(November 2, 2012)  We all know what would happen about ten minutes after all the police are fired.  That scrawny kid with the t-shirt emblazoned with “freedom” would be among the first to get his wallet stolen.  Yet a few farmers with the ear of the Prime Minister have succeeded in convincing him we need to fire all the police on the grain beat.  So Finance Minister Flaherty has proposed changes to the Canadian Grain Commission (CGC) that will open the door to the same massive fraud and swindles that prompted its formation in the first place.

The National Farmers Union pointed out “The end of CGC inward inspection of grain means that an important audit and quality control system for farmers is lost.  Currently, when grain travels from country elevators to terminal elevators at port it is inspected to make sure the quality shipped and weighed by grain companies matches what they have purchased from farmers.”

The importance of this auditing can be seen with a few examples.  Blanchard’s  A History of the Canadian Grain Commission details the following swindle uncovered by impartial Grain Commission inspectors:  “In 1909 in an audit of grain terminals at the Lakehead it was discovered that stocks and shipments of No. 1 Northern, in the case of two terminals, exceeded receipts by over 1 million bushels.  There were corresponding shortages in the lower grades. . . .  The companies in question were prosecuted and fines levied.”  (17)

In the mid 1990s we had another good example of the value of the CGC to farmers in malt barley.  CGC audits found the grain companies were buying large amounts of supposedly lower quality barley from farmers then reselling it as high quality malt barley and pocketing the money that ought to have gone to the farmers.

This price difference does not amount to just small change either.  Independent, peer reviewed academic studies that looked at the effect of the illegal continental barley market the Mulroney government attempted in 1993, showed in just two months it cost western farmers almost $12 million largely because the premium for malt barley over feed barley disappeared.  With the death of the Wheat Board this August 1st the malt barley premium all but disappeared and the premiums for high protein wheat now seem to be a thing of the past as well.

So we can expect to hear a well funded chorus of grain companies and their followers loudly supporting the proposals to gut the Canadian Grain Commission and take us back to the 1900s when there were no police on the beat.  A lot of farmers supporting deregulation obviously do not understand the system, and like the scrawny kid with the “freedom” t-shirt will find their wallets lighter as their grain cheques mysteriously shrink.  The how and why of their shrinking grain cheques will remain a mystery because without the CGC to audit the system, the new swindles will all be conducted behind closed doors.

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