Seven points about western grain

At times the whole Wheat Board, grain marketing issue can appear dauntingly complex.  So here is a quick summary:

• Since the invention of the telegraph, the international grain market has been controlled by five giant companies.
• Aside from Canada there are really only three countries producing reliable bulk supplies of grain for international sale:  The United States, Argentina, and Australia.  Pre 1917 the Ukraine was also among this group.  Depending on weather and other factors India and China occasionally export wheat and other grains.
• Western Canadian farmers were unique – they developed a collective bargaining agent called the Canadian Wheat Board to deal directly with end-use customers bypassing the international grain companies.
• About 70% of the west’s wheat is exported overseas.  20% is milled and consumed in Canada and 10% is exported to the United States.
• They also developed the largest farmer owned cooperative grain handling system in the world known as the prairie Wheat Pools.
• At the same time western farmers supported the development of plant breeding in the public interest.
• Western Canada’s niche in the international grain market was supplying quality assured grain to the world’s highest paying markets while, with the exception of Australia, the other grain producing areas concentrated on undifferentiated bulk sales.

These innovations are unprecedented in human history and served western farmers well for almost 80 years.  They have been slowly destroyed by governments acting under pressure from the international grain trade.  The end of the farmer controlled single desk CWB has resulted in chaos in grain exports, and huge profits for the private grain trade at the expense of farmers as the following letter from a Manitoba grain producer shows.

Mr. Ritz, please send cheque

Mr. Ritz, I am a small- to medium size farmer. I harvested about 50,000 bushels of wheat last fall.  According to your CWB’s market newsletter, the Vancouver selling price has been about $11 per bushel this winter.

Under the former Canadian Wheat Board, the traditional rule of thumb that farmers used was to subtract $1.50 per bushel from the average port selling price to determine what they would receive for their grain. This covered the board’s marketing cost, the grain company handling fees and the transportation.

Therefore, if you had not destroyed the Canadian Wheat Board, I would have received $9.50 per bushel.  That would have translated into a gross farm income of $475,000. With the wheat board gone, I am now receiving $5.50 per bushel instead of $9.50.  Thanks to you, I have been shortchanged $4 per bushel.

That translates into a reduction of $200,000 from my gross farm income.  My return on wheat is now below the cost of production.

You and Prime Minister Harper are responsible.  Please send a cheque.

Donn Dutchak
Rama, Sask.

The last time this happened was in 1921 when the CWB was ended by Ottawa.  It resulted in more farm foreclosures between 1921 and 1929 than during the whole of the great depression.  Farmers lobbied very hard to restore the CWB and succeed in 1935.  The farmer-controlled single desk CWB was officially* ended by Ottawa in 2012 without a farmer vote.

* Note:  A colleague and friend from Manitoba pointed out that although the CWB single desk officially ended August 1, 2012 that it effectively ended with the passing of Bill C-18 in December of 2011 just months after Ag. Minister Ritz had promised farmers they would have a vote on ending the CWB.

He writes:   “Effectively the CWB ended as soon as the bill was passed since the elevator companies stated to do private contracting for delivery after Aug 1, 2012.”

Many thanks for an important clarification.