Sandhusker
Well-known member
OTTAWA - The business of grain marketing has not been its usual sleepy self lately in western Canada.
Adrian Measner was fired as president of the Canadian Wheat Board in December. The Canadian government wants to strip the board of its monopoly over most of the country's wheat and barley exports.
Plans by the government to strip the Canadian Wheat Board of its monopoly over most of the country's wheat and barley exports have provoked a fight that is pitting farmer against farmer and the agency against the government.
The wheat board, founded 75 years ago as part of a wave of cooperative ventures for improving farmers' lives, is now one of the world's largest grain traders, with annual sales of $4 billion to $6 billion.
The board is, in many respects, among the last of the cooperative projects that remains true to its original goals. But those goals now have little in common with the open market philosophy of the minority Conservative government that came to power just less than a year ago.
Shortly before Christmas, that clash resulted in an unusual Cabinet order to fire the wheat board's president, Adrian Measner.
The fate of the board will be eagerly awaited in the United States, where farm groups have unsuccessfully challenged the Canadian board's monopoly. Among the companies likely to move into Canada's export market, if it is opened, are commercial grain traders such as Cargill of Minneapolis and Archer Daniels Midland of Decatur, Ill.
"There is absolutely no doubt that part of the reason the Conservative government is pushing as hard as it is pushing is, I suspect, that they are feeling pressure from the Americans," said Murray Fulton, an agriculture economist who directs a center for the study of cooperatives at the University of Saskatchewan in Saskatoon.
The wheat board concept is simple. In exchange for its monopoly over wheat destined for export from Canada's three prairie provinces, as well as a small part of British Columbia, it pays every farmer the same average sale price. Overall, Fulton said, price averaging has provided most farmers with greater stability and higher prices than they would have obtained in an open market.
A study commissioned by the wheat board on barley prices released in December gives more specifics.
The report, by Richard S. Gray of the University of Saskatchewan, Andrew Schmitz of the University of Florida and Troy G. Schmitz at Arizona State University, concluded that farmers' barley revenue from the wheat board was 59 million Canadian dollars higher from 1995 to 2004 than it would have been in an open market system.
Wheat board supporters argue that the board also helps farmers by negotiating terms with railways and ports.
The system seems to have supporters on the buyers' side as well. It provides a more uniform grading of grains than is available in the United States, for instance.
But averaging prices has a significant drawback for some farmers. By definition, an average price is often lower than what individual farmers who live near the U.S. border could obtain by directly trucking their harvest south. The province of Alberta, home to Prime Minister Stephen Harper, has long opposed the board for that reason, among others.
Chuck Strahl, the minister of agriculture, has repeatedly said that all he wants is to give farmers the choice of pooling their risk through the wheat board or going out on their own.
"We are trying to get more marketing choice for farmers," he told the House of Commons in December. "We want to put more money in their pockets. We want them to take advantage of their own expertise."
Fulton argued in a separate report published last month that the wheat board cannot survive in an open market. Indeed, its history before it was granted a monopoly supports that idea. The operation foundered as farmers chose the open market when prices were high, returning to the board only during hard times.
Strahl has not found it easy to end the board's monopoly. A 1998 law gave farmers control of the board by letting them directly elect 10 of its 15 directors, with the balance, including the president, being appointed by the government.
Now Strahl plans a vote on creating an open barley market early in 2007. But he has also made it clear that the government will not be bound by its results.
The level of support for the government's open market plan is unclear. Even Strahl said during recent committee testimony: "I think I've had 4,500 letters on wheat board issues since I've been in office. They are almost equally divided."
Measner, a 34-year veteran of the wheat board, had become something of a minor celebrity by rebuffing orders from Strahl and his staff to stop promoting the monopoly system and start backing the government's plan.
Before his dismissal on Dec. 22, Measner began a court challenge of a Cabinet order requiring the board to support the government, arguing that it is unconstitutional and outside the government's power over the board.
"The government has a direction they're taking the wheat board, and it doesn't matter what people say or what people want," Measner said after his firing. "My position is that it should be farmers making the decision."
Adrian Measner was fired as president of the Canadian Wheat Board in December. The Canadian government wants to strip the board of its monopoly over most of the country's wheat and barley exports.
Plans by the government to strip the Canadian Wheat Board of its monopoly over most of the country's wheat and barley exports have provoked a fight that is pitting farmer against farmer and the agency against the government.
The wheat board, founded 75 years ago as part of a wave of cooperative ventures for improving farmers' lives, is now one of the world's largest grain traders, with annual sales of $4 billion to $6 billion.
The board is, in many respects, among the last of the cooperative projects that remains true to its original goals. But those goals now have little in common with the open market philosophy of the minority Conservative government that came to power just less than a year ago.
Shortly before Christmas, that clash resulted in an unusual Cabinet order to fire the wheat board's president, Adrian Measner.
The fate of the board will be eagerly awaited in the United States, where farm groups have unsuccessfully challenged the Canadian board's monopoly. Among the companies likely to move into Canada's export market, if it is opened, are commercial grain traders such as Cargill of Minneapolis and Archer Daniels Midland of Decatur, Ill.
"There is absolutely no doubt that part of the reason the Conservative government is pushing as hard as it is pushing is, I suspect, that they are feeling pressure from the Americans," said Murray Fulton, an agriculture economist who directs a center for the study of cooperatives at the University of Saskatchewan in Saskatoon.
The wheat board concept is simple. In exchange for its monopoly over wheat destined for export from Canada's three prairie provinces, as well as a small part of British Columbia, it pays every farmer the same average sale price. Overall, Fulton said, price averaging has provided most farmers with greater stability and higher prices than they would have obtained in an open market.
A study commissioned by the wheat board on barley prices released in December gives more specifics.
The report, by Richard S. Gray of the University of Saskatchewan, Andrew Schmitz of the University of Florida and Troy G. Schmitz at Arizona State University, concluded that farmers' barley revenue from the wheat board was 59 million Canadian dollars higher from 1995 to 2004 than it would have been in an open market system.
Wheat board supporters argue that the board also helps farmers by negotiating terms with railways and ports.
The system seems to have supporters on the buyers' side as well. It provides a more uniform grading of grains than is available in the United States, for instance.
But averaging prices has a significant drawback for some farmers. By definition, an average price is often lower than what individual farmers who live near the U.S. border could obtain by directly trucking their harvest south. The province of Alberta, home to Prime Minister Stephen Harper, has long opposed the board for that reason, among others.
Chuck Strahl, the minister of agriculture, has repeatedly said that all he wants is to give farmers the choice of pooling their risk through the wheat board or going out on their own.
"We are trying to get more marketing choice for farmers," he told the House of Commons in December. "We want to put more money in their pockets. We want them to take advantage of their own expertise."
Fulton argued in a separate report published last month that the wheat board cannot survive in an open market. Indeed, its history before it was granted a monopoly supports that idea. The operation foundered as farmers chose the open market when prices were high, returning to the board only during hard times.
Strahl has not found it easy to end the board's monopoly. A 1998 law gave farmers control of the board by letting them directly elect 10 of its 15 directors, with the balance, including the president, being appointed by the government.
Now Strahl plans a vote on creating an open barley market early in 2007. But he has also made it clear that the government will not be bound by its results.
The level of support for the government's open market plan is unclear. Even Strahl said during recent committee testimony: "I think I've had 4,500 letters on wheat board issues since I've been in office. They are almost equally divided."
Measner, a 34-year veteran of the wheat board, had become something of a minor celebrity by rebuffing orders from Strahl and his staff to stop promoting the monopoly system and start backing the government's plan.
Before his dismissal on Dec. 22, Measner began a court challenge of a Cabinet order requiring the board to support the government, arguing that it is unconstitutional and outside the government's power over the board.
"The government has a direction they're taking the wheat board, and it doesn't matter what people say or what people want," Measner said after his firing. "My position is that it should be farmers making the decision."