the CWB provided a net benefit to farmers, which was never proved.) | |||
Some CWB opponents have argued that much of the lower quality land is in close proximity to the US border and would be the first to realize the benefits of the US market.{{Citation needed|date=October 2011}} | Some CWB opponents have argued that much of the lower quality land is in close proximity to the US border and would be the first to realize the benefits of the US market.{{Citation needed|date=October 2011}} | ||
=== |
=====Support for the CWB===== | ||
Although the Board was reformed to meet free market conditions under the ] and the ] Treaty, American producers continually complain. Despite numerous challenges and much posturing by the ], 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 ] counterparts are heavily subsidized.<ref>{{cite web|url=http://www.ustr.gov/Document_Library/Fact_Sheets/2004/Real_Results_Leveling_the_Playing_Field_for_American_Workers_Farmers.html |title=Real Results: Leveling the Playing Field for American Workers and Farmers |accessdate=2007-08-27 |date=2004-07-08 |publisher=United States Trade Representative |archiveurl = http://web.archive.org/web/20070308112407/http://www.ustr.gov/Document_Library/Fact_Sheets/2004/Real_Results_Leveling_the_Playing_Field_for_American_Workers_Farmers.html <!-- Bot retrieved archive --> |archivedate = 2007-03-08}}</ref><ref name="usda.gov">{{cite web|url=http://www.usda.gov/agency/obpa/Budget-Summary/2006/06.FFAS.htm |title=USDA Budget Summary 2006 - Farm and Foreign Agricultural Services: |accessdate=2007-08-27 |publisher=United States Department of Agriculture |archiveurl = http://web.archive.org/web/20070320192900/http://www.usda.gov/agency/obpa/Budget-Summary/2006/06.FFAS.htm <!-- Bot retrieved archive --> |archivedate = 2007-03-20}}</ref><ref>{{cite web|url=http://www.openeurope.org.uk/media-centre/bulletin.aspx?bulletinid=27 |title=New EU budget: a historic missed opportunity |accessdate=2007-08-27 |date=2005-12-20 |publisher=Open Europe }}</ref> The attacks on the Wheat Board are one of the major irritants in ] between Canada and the United States. | |||
In a September 2011 plebiscite (referendum) conducted by Meyers Norris Penny, 62% of CWB farmers voted that they wanted to keep the wheat board and its Single Desk power.<ref name="cwb.ca">{{cite web |url=http://www.cwb.ca/public/en/newsroom/releases/2011/news_release.jsp?news=091211.jsp |title=Farmers vote to keep Canadian Wheat Board |access-date=2011-09-12 |date=2011-09-12 |publisher=CWB |archive-url=https://web.archive.org/web/20120119174622/http://www.cwb.ca/public/en/newsroom/releases/2011/news_release.jsp?news=091211.jsp |archive-date=2012-01-19 }}</ref> Proponents of maintaining the CWB stated that the collective bargaining power of the wheat board gives farmers a better price than they would have if they were individually marketing to large multi-national corporations.<ref name="CWB_facts_2015">{{citation |url=http://www.cwbafacts.ca/constitutional-and-classaction/ |title=Updates & News on farmers' court actions to restore our Canadian Wheat Board |date=13 July 2015 |access-date=3 August 2015 |publisher=Friends of the Canadian Wheat Board}}</ref> CWB opponents disagreed, arguing that there was no evidence of better returns for farmers. | |||
===Western alienation=== | |||
At this time, farmers already had the ability to market all the crops save wheat and malt barley independently, meaning it is possible to succeed marketing grain without board oversight.{{Citation needed|date=July 2011}} This, however, may make farmers more susceptible to fluctuations in the commodity market and to focus more of their time on the business aspect of farming, rather than farming.{{Citation needed|date=November 2011}} The Wheat Board attempted to offer producers more options in its latter years—for example, farmers could sell their wheat with binding ]s to the Wheat Board that attempted to pay the same price that they would get for their grain in the U.S. | |||
The fact that the Wheat Board primarily markets crops produced in Western Canada has become a source of ] and even ] for many Western Canadian farmers. Farmers in Eastern Canada (east of Manitoba) and most of British Columbia (non-Peace River) are exempt from the CWB's monopsony control of non-feed wheat and barley - these have their own marketing boards, but they are not compulsory. | |||
Supporters of the board and labour unions believed the CWB gave individual farmers increased marketing power in a world market which got them a higher price than they would have otherwise gotten, not only through the efficiencies of scale, but as well by exercising ] marketing power on the selling side, especially for ] wheat, although the evidence of this is weak or non-existent. 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 Single Desk, although the study and its methodology was widely refuted.<ref>{{cite web |url=http://www.gov.sk.ca/news?newsId=cf309d89-9570-481a-ab87-389ae5651ca1 |title=UPSHALL DELIVERS STRONG PRO-CANADIAN WHEAT BOARD MESSAGE - Government of Saskatchewan |publisher=Gov.sk.ca |date=1996-02-16 |access-date=2011-02-14 |archive-date=2011-06-10 |archive-url=https://web.archive.org/web/20110610231356/http://www.gov.sk.ca/news?newsId=cf309d89-9570-481a-ab87-389ae5651ca1 |url-status=dead }}</ref> Supporters of the Single Desk feared that an end to the board would put farmers in a situation like in the early part of the 20th century where farmers effectively competed with each other to sell their grain, effectively putting them at the mercy of big ] and the railroad monopolies, believing that would reduce farm incomes. The counter-argument is that producers of non-Board crops such as canola do not seem to have this problem.<ref>{{Cite web|url=https://sencanada.ca/en/committees/|title=Committees (44th Parliament, 1st Session)|first=Senate of|last=Canada|website=SenCanada}}</ref> | |||
===Calls for abolition=== | |||
There have been calls by many groups to abolish the Wheat Board{{Citation needed|date=November 2011}}. Many of these groups have taken their fight to the internet to spread their message and gain support for their cause{{Citation needed|date=November 2011}}. While many are focused on the Canadian Wheat Board, the others have concentrated on international wheat boards, the other primary target being the ], before the AWB itself converted to a private firm, leaving the CWB as the only significant agricultural State Trading Enterprise (STE) exporter worldwide. At the moment the movement is in a grassroots stage, and it is uncertain as to whether or not it will gain widespread support. On December 7, 2008, CWB permit book holders voted in favour of maintaining the wheat board by electing four pro-board candidates with one marketing choice candidate being elected. Stewart Wells, president of the National Farmers Union, said " The message can't be any clearer".<ref>CWB Election Results Show Support for CWB Monopoly - Johnstone, Regina Leader Post, 8 Dec, 2008</ref> Others argue that the voter's list was flawed, as it includes many small or part-time producers who may not deliver to the Board, as well as non-producers such as landowners whose livelihood might not solely rely on farming.<ref>{{cite web|url=http://www.cwb.ca/public/en/hot/election/pdf/cwbelectpanel.pdf|title=CWB Report on Elections Process|publisher = CWB Website }}</ref> | |||
In December 2008, the draft modalities text of the ] was revised such that upon signing in its revised form, the CWB would lose statutory privileges such as the single desk within 5 years of the signing.<ref>{{cite web|url=http://www.wto.org/english/tratop_E/agric_e/agchairtxt_dec08_a_e.pdf |title=6 December 2008 revised WTO Doha draft modalities text (see Annex K)|WTO Website accessdate=2009-06-04 }}</ref> | |||
=== |
=====American complaints===== | ||
One of the aims of the Conservative government since coming to power in January 2006 was to end the monopsony on Western Canadian wheat and barley. The Conservatives have been unable to get this change approved by Parliament because they had only a minority of the seats until the ] and all of the opposition parties support the monopsony, while they lost a court battle to unilaterally dismantle the CWB without an act of Parliament.<ref name=WWWYKI>{{cite web|url=http://www.cwb.ca/public/en/hot/legal/barley/ |title=CWB versus Attorney General Canada re: barley regulations |accessdate=2007-08-27 |date=2007-07-31 |publisher=Canadian Wheat Board }}</ref> In the aftermath, Harper and Strahl stated their intent to continue removing the traditional role of the CWB particularly in regards to barley (which is generally a more corporate crop<ref>{{cite web|url=http://www.nupge.ca/news_2006/n11my06a.htm |title=Why workers everywhere should support the Canadian Wheat Board: |accessdate=2007-08-27 |date=2006-05-11 |publisher=National Union of Public and General Employees }}</ref>), perhaps through Parliament.<ref>{{cite news|url=http://www.cbc.ca/canada/saskatchewan/story/2007/08/02/harper-barley.html?ref=rss |title=Harper 'disappointed' by court decision on barley |accessdate=2007-08-27 |date=2007-08-02 |publisher=CBC News }}</ref><ref>''Stand Up For Canada'', 2006, Conservative Party of Canada Federal Election Platform, page 18</ref><ref>{{dead link|date=February 2011}}</ref> | |||
Although the Board was reformed to meet free market conditions under the ] and the ] Treaty, American producers continually complained. Despite numerous challenges and much posturing by the ], 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 ] counterparts are heavily subsidized.<ref>{{cite web|url=http://www.ustr.gov/Document_Library/Fact_Sheets/2004/Real_Results_Leveling_the_Playing_Field_for_American_Workers_Farmers.html |title=Real Results: Leveling the Playing Field for American Workers and Farmers |access-date=2007-08-27 |date=2004-07-08 |publisher=United States Trade Representative |archive-url = https://web.archive.org/web/20070308112407/http://www.ustr.gov/Document_Library/Fact_Sheets/2004/Real_Results_Leveling_the_Playing_Field_for_American_Workers_Farmers.html <!-- Bot retrieved archive --> |archive-date = 2007-03-08}}</ref><ref name="usda.gov">{{cite web|url=http://www.usda.gov/agency/obpa/Budget-Summary/2006/06.FFAS.htm |title=USDA Budget Summary 2006 - Farm and Foreign Agricultural Services |access-date=2007-08-27 |publisher=United States Department of Agriculture |archive-url = https://web.archive.org/web/20070320192900/http://www.usda.gov/agency/obpa/Budget-Summary/2006/06.FFAS.htm <!-- Bot retrieved archive --> |archive-date = 2007-03-20}}</ref><ref>{{cite web |url=http://www.openeurope.org.uk/media-centre/bulletin.aspx?bulletinid=27 |title=New EU budget: a historic missed opportunity |access-date=2007-08-27 |date=2005-12-20 |publisher=Open Europe |archive-url=https://web.archive.org/web/20070808121707/http://www.openeurope.org.uk/media-centre/bulletin.aspx?bulletinid=27 |archive-date=2007-08-08 }}</ref> The attacks on the Wheat Board were, at the time, one of the major irritants in ] between Canada and the United States. | |||
After winning a majority in the May 2011 general election, the Conservative government announced its intention to remove the CWB monopsony through legislation.<ref>{{cite news| url=http://www.reuters.com/article/2011/05/11/cargill-canada-idUSN1119804620110511 | work=Reuters | title=Grain monopoly end should be slow, orderly-Cargill Canada CEO | date=2011-05-11}}</ref> In response, the CWB held plebiscites on whether to keep the monopsonies on wheat and barley. The results were released on September 12, 2011; 51 percent of barley growers and 62 percent of wheat growers voted to maintain the board's monopsony.<ref name="cwb.ca"/> Notwithstanding, the government plans to remove the monopsonies on August 1, 2012 regardless of the plebiscites' results. In defending this policy, Agriculture Minister ] claimed the CWB plebiscites were seriously flawed and that the Conservatives' election victory gave them a mandate to remove the monopsonies.{{Citation needed|date=August 2011}} | |||
=====Western alienation===== | |||
The government recently moved up the timetables to Christmas 2011, according to the CWB, prompting them to launch a protest campaign, urging Canadians, as well farmers to speak out to Stephen Harper, against the decision to end the monopsony. Meanwhile, the government issued leaflets explaining what would "bring marketing freedom."<ref>{{cite news|url=http://www.cbc.ca/news/canada/manitoba/story/2011/05/18/mb-wheat-board-demise.html?ref=rss | title=Wheat Board monopoly to end in 2012: minister |date=2011-05-18 |publisher=CBC}}</ref><ref>{{cite news|url=http://www.calgaryherald.com/business/Wheat+board+launches+campaign+against+plan+monopoly/5672812/story.html | title=Wheat board launches campaign against plan to end monopoly |date=2011-11-08 |publisher=The Calgary Herald }}</ref> | |||
The fact that the Wheat Board primarily marketed crops produced in Western Canada became a source of ] and even ] for many Western Canadian farmers. Farmers in Eastern Canada (east of Manitoba) and most of British Columbia (non-Peace River) were exempt from the CWB's Single Desk control of non-feed wheat and barley—Ontario has its own marketing board, but it is not compulsory. | |||
=====Calls for abolition of the CWB===== | |||
There had been calls by many groups to abolish the Wheat Board.{{Citation needed|date=November 2011}} Many of these groups took their fight to the Internet to spread their message and gain support for their cause.{{Citation needed|date=November 2011}} While many were focused on the Canadian Wheat Board, others concentrated on international wheat boards, the other primary target being the ], before the AWB itself converted to a private firm, leaving the CWB as the only significant agricultural State Trading Enterprise (STE) exporter worldwide, if one ignores Chinese ] (SOE). On 7 December 2008, CWB permit book holders voted in favour of maintaining the wheat board by electing four pro-board candidates with one marketing choice candidate being elected. Stewart Wells, president of the National Farmers Union, said "The message can't be any clearer".<ref>CWB Election Results Show Support for CWB Monopoly - Johnstone, Regina Leader Post, 8 Dec 2008</ref> Others argued that the voter's list was flawed, as it included many small or part-time producers who may not deliver to the Board, as well as non-producers such as landowners whose livelihood might not solely rely on farming.<ref>{{cite web|url=http://www.cwb.ca/public/en/hot/election/pdf/cwbelectpanel.pdf|title=CWB Report on Elections Process|publisher=CWB Website|access-date=2009-06-04|archive-url=https://web.archive.org/web/20101214235714/http://cwb.ca/public/en/hot/election/pdf/cwbelectpanel.pdf|archive-date=2010-12-14}}</ref> | |||
In December 2008, the draft modalities text of the ] was revised such that upon signing in its revised form, the CWB would lose statutory privileges such as the Single Desk within five years of the signing.<ref>{{cite web|url=http://www.wto.org/english/tratop_E/agric_e/agchairtxt_dec08_a_e.pdf |title=6 December 2008 revised WTO Doha draft modalities text (see Annex K)|WTO Website |access-date=2009-06-04}}</ref> | |||
===Transfer of CWB to Foreign Hands (2012–2015)=== | |||
One of the aims of the Conservative government since coming to power in January 2006 was to end the Single Desk marketing power on Western Canadian wheat and barley. The Conservatives had been unable to get this change approved by Parliament because they held a minority of seats until the ] and all opposition parties supported the Single Desk. The Conservatives also lost a court battle to unilaterally dismantle the CWB without an act of Parliament.<ref name=WWWYKI>{{cite web |url=http://www.cwb.ca/public/en/hot/legal/barley/ |title=CWB versus Attorney General Canada re: barley regulations |access-date=2007-08-27 |date=2007-07-31 |publisher=Canadian Wheat Board |archive-url=https://web.archive.org/web/20070812015705/http://www.cwb.ca/public/en/hot/legal/barley/ |archive-date=2007-08-12 }}</ref> In the aftermath, Harper and then Minister of Agriculture Chuck Strahl stated their intent to continue with the removal of the traditional role of the CWB, particularly in regards to barley (which is generally a more corporate crop<ref>{{cite web |url=http://www.nupge.ca/news_2006/n11my06a.htm |title=Why workers everywhere should support the Canadian Wheat Board |access-date=2007-08-27 |date=2006-05-11 |publisher=National Union of Public and General Employees |archive-url=https://web.archive.org/web/20070919174914/http://www.nupge.ca/news_2006/n11my06a.htm |archive-date=2007-09-19 }}</ref>), perhaps through Parliamentary action.<ref>{{Cite news |date=2007-08-02 |title=Harper 'disappointed' by court decision on barley |url=https://www.cbc.ca/news/canada/saskatchewan/harper-disappointed-by-court-decision-on-barley-1.648911 |access-date=2007-08-27 |publisher=CBC News}}</ref><ref>''Stand Up For Canada'', 2006, Conservative Party of Canada Federal Election Platform, page 18</ref><ref>{{cite web |url=https://www.conservative.ca/media/20060113-Platform.pdf |title=Stand Up For Canada|website=www.conservative.ca |archive-url=https://web.archive.org/web/20070303170955/http://www.conservative.ca/media/20060113-Platform.pdf |archive-date=March 3, 2007}}</ref> | |||
After winning a majority in the May 2011 general election, the Conservative government announced its intention to remove the CWB Single Desk through legislation.<ref>{{cite news | url=https://www.reuters.com/article/cargill-canada-idUSN1119804620110511 | work=Reuters | title=Grain monopoly end should be slow, orderly-Cargill Canada CEO | date=2011-05-11 | access-date=2017-06-30 | archive-date=2015-10-19 | archive-url=https://web.archive.org/web/20151019183122/http://www.reuters.com/article/2011/05/11/cargill-canada-idUSN1119804620110511 | url-status=live }}</ref> In response, the CWB held plebiscites on whether to keep the Single Desk power on wheat and barley. The results were released on September 12, 2011; 51 percent of barley growers and 62 percent of wheat growers voted to maintain the board's Single Desk.<ref name="cwb.ca"/> Notwithstanding, the government removed the Single Desk on August 1, 2012 ignoring the plebiscites' results. In defending this policy, Agriculture Minister ] claimed the CWB plebiscites were seriously flawed and that the Conservatives' election victory gave them a mandate to remove the Single Desk.{{Citation needed|date=August 2011}} | |||
According to the CWB, the government advanced the timetables to Christmas 2011, prompting them to launch a protest campaign urging Canadians as well as farmers to speak out against the government's decision to end the Single Desk. Meanwhile, the government issued leaflets explaining what would "bring marketing freedom."<ref>{{Cite news |date=2011-05-18 |title=Wheat Board monopoly to end in 2012: minister |url=https://www.cbc.ca/news/canada/manitoba/wheat-board-monopoly-to-end-in-2012-minister-1.1006743 |publisher=CBC}}</ref><ref>{{cite news |url=https://calgaryherald.com/business/Wheat+board+launches+campaign+against+plan+monopoly/5672812/story.html |title=Wheat board launches campaign against plan to end monopoly |date=2011-11-08 |work=The Calgary Herald }}{{Dead link|date=October 2019 |bot=InternetArchiveBot |fix-attempted=yes }}</ref> | |||
The ] instituted a timeline for the eventual ] of CWB, requiring the board to formulate a plan by 2016, to be implemented in 2017.<ref name=cbc-cwbprivate>{{cite web|title=Canadian Wheat Board prepares for corporate takeover|url=http://www.cbc.ca/news/politics/canadian-wheat-board-prepares-for-corporate-takeover-1.2853874|website=CBC News|access-date=15 April 2015}}</ref> On April 15, 2015, it was announced that a 50.1% majority stake in CWB would be acquired by Global Grain Group, a joint venture between Bunge Canada—a subsidiary of ], and SALIC Canada—a subsidiary of the Saudi Agricultural and Livestock Investment Company, for $250 million. The remaining equity of CWB will be held by its member farmers.<ref name=gandm-cwbsold>{{cite news|title=U.S., Saudi firms to buy former Canadian Wheat Board|url=https://www.theglobeandmail.com/report-on-business/us-saudi-firms-to-buy-former-canadian-wheat-board/article23966156/|access-date=15 April 2015|work=The Globe and Mail|date=15 April 2015}}</ref> | |||
The sale to G3 took place while a "Farmers of North America" led group of Western Canadian farmers attempted to raise funds to purchase the CWB and keep it Canadian farmer owned rather than selling it to foreign corporations. The group was rebuffed despite having a higher offer, ($349 million?){{Citation needed|date=August 2019}} on grounds that they had not raised the funds. (the time frame was artificially short for the kind of offer FNA was attempting).{{Citation needed|date=August 2019}} | |||
On 12 June 2015, the Department of Finance released<ref>{{Cite web |url=http://fin.gc.ca/drleg-apl/2015/nwmm-amvm-0615-02-eng.asp |title=Notice of Ways and Means Motion to Amend the Income Tax Act |access-date=2015-06-21 |archive-date=2015-06-22 |archive-url=https://web.archive.org/web/20150622041824/http://fin.gc.ca/drleg-apl/2015/nwmm-amvm-0615-02-eng.asp }}</ref> draft legislation to handle the tax consequence to farmers, and to the Trust which will hold 49.9% of CWB in trust for farmers (proposed section 135.2 of the Income Tax Act). No news release was issued to explain the legislation. An explanation of how the legislation works is included in the 48th edition of Carswell's Practitioner's Income Tax Act <ref>{{Cite web|url=http://www.carswell.com/pita|title = Homepage}}</ref> and Carswell's Taxnet Pro.<ref>{{Cite web|url=https://signon.thomsonreuters.com/?productid=CRSWTNP&lr=0&culture=en-CA&returnto=https%3a%2f%2fv3.taxnetpro.com%2fCosi%2fSignOn&tracetoken=0403231815480g-lE2d3DEHwp1d33l9EkP37Vf8DIy_r24pMNpnt9w4bvX9bTlViX4Er7pnlozqSq3Vrm4MvJDr-viDPHVovlf_8n_SSvyM9RdN7Seip_EMmevidmvXMgAYsPeG0HaMonWVPainh3ySlvgzhNFa1f0U-_gclOjdTnHwav2oLu6taxv_mdQgyaECY7nm5TXydT91xMdn_QKm8d6LGvERTastNZ-88ydvmbCEnlBwd-MD37kqZphBr5DK8G00hKN5iE9yjjd0bs3OVz5kgk3C27czrNwtu55UI-8fqhi0CVotpnvdHsB_hL8XB7vM3p3vrudykb4hi2f3U2m3VMU0eW7nw3581qCDMe7SqJDakpLqxlQMoRjwEQ3GelihxkqXUa|title=Taxnet Pro Signon|website=signon.thomsonreuters.com}}</ref> | |||
==See also== | ==See also== | ||
*] |
*] – President of the Canadian Wheat Board until 1970. | ||
*], ministry responsible for Freshwater Fish Marketing Corporation (FFMC), a monopsony for commercial freshwater fishermen in northwestern Ontario, Manitoba, Saskatchewan, Alberta and the Northwest Territories<ref>http://fullcomment.nationalpost.com/2012/04/30/colin-craig-free-the-fishermen</ref> | *], ministry responsible for ] (FFMC), a monopsony for commercial freshwater fishermen in northwestern Ontario, Manitoba, Saskatchewan, Alberta and the Northwest Territories<ref>{{Cite web |url=http://fullcomment.nationalpost.com/2012/04/30/colin-craig-free-the-fishermen |title=Free the fishermen | Full Comment | National Post |access-date=2012-05-09 |archive-url=https://archive.today/20120714001150/http://fullcomment.nationalpost.com/2012/04/30/colin-craig-free-the-fishermen/ |archive-date=2012-07-14 }}</ref> | ||
*] | |||
*] | |||
==References== | ==References== | ||
{{reflist| |
{{reflist|30em}} | ||
==External links== | ==External links== | ||
* |
* {{Official website|http://www.cwb.ca}} | ||
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Latest revision as of 05:19, 18 December 2024
Defunct Canadian marketing boardThis article has multiple issues. Please help improve it or discuss these issues on the talk page. (Learn how and when to remove these messages)
|
Commission canadienne du blé | |
Canadian Wheat Board Building (on right) | |
Agency overview | |
---|---|
Formed | 1935 (1935) |
Dissolved | 2015 (2015) |
Type | Marketing board |
Jurisdiction | Government of Canada |
Headquarters | Winnipeg, Manitoba |
Parent agency | Agriculture and Agri-Food Canada |
Key document |
|
Website | www |
The Canadian Wheat Board (French: Commission canadienne du blé) was a marketing board for wheat and barley in Western Canada. Established by the Parliament of Canada on 5 July 1935, its operation was governed by the Canadian Wheat Board Act as a mandatory producer marketing system for wheat and barley in Alberta, Saskatchewan, Manitoba, and a small part of British Columbia. It was illegal for any farmer in areas under the CWB's jurisdiction to sell their wheat and barley through any other channel than the CWB. Although often called a monopoly, it was actually a monopsony since it was the only buyer of wheat and barley. It was a marketing agency acting on behalf of Western Canadian farmers, passing all profits from its operation back to farmers. Its market power over wheat and barley marketing was referred to as the "Single Desk".
Amid criticism, the Canadian Wheat Board's Single Desk marketing power officially ended on 1 August 2012 as a result of Bill C-18, also known as the Marketing Freedom for Grain Farmers Act, which was tabled by the Harper government and passed in December 2011. The Canadian Wheat Board changed its name to simply CWB, reflecting its changed status. CWB continued to operate as a grain company, although the bill also set a timeline for the eventual privatization of CWB. On 15 April 2015, it was announced that a 50.1% majority stake in CWB would be acquired by Global Grain Group, a joint venture of Bunge Limited and the Saudi Agricultural and Livestock Investment Company, for $250 million. CWB was combined with the grain assets of Bunge Canada to form G3 Canada Limited.
The third-highest sales year for wheat industry in Canada was 2011–2012 when the CWB "sold $7.2-billion worth of grain to more than 70 countries, $4.9 billion of which was paid back to farmers."
History
First wheat boards
By the early 20th century in Western Canada, grain purchasing, transportation and marketing were dominated by large companies headquartered outside the region, such as the Canadian Pacific Railway and the trading companies which dominated the Winnipeg Grain Exchange. Producers were deeply suspicious of the business practices of these companies and hostile to their positions of power. Farmers were impressed by the success of state-led marketing as it was practised during World War I. The government created a series of boards in and around the war, each with progressively more power to control the grain trade. The Board of Grain Commissioners of 1912 was purely for regulation (to supervise grading, etc.), but by 1915 the government had seized control of all wheat exports to help the war effort, and by 1917 futures trading on the Winnipeg Exchange was banned. In 1917, the new Board of Grain Supervisors was given monopoly powers over wheat, and fixed uniform prices across the country. Soon afterwards, the Board took over marketing of other crops as well. Farmers were worried that after the war, prices would crash and various agrarian groups lobbied Ottawa to keep the Board in place. The government relented by creating the Canadian Wheat Board for the 1919 crop only. Farmers got a guaranteed price for that crop, paid immediately, and later a further payment once the Board had completed the year's sales. This system of guaranteed prices and distributed income was extremely popular and when the Board dissolved in 1920, many farmers were livid. It certainly did not help that, "from a peak of $2.85 per bushel in September, 1920 began a slow and sickening decline to less than a dollar a bushel in late 1923." This marked contrast to the stable prices of 1919–1920 Board seemed to confirm farmers' suspicions of market trading.
Interregnum (1920–1935)
Main article: wheat pools in CanadaAfter the dissolution of the early board in 1920, farmers turned to the idea of farmer-owned cooperatives. Cooperative grain elevator operators already existed, like United Grain Growers, which had already been started in 1917. In 1923 and 1924 the wheat pools were created to buy Canadian wheat and resell it overseas. The Alberta Wheat Pool, the Saskatchewan Wheat Pool, and Manitoba Pool Elevators quickly became giants in the industry and displaced the private traders. However they did not hedge against falling prices (instead relying on provincial government guarantees), and during the price collapse of 1929, they effectively went bankrupt. The majority of farmers did not want the private traders to return, and now it also seemed impossible for them to own their own marketing companies, so the idea of a government marketing board was revived.
Revival and flourishing (1935–2000)
The Canadian Wheat Board was re-created in 1935 with the aim of controlling grain prices, so as to benefit farmers devastated by the Great Depression. During the Second World War, the authority of the Board was expanded, and the Board was given the authority to set statutory maximums on wheat, oats, barley, flax, and corn between December, 1941 until expiry after the war. Membership was made compulsory for Western Canadian farmers in 1943 via the War Measures Act, now with the purpose of aiding the war effort. In April, 1943 the Board was also authorized to buy rapeseed and sunflowers.
Between 1958 and 1970 the CWB was chaired by William Craig McNamara, and he managed to perennialise the CWB in 1965, which was until then subject to amendments by Parliament when they periodically extended the Board's duration. McNamara convinced Parliament to end the time limit in the Act, thereby creating a permanent Board. CWB control over interprovincial shipments of feed grains became a public issue during the grains crisis in 1969 to 1972 and was removed. Only non-feed wheat and barley remained controlled by the CWB.
Anti-GMO stance of the CWB (2004)
The Canadian Wheat Board was instrumental in stopping the genetically modified (GM) wheat of Monsanto in 2004. As a united voice for wheat farmers, the CWB conducted market research which showed that international markets did not want GM wheat and would reject wheat exports from Canada if GM wheat was approved, because of the risk of contamination. The CWB also surveyed wheat farmers and found many did not want GM wheat. The CWB presented research and the views of wheat farmers to the government.
Late operations
The farmers delivered their wheat and barley to grain elevators throughout the crop year. The Board acted as a single desk marketer of wheat and barley on behalf of prairie farmers. Upon delivery to an elevator, farmers received an initial payment for their grain from the CWB that represented a percentage of the expected return for that grade from the pool account. After the end of the crop year, July 31, an interim payment and a final payment were paid to farmers, in addition to their initial payment, and so they would have received 100% of the return from the sale of the grain they delivered, less all overhead costs of the CWB. The initial payments were guaranteed by the Government of Canada so that farmers received payment even if there was a deficit in the pool account. Initial payments were set below expectations for the crop year, a risk factor that was built in to guard against the event that price expectations are not met.
Prior to the December 2011 passage of Bill C-18, An Act to reorganize the Canadian Wheat Board and to make consequential and related amendments to certain Acts, the CWB was governed by a 15-person Board of Directors, of which:
- Ten of the directors were elected by grain farmers in the western Canadian provinces of Alberta, Saskatchewan, Manitoba and parts of British Columbia;
- Four of the directors were appointed by Governor in Council on the recommendation of the Minister responsible for the Canadian Wheat Board;
- One was the President of the CWB, appointed by the Governor in Council, on the recommendation of the Minister responsible for the Canadian Wheat Board with certain restrictions including that the CWB Board of Directors must be consulted on the recommended candidate.
Upon the implementation of Bill C-18, the original elected board was removed and was replaced by four directors, appointed by the Governor in Council on the recommendation of the Minister of Agriculture, as well as the president, appointed by the Governor in Council on the recommendation of the Minister.
Until 15 December 2011, compliance with the wheat board for most farmers and elevators was mandatory under threat of punishable by fines and/or imprisonment. Farmers from Eastern Canada and most of British Columbia were not controlled by the Canadian Wheat Board and were able to market all their grain on the open market. The area of British Columbia known as The Peace River District fell under the jurisdiction of the Canadian Wheat Board. Bill C-18, the Marketing Freedom for Grain Farmers Act, reorganized the CWB to market grain through voluntary pooling.
Quality grading system
Unlike the United States, Canada had a tight grading system established by the Canadian Grain Commission and enforced by the CWB. This enforcement made it "possible to extract premiums for higher quality grain that is not possible in the United States." In an open market system Western Canadian farmers lose the benefits of a grading system.
Reorganisation (2006–2012)
Since 2006 when the Conservative Party came to power, Chuck Strahl, then Minister of Agriculture, worked towards the end of the Wheat Board's Single Desk, including the replacement of government appointees to the Board of Directors in favor of individuals who oppose the board's Single Desk, a gag order on Wheat Board staff, the firing of the pro-board President, and intervention in the election of farmer elected members of the Board of Directors.
- December 2006 CWB Board of Directors election. Only one of five farmer-elected seats went to opponents of the Canadian Wheat Board's Single Desk power on the selling of Canadian wheat and barley internationally. Since there was only one incumbent farmer-elected board member opposed to the Single Desk, only two out of ten farmer-elected directors were opposed to the Single Desk. Nonetheless, the government appointed five members to the board; supporters of the board's Single Desk would have only an eight to seven majority. Doubts have also been cast by some 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. These farmers were disqualified for such reasons as not having delivered any grain to the Wheat Board in the past two years or not having produced enough wheat or malt barley to have generated significant enough income from which to live off.
- December 19, 2006: Chuck Strahl dismisses CWB president Adrian Measner, an outspoken supporter of the Single Desk. This was done by Strahl with the statement "It's a position that serves at pleasure . And that position was no longer his." It was suggested that Measner had gone too far for refusing to remove pro-CWB documents from the Board website and also appearing at press conferences with opposition leader Stéphane Dion. The majority of the CWB's board of directors opposed the firing of Measner.
- March 28, 2007: Barley Plebiscite. 62% of farmers vote to end the wheat board's barley Single Desk power. Legislation to amend the act dies on order paper when the September 2008 election is called.
- February 26, 2008: Conservative government loses court battle over unilaterally dismantling the CWB because it was contrary to the Canadian Wheat Board Act.
- December 7, 2008: Board of Directors elections. Four of five candidates elected support the Single Desk marketing agency.
- January 21, 2010: Supreme Court of Canada sided with the federal government in its 2006 order barring the board from spending its money on lobbying.
- December 7, 2011: Federal Court judge Douglas Campbell rules the Conservative government broke the law in introducing legislation to end the Wheat Board.
- December 15, 2011: Bill C-18, the Marketing Freedom for Grain Farmers Act, which ends the CWB Single Desk, receives royal assent.
- June 18, 2012: Federal Court of Appeal upholds Bill C-18.
- August 1, 2012: end of monopsony takes effect
Wheat farmers, railways and CWB
Ian Robson, whose great-grandfather helped start the co-operative pool system, argued that a multi-generational small farmer like himself depended on the CWB to balance the power of the railway. Robson claims that, "We're captive to the railways, and you can see how that's turning out. Transport Canada is supposed to safeguard our interests, but they're afraid to antagonize the railways." Before the CWB was sold by the federal government to foreign investors in 2014, the CWB owned 3,375 CWB railway cars. By 2014 CP was shaped by CEO Hunter Harrison and American activist shareholder Bill Ackman. Americans own 73% of CP shares while Canadians and Americans own 50% of CN. In order to improve returns for their shareholders, railways cut back on their workforce and downsized the number of locomotives. Western Grain Elevator Association's director, Wade Sobkowich, argued that railways were increasing profitability by reducing capacity. At a time when grain farmers are competing with crude oil producers for rail cars, they are not succeeding in getting the rail cars they need.
In 2014, even though CN and CP were threatened by Transport Canada with fines for not meeting the "minimum volumes under the Fair Rail for Grain Farmers Act," the monetary penalties were not hefty enough to impact on railways that generate revenues of roughly $200 million per week.
CWB and tendering process
In 2006 the four top grain handling companies in Western Canada—Agricore United, Saskatchewan Wheat Pool, Pioneer Grain, and Cargill held nearly 50% of the primary storage capacity. According to University of Saskatchewan professor, Murray Fulton, "This level of concentration, along with a lack of excess capacity" gave grain handling firms market power to raise prices above the cost of providing the service. Since 2001 the CWB encouraged greater competition among the grain companies by "operated a tendering process for approximately 20 to 25 percent of the grain destined for export." The grain handling companies had to enter competitive bids to the CWB. CWB obtained market power by selecting the best bid as one seller as opposed to a large number of sellers (namely farmers) attempting to negotiate the best price.
"The CWB's mandate was to pay farmers a base price for their grain, identify markets, negotiate the best price, deliver the goods, issue advance cheques and make final payment after the crop was sold. If the wheat market went up, farmers pocketed the profits. If the market went down, the government absorbed the loss. Nothing was subtracted from the farmer's share except the cost of marketing and delivery."
— Jake MacDonald The Globe and Mail 2014
Modern criticism
Arguments in favour of privatization believe that farmers should be allowed to opt out of the board. 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 many Western Canadian farmers, the argument over the CWB Single Desk was about personal freedom—the freedom to market their production of crops in the manner they choose.
The Single Desk control of price and the ability of farmers to deliver wheat and barley created an interest in other crops, causing a surge in acres of canola and pulse crops—crops with no delivery or price controls. This led to a decline in wheat acres and an increase in other crops. Now, with equal delivery opportunity, relative prices are the driving force in making cropping decisions, leading to an appropriate mix of crops based on relative global demand.
Some opponents of the board's Single Desk power suggested it should be replaced by a 'dual market' system. This was 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 was not a viable alternative as a dual market would effectively end the board's Single Desk power and any perceived benefits that it may have given farmers.
Opponents argue that because the perceived benefits farmers received from the CWB increases their land value, elimination of the CWB Single Desk would lower the value of their land. Lower land prices would make Canadian farmers more competitive but could also leave many owing more than the value of their reduced land. Retiring farmers selling their land could be faced with a much reduced retirement fund but new entrants into farming would be able to purchase land at lower cost. (This is all based on the theory that the CWB provided a net benefit to farmers, which was never proved.)
Some CWB opponents have argued that much of the lower quality land is in close proximity to the US border and would be the first to realize the benefits of the US market.
Support for the CWB
In a September 2011 plebiscite (referendum) conducted by Meyers Norris Penny, 62% of CWB farmers voted that they wanted to keep the wheat board and its Single Desk power. Proponents of maintaining the CWB stated that the collective bargaining power of the wheat board gives farmers a better price than they would have if they were individually marketing to large multi-national corporations. CWB opponents disagreed, arguing that there was no evidence of better returns for farmers. At this time, farmers already had the ability to market all the crops save wheat and malt barley independently, meaning it is possible to succeed marketing grain without board oversight. This, however, may make farmers more susceptible to fluctuations in the commodity market and to focus more of their time on the business aspect of farming, rather than farming. The Wheat Board attempted to offer producers more options in its latter years—for example, farmers could sell their wheat with binding forward contracts to the Wheat Board that attempted to pay the same price that they would get for their grain in the U.S.
Supporters of the board and labour unions believed the CWB gave individual farmers increased marketing power in a world market which got them a higher price than they would have otherwise gotten, not only through the efficiencies of scale, but as well by exercising oligopolistic marketing power on the selling side, especially for Durum wheat, although the evidence of this is weak or non-existent. 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 Single Desk, although the study and its methodology was widely refuted. Supporters of the Single Desk feared that an end to the board would put farmers in a situation like in the early part of the 20th century where farmers effectively competed with each other to sell their grain, effectively putting them at the mercy of big agribusiness and the railroad monopolies, believing that would reduce farm incomes. The counter-argument is that producers of non-Board crops such as canola do not seem to have this problem.
American complaints
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 complained. 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. The attacks on the Wheat Board were, at the time, one of the major irritants in bilateral relations between Canada and the United States.
Western alienation
The fact that the Wheat Board primarily marketed crops produced in Western Canada became a source of alienation and even Alberta separatism for many Western Canadian farmers. Farmers in Eastern Canada (east of Manitoba) and most of British Columbia (non-Peace River) were exempt from the CWB's Single Desk control of non-feed wheat and barley—Ontario has its own marketing board, but it is not compulsory.
Calls for abolition of the CWB
There had been calls by many groups to abolish the Wheat Board. Many of these groups took their fight to the Internet to spread their message and gain support for their cause. While many were focused on the Canadian Wheat Board, others concentrated on international wheat boards, the other primary target being the Australian Wheat Board, before the AWB itself converted to a private firm, leaving the CWB as the only significant agricultural State Trading Enterprise (STE) exporter worldwide, if one ignores Chinese State-Owned Enterprises (SOE). On 7 December 2008, CWB permit book holders voted in favour of maintaining the wheat board by electing four pro-board candidates with one marketing choice candidate being elected. Stewart Wells, president of the National Farmers Union, said "The message can't be any clearer". Others argued that the voter's list was flawed, as it included many small or part-time producers who may not deliver to the Board, as well as non-producers such as landowners whose livelihood might not solely rely on farming. In December 2008, the draft modalities text of the Doha Development Round was revised such that upon signing in its revised form, the CWB would lose statutory privileges such as the Single Desk within five years of the signing.
Transfer of CWB to Foreign Hands (2012–2015)
One of the aims of the Conservative government since coming to power in January 2006 was to end the Single Desk marketing power on Western Canadian wheat and barley. The Conservatives had been unable to get this change approved by Parliament because they held a minority of seats until the May 2011 federal election and all opposition parties supported the Single Desk. The Conservatives also lost a court battle to unilaterally dismantle the CWB without an act of Parliament. In the aftermath, Harper and then Minister of Agriculture Chuck Strahl stated their intent to continue with the removal of the traditional role of the CWB, particularly in regards to barley (which is generally a more corporate crop), perhaps through Parliamentary action.
After winning a majority in the May 2011 general election, the Conservative government announced its intention to remove the CWB Single Desk through legislation. In response, the CWB held plebiscites on whether to keep the Single Desk power on wheat and barley. The results were released on September 12, 2011; 51 percent of barley growers and 62 percent of wheat growers voted to maintain the board's Single Desk. Notwithstanding, the government removed the Single Desk on August 1, 2012 ignoring the plebiscites' results. In defending this policy, Agriculture Minister Gerry Ritz claimed the CWB plebiscites were seriously flawed and that the Conservatives' election victory gave them a mandate to remove the Single Desk.
According to the CWB, the government advanced the timetables to Christmas 2011, prompting them to launch a protest campaign urging Canadians as well as farmers to speak out against the government's decision to end the Single Desk. Meanwhile, the government issued leaflets explaining what would "bring marketing freedom."
The Marketing Freedom for Grain Farmers Act instituted a timeline for the eventual privatization of CWB, requiring the board to formulate a plan by 2016, to be implemented in 2017. On April 15, 2015, it was announced that a 50.1% majority stake in CWB would be acquired by Global Grain Group, a joint venture between Bunge Canada—a subsidiary of Bunge Limited, and SALIC Canada—a subsidiary of the Saudi Agricultural and Livestock Investment Company, for $250 million. The remaining equity of CWB will be held by its member farmers.
The sale to G3 took place while a "Farmers of North America" led group of Western Canadian farmers attempted to raise funds to purchase the CWB and keep it Canadian farmer owned rather than selling it to foreign corporations. The group was rebuffed despite having a higher offer, ($349 million?) on grounds that they had not raised the funds. (the time frame was artificially short for the kind of offer FNA was attempting).
On 12 June 2015, the Department of Finance released draft legislation to handle the tax consequence to farmers, and to the Trust which will hold 49.9% of CWB in trust for farmers (proposed section 135.2 of the Income Tax Act). No news release was issued to explain the legislation. An explanation of how the legislation works is included in the 48th edition of Carswell's Practitioner's Income Tax Act and Carswell's Taxnet Pro.
See also
- William Craig McNamara – President of the Canadian Wheat Board until 1970.
- Minister of Fisheries and Oceans (Canada), ministry responsible for Freshwater Fish Marketing Corporation (FFMC), a monopsony for commercial freshwater fishermen in northwestern Ontario, Manitoba, Saskatchewan, Alberta and the Northwest Territories
- Wheat pools in Canada
- Federation of Quebec Maple Syrup Producers
References
- ^ "Canadian Wheat Board". Dictionary of Canadian Biography. Retrieved 2024-07-30.
- ^ "U.S., Saudi firms to buy former Canadian Wheat Board". The Globe and Mail. 15 April 2015. Retrieved 15 April 2015.
- ^ Jake MacDonald (27 November 2014). "Why so many farmers miss the Wheat Board". The Globe and Mail. Retrieved 3 August 2015.Jake MacDonald's special report for the Globe and Mail covers a number of aspects of the CWB in depth.
- MacEwan, Harvest, 103.
- "cwb.ca: History of CWB". Archived from the original on February 18, 2011.
- agric.gov.ab.ca: "Single Desk Selling: Some Relevant CWB and Operational Issues" (copy by archive.org)
- GM Wheat rejected by 233 Consumer, Farmer Groups in 26 Countries, Canadian Biotechnology Action Network - Wheat, Ottawa, Ontario: Canadian Biotechnology Action Network(CBAN), archived from the original on 2015-05-24, retrieved 5 August 2015
- "parl.gc.ca - Library of Parliament Legislative Summary PUBLICATION NO. 41-1-C18-E" (PDF). Archived from the original (PDF) on 2015-06-10. Retrieved 2015-04-29.
- Canadian Wheat Board Act, subsection 3.02(1)
- Canadian Wheat Board Act section 3.09
- Government of Canada. "Board of Directors". Marketing Freedom for Grain Farmers Act. Government. Retrieved 30 January 2013.
- Canadian Wheat Board Act, section 45, archived from the original on 2012-05-27, retrieved 2011-06-24
- Canadian Wheat Board Act, section 66, archived from the original on 2012-05-27, retrieved 2011-06-24
- Canadian Wheat Board Act, section 20 and 21, archived from the original on 2012-05-27, retrieved 2011-06-24
- Canadian Wheat Board Act Archived 2012-05-27 at the Wayback Machine, Canadian Wheat Board Act, section 68
- ^ Murray Fulton; James Vercammen (February 1996). Dual Marketing and the Decisions Facing Western Canadian Farmers for Wheat and Barley Marketing: A Brief to the Western Grain Marketing Panel (PDF) (Report). Saskatoon, Saskatchewan. Retrieved 3 August 2015.
- ^ "Strahl fires wheat board president". CBC News. 19 December 2006. Archived from the original on October 19, 2015. Retrieved 25 January 2015.
- Helen Forsey; Simon Enoch (May 2011), Harper's Renewed Attack on the Canadian Wheat Board (PDF), retrieved 3 August 2015
- "marketing agency". Retrieved 2007-08-27.
- "Strahl fires president of Canadian Wheat Board". CTV News. 2007-12-19. Archived from the original on 2008-03-30. Retrieved 2007-08-27.
- Eshpeter, Ken. "FARMERS OPPOSE TORIES' WHEAT BOARD POLICY AND STRONG-ARM TACTICS". Vue Weekly. Archived from the original on 2007-09-28. Retrieved 2007-08-27.
- "Farmers vote to end wheat board's barley monopoly". CBC. 2007-03-28. Retrieved 2011-12-30.
- ^ "CWB versus Attorney General Canada re: barley regulations". Canadian Wheat Board. 2007-07-31. Archived from the original on 2007-08-12. Retrieved 2007-08-27.
- Conservatives use Taxpayers Money to Kill Wheat Board. NFU press release, Nov 26, 2008.
- "Top Court ruling a defeat for Canadian Wheat Board". Vancouver Sun. 2010-01-22. Archived from the original on 2010-01-25. Retrieved 2010-01-22.
- "Ottawa broke law on Wheat Board, court rules". Toronto: The Globe and Mail. 2011-12-07. Retrieved 2011-12-09.
- "An Act to reorganize the Canadian Wheat Board and to make consequential and related amendments to certain Acts". LegisInfo. 2011-12-07. Retrieved 2011-12-09.
- "Judge backs Ottawa's bid to break up wheat-board monopoly". The Globe and Mail. Toronto. 2012-06-18.
- ^ Fulton, Murray E. (2006). The Canadian Wheat Board in an Open Market: The Impact of Removing the Single-Desk Selling Powers (Report). Saskatoon, Saskatchewan. doi:10.22004/AG.ECON.31787.
- ^ Proceedings of the Standing Senate Committee on Agriculture and Forestry, Brandon, Manitoba, March 24, 1998, retrieved 3 August 2015
{{citation}}
: CS1 maint: location missing publisher (link) - ^ "Farmers vote to keep Canadian Wheat Board". CWB. 2011-09-12. Archived from the original on 2012-01-19. Retrieved 2011-09-12.
- Updates & News on farmers' court actions to restore our Canadian Wheat Board, Friends of the Canadian Wheat Board, 13 July 2015, retrieved 3 August 2015
- "UPSHALL DELIVERS STRONG PRO-CANADIAN WHEAT BOARD MESSAGE - Government of Saskatchewan". Gov.sk.ca. 1996-02-16. Archived from the original on 2011-06-10. Retrieved 2011-02-14.
- Canada, Senate of. "Committees (44th Parliament, 1st Session)". SenCanada.
- "Real Results: Leveling the Playing Field for American Workers and Farmers". United States Trade Representative. 2004-07-08. Archived from the original on 2007-03-08. Retrieved 2007-08-27.
- "USDA Budget Summary 2006 - Farm and Foreign Agricultural Services". United States Department of Agriculture. Archived from the original on 2007-03-20. Retrieved 2007-08-27.
- "New EU budget: a historic missed opportunity". Open Europe. 2005-12-20. Archived from the original on 2007-08-08. Retrieved 2007-08-27.
- CWB Election Results Show Support for CWB Monopoly - Johnstone, Regina Leader Post, 8 Dec 2008
- "CWB Report on Elections Process" (PDF). CWB Website. Archived from the original (PDF) on 2010-12-14. Retrieved 2009-06-04.
- "6 December 2008 revised WTO Doha draft modalities text (see Annex K)|WTO Website" (PDF). Retrieved 2009-06-04.
- "Why workers everywhere should support the Canadian Wheat Board". National Union of Public and General Employees. 2006-05-11. Archived from the original on 2007-09-19. Retrieved 2007-08-27.
- "Harper 'disappointed' by court decision on barley". CBC News. 2007-08-02. Retrieved 2007-08-27.
- Stand Up For Canada, 2006, Conservative Party of Canada Federal Election Platform, page 18
- "Stand Up For Canada" (PDF). www.conservative.ca. Archived from the original (PDF) on March 3, 2007.
- "Grain monopoly end should be slow, orderly-Cargill Canada CEO". Reuters. 2011-05-11. Archived from the original on 2015-10-19. Retrieved 2017-06-30.
- "Wheat Board monopoly to end in 2012: minister". CBC. 2011-05-18.
- "Wheat board launches campaign against plan to end monopoly". The Calgary Herald. 2011-11-08.
- "Canadian Wheat Board prepares for corporate takeover". CBC News. Retrieved 15 April 2015.
- "Notice of Ways and Means Motion to Amend the Income Tax Act". Archived from the original on 2015-06-22. Retrieved 2015-06-21.
- "Homepage".
- "Taxnet Pro Signon". signon.thomsonreuters.com.
- "Free the fishermen | Full Comment | National Post". Archived from the original on 2012-07-14. Retrieved 2012-05-09.
External links
- Official website
- Description of the Canadian Wheat Board's archives at the University of Manitoba Archives & Special Collections
- Maple Leaf Web: Examining the Canadian Wheat Board
- Stop The Steamroller - The CWB's site protesting the Conservative Government's decision to end the Canadian wheat monopoly
Corporations based in Winnipeg | |
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Wheat | ||
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Types | ||
Agronomy | ||
Trade | ||
Plant parts and their uses | ||
Basic preparation | ||
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Associated human diseases | ||
Related concepts | ||
Category |
Barley | ||
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History | ||
Types of barley |
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Agronomy | ||
Trade | ||
Parts of the plant | ||
Basic preparations | ||
As an ingredient | ||
Associated human diseases | ||
Related concepts | ||
- 1935 establishments in Canada
- 2015 disestablishments in Canada
- Federal departments and agencies of Canada
- Agriculture in Canada
- Companies based in Winnipeg
- Government agencies established in 1935
- Government agencies disestablished in 2015
- Wheat production in Canada
- Monopsonies
- Agriculture companies of Canada
- Marketing boards
- Barley
- Wheat organizations
- Agrarian politics