When Farm Leaders Meet Agri-Business
by: Prof. Arthur Schafer
Winnipeg Free Press
(Feb. 28, 2003) Main Street, Moose Jaw, is a long way from Wall Street, New York City. And the Manitoba Canola Growers Association doesn’t have a lot in common with Merrill Lynch or Citibank. Nevertheless, the ethical issue which currently preoccupies corporate America – conflict of interest – is now stirring controversy across the Prairie Provinces.
It has come to light that a number of Western farm leaders have financial ties to the chemical giant Monsanto. Because these leaders are accepting money and travel from Monsanto at the same time they serve as board members of leading farm organizations, they have been accused of conflict of interest.
First, some background to this story. Monsanto is attempting to persuade the Canadian Government to license genetically modified wheat. Part of Monsanto’s campaign hinges on persuading Western farmers to support the introduction of GM wheat to prairie agriculture. This is proving to be a tough sell. Many western wheat farmers fear that licensing GM [“Roundup Ready”] wheat would destroy Canada’s most valuable wheat export markets. Europeans, for example, won’t touch the stuff. Since there’s no safe and sure way to segregate GM wheat from conventional wheat, all Canadian wheat runs the risk of being banned from Europe.
Some Manitoba farmer leaders, such as Ernie Sirski and his wife, have accepted Monsanto – funded travel. [Winnipeg Free Press, 14th December]. The Sirskis were treated to an all-expenses paid trip to Spain last year to attend the World Congress on Conservation Agriculture. Mr. Sirski is president of the Manitoba Canola Growers’ Association.
Another Canola Association board member is a member of Monsanto’s grower advisory panel on Roundup Ready Wheat. He is paid $150 per day to advise Monsanto how to win farmer support for the introduction of GM wheat. The Monsanto Roundup Ready wheat panel has four members from each Prairie Province – each receiving similar benefits. Not surprisingly, the beneficiaries see nothing morally troubling about the situation. Mr. Sirski, for example, is quoted as saying: “It would take more than a trip to Spain to prostitute myself for a chemical company.”
In thinking about this issue, farmers could study not only the crisis of confidence now plaguing Wall Street, but also the track record of the Canadian medical community, which is awash in such conflict of interest issues. Big Pharma spends over $20,000 annually per Canadian physician on gifts – including free meals, money to attend company educational sessions, travel, and consulting fees.
I have lectured across Canada on the ethics of doctors’ accepting gifts from drug companies. Interestingly, I have never met a doctor who admitted that he or she had been influenced in any way by drug company generosity. When confronted on the issue, they invariably reply, as did Mr. Sirskis: “I can’t be bought for … (fill in the blank: a fancy dinner, Caribbean holiday, consulting fee, whatever)”.
Are doctors and farmers incorruptible in the objectivity of their judgment, as they insist? Or, could it be that the drug and chemical companies recognize something fundamental about human nature?
This is a rhetorical question. What the drug and chemical companies understand full well is that much of social life is based on reciprocity. The need to return kindness for kindness, benefit for benefit, is a basic motivator in virtually every human society. It behooves us, therefore, to reflect upon the fact that every dollar of the millions of dollars which the drug companies invest in gifts to physicians and hospitals, and every dollar which the chemical and food companies invest in gifts to universities, farm organizations and individual farmers is viewed by the companies as part of their corporate strategy.
They are buying “good will”, and influencing people who have important decision-making power. It’s a tax-deductible business expense. That is, every gift to farmers and their organizations from agri-business comes with strings attached. Strings that are sometimes as heavy as an iron chain, even when the recipients don’t recognize that their chain is being jerked.
Farm organization directors have an obligation to put the interests of their members first. They have a “fiduciary duty” to exercise their judgement impartially and objectively in the best interest of the members. Money, however, has a tendency to influence people’s judgment. So, when board members accept benefits from a company whose products they must officially evaluate, no one can be certain that their judgement is not being compromised. They may bend over backwards not to be unduly influenced. Sometimes they will succeed. Nevertheless, because human motivation is often complex and difficult to ascertain, there is always a risk that this conflict of interest situation will result in a violation of their moral duty.
In sum, farm leaders who accept benefits from Agri-Business have acquired a “vested interest” which has the potential to conflict with their duty to put the interest of their membership first. Consciously or unconsciously, their judgment may be skewed.
What’s true of Wall Street, urban USA, is equally true of Main Street, rural Canada. When the integrity of an organization is not properly protected, the cost can be ruinous.
Professor Schafer is Director of the Centre for Professional and Applied Ethics at the University of Manitoba
Back 100 years
Letter to the Editor
In several media releases Minister of Agriculture, Gerry Ritz, is espousing the virtues of “marketing freedom.” It appears he is still in the honeymoon stage of “marketing freedom”.
Mr. Ritz should go undercover like “the boss” on the TV show and take a load of wheat to the elevator and see how the grain companies operate. Some of the grain company’s favourite quotes are as follows:
- Sorry no room for the #2 wheat you have on your truck but we do have lots of room for #3!
- Sorry no room for CWB wheat we are taking our own wheat contracts first.
- Why sell to the CWB when you can get paid all your money upfront?
- Sorry dry wheat is now 14% so we have to discount it.
- You didn’t buy any of your inputs from us – we have to serve other customers first.
- Sorry no extra money for wheat with protein values over 13.5%.
- How many tonnes of this grain do you have for sale?
- Sorry only semi loads, no smaller grain trucks!
- What’s the Canada Grain Commission?
- If you have concerns about the wording of our contract you don’t have to deal with us. The next elevator is only 80 miles down the road.
Gerry and his Conservative government have taken my choice (single desk CWB) and my freedom away from me and given all the powers, rules and regulations to the multinational grain companies. They are taking money from producers’ pockets to reward shareholders under this “new marketing freedom”.
The Conservatives have turned us back over 100 years to an archaic “open market” which is a financial abuse to all producers under the so called new name “marketing freedom”.
Eric Sagan
Melville, Saskatchewan
One year later
by: Bill Gehl (Chair)
For CWB Alliance Council
On November 28, 2011 Harper’s Conservatives rammed Bill C-18 through the House of Commons. December 15th one year ago, over the Governor General’s signature the Bill received Royal Assent. This was the first Bill that the Conservatives pushed through the House of Commons, and it set the pattern for what was to come. We now see bills passing through Parliament without adequate study in Committee and with disregard of appropriate debate in the House of Commons, standing committees and in the Senate.
This occurred in spite of concerted opposition and in spite of farmers by a majority stating that they wanted the single desk to remain. So in the year that Bill C-18 has been in place we need to assess the impact. We have witnessed the gutting of the Canadian Wheat Board, but this was only the start of the Conservative government’s concerted and aggressive efforts to rewrite Canadian Grains policy.
A partial review of the Harper government’s actions to the date of this news letter, December 15th 2012, is a list of legislative actions that take away farmer protection and power. These include the following:
- – Removal of inward inspections and weighing at the ports. Just how this will affect producers and especially producer car loaders remains a critical question. Will this place at risk Canada’s superlative international wheat and barley export reputation?
- – Removal of the requirement of grain dealers and elevator operators to post a bond. This is to be replaced with an insurance program against non-payment. This certainly is a transfer of costs to the grain producer.
- – Closure of the PFRA tree nursery
- – Closure of the Winnipeg Cereal Research Centre – the federal government will no longer be in the plant breeding business. The Harper government has said that private industry will take over the plant breeding. This means no public seed stock.
- – Closure of the Quebec facility where research on fusarium was taking place.
- – What is next – when we hear of the loss of inward inspections – does the Canadian Grain Commission have plans to reduce or eliminate other services provided to farmers such as providing sample grading for farmers?
The Canadian Wheat Board Alliance has both monitored and responded to these actions. There have been numerous news releases and commentaries on radio and television from the Alliance. Additionally the Alliance has worked in cooperation with organizations and political parties that support the goals of the Alliance such as the Friends of the Canadian Wheat Board, the National Farmers Union, and the opposition Liberal and New Democratic parties.
The Alliance though working with all who support our position – remains an independent, non-partisan voice that fully supports a farmer directed single desk Canadian Wheat Board. It is because of this that the Alliance supports the court cases that we expect to be heard before the Supreme Court of Canada and supports the class action being undertaken on behalf of western Canadian wheat and barley producers.
Rose-coloured glasses coming off
Regarding the Nov. 22 story “Regulations, farmer voice needed” so now we have the comedy to go along with the tragedy.
John De Pape and Paul Earl lament the lack of transparency and regulation in the grain trade. It appears they have finally removed their rose-coloured glasses to see what supporters of the Canadian Wheat Board were saying all along.
De Pape would like the multinational grain giants to report their sales every week. Good luck with that, John. Do you really believe this government would consider legislation to regulate the free market power of their buddies in Big Grain?
De Pape suggests that farmers will do just fine in the new marketplace as long as they hire “good, intelligent” marketing advisers. He also suggests these advisers should be regulated in some way. Some advisers will be getting a bit itchy at that suggestion.
I wonder if the intelligent ones cost more than the ones who are just good? If they are neither good nor intelligent, do they still cost the same? I sure hope my adviser is more intelligent than my neighbours’. If I can’t have any real market power, at least I can maximize my profit at the expense of my friend on the next section over.
Darrell Stokes
Hussar, Alta.
Manitoba Cooperator, December 6, 2012
Conservative Gratitude
Thanks to Prime Minister Stephen Harper and minister of agriculture Garry Ritz, we now have the Conservative Wheat Board, all political appointees, since all our elected farmer directors were fired. The farmers for Just Us seem to think they have marketing freedom. What a farce. We are now all slaves to the vagaries of a fluctuating market.
Other things for which we can be thankful to our government: austerity measures; funding was cut for CIDA (Canadian International Development Agency) and international charitable organizations; no more trees for farmsteads from Indian Head; phasing out of community pastures; no more CBC television for rural residents. But we had $28 million to spend to commemorate the War of 1812. And we have billions of dollars to spend for fighter planes. What do we need them for?
J. W. Zunti,
Luseland, Sask.
Western Producer, November 22, 2012
Grain Safety Not Assured
Re: Grain Safety Assured, The Regina Leader-Post, October 29, 2012
by Kyle Korneychuk
Kamsack Times Nov 15, 2012 edition
Agriculture Minister Gerry Ritz’s recent editorial “Grain Safety Assured” is just more propaganda from Ottawa.
We know from the XL beef mess that removing impartial Federal inspectors does not help food safety so Ritz’s changes to the Grain Act will do nothing to enhance the safety of Canada’s food. For farmers these changes will actually remove accountability and scrutiny in the grain system.
Inward inspection is the weighing and grading of grain when railcars are unloaded at port. This is to confirm what the elevators take in and the grade of what actually gets shipped out. This auditing is important to farmers because with natural mixing and planned blending of grain, impurities are diluted and the price of the grain increases.
When the CWB single desk was in existence, this extra money was shared between producers and grain companies. Now Ritz will see that it all goes to the grain companies. With no one monitoring this slippage, only the grain companies will know how much it is.
Minister Ritz is completely wrong to say inward inspection only establishes the commercial value of grain, and thus can be performed by private-sector firms when requested. This is like asserting that meat companies can perform e coli tests on the meat when requested or hire someone else to do it. We all know how well that worked
He pretends that these changes will save upwards of $20 million but says nothing about the money farmers will lose. Will the Minister legislate this to ensure that this financial bounty is returned to producers? Likely not! What we can envisage is Grain Company handling fees increasing, and that they will keep all of the loot.
Ritz proclaims “the grain sector has been calling for this change,” which is more propaganda. Doesn’t he mean he is accountable to the grain companies and the less than 200 members of the Western Canadian Wheat Growers who are so vocal on this subject?
This is nothing more than another amendment which gives grain companies supremacy and reduces any assurances that the system is fair for farmers.
Overstating case
By Glenn Tait,
The StarPhoenix
September 10, 2012
Re: Stuck in past (SP, Sept. 4). In this response to a letter from Kyle Korneychuk, Agriculture Minister Gerry Ritz – to use parliamentary lingo – was being a “stranger to the truth” when he said that Prime Minister Stephen Harper set a precedent by always standing up for farmers.
Harper didn’t stand up for us when he unilaterally fired the duly elected Canadian Wheat Board directors and destroyed our organization without a vote. He walked all over us, just as he said he would.
To say the CWB does what it used to do is also a reconstruction of the facts. The current “CWB” didn’t do anything previously – it’s a new entity. It may work out of the same office and have some of the same people (for now), but what used to be is gone.
Ritz’s most common piece of misdirection is more of a sin of omission. To claim that farmers “embraced” the end of the single desk implies that all or most of us wanted this. To be wholly truthful, Ritz should say that some farmers, the big grain companies and Conservative ideologues wanted it.
At least 80 per cent of farmers wanted the wheat board to remain in existence, and a minimum of 62 per cent wanted it to remain as a single desk.
I suppose that 18 per cent gap is made up of blind believers and lazy thinkers who refuse to understand how a single desk system works.
We farmers owned the wheat board. We controlled it, profited by it and it was worth more than $15 billion. Harper smashed it. It’s despicable
Bad Precedent
By Kyle Korneychuk,
The StarPhoenix
August 28, 2012
In the viewpoint article CWB, tyranny and economics (SP, Aug. 17), Herb Pinder, a member Viterra’s board of directors, said: “Property rights are at the heart of our enterprise system.”
If that’s really the case, he should be terrified of Stephen Harper and Gerry Ritz’s method of breaking the Canadian Wheat Board.
All rights and liberties are entirely dependent on the rule of law. If everybody, including in this case Parliament does not follow the law, everything including property is up for grabs by the biggest bully.
The law specified certain steps required to break the CWB. Rather than change or repeal the law as they could have done, Harper and Ritz chose to break the law. In doing so they sought to reestablish a concept that’s been dead for almost 800 years – that the Crown is above the law. In exercising what amounts to a royal prerogative to seize assets of our farmerrun wheat board – specifically almost 2000 rail hopper cars, the building in Winnipeg, the lakers and the contingency fund of more than $200 million all paid for or created by farmers – the government obviously wants to take us back to a time when royalty ruled and commoners bowed before it.
Like a 12th century royal, Harper recently boasted about his use of royal prerogative to pardon some criminals who broke laws he apparently did not like. This sets a very bad precedent with long-term implications. He should not get away with it.
Pardons another slap in the face
Harper’s act of clemency hits at CWB
By: Laura Rance – Winnipeg Free Press
Posted: 08/11/2012
As the new marketing era dawned Aug. 1, Canada’s prime minister took his revisionist view of history and his ideological vendetta against the Canadian Wheat Board to a new level.
He retroactively pardoned farmers convicted of running the border with their grain trucks in the early 1990s as a protest, and who defied customs officers by stealing their compounded vehicles back. Some were later convicted of contempt of court.
Stephen Harper turned to the rarely used Royal Prerogative of Mercy to issue these pardons, saying these self-declared freedom fighters were courageous for standing up to an unjust law.
“Let me be clear about this, these people were not criminals; they were our fellow citizens, who protested injustice by submitting themselves peacefully to the consequences of challenging that injustice. Those consequences are what was wrong,” Harper told his audience.
Did all of those charged get pardons? Citing privacy laws, the government won’t tell us. Usually, people who receive a pardon under the federal justice system ask for one. The Parole Board of Canada considers those requests against some clearly spelled-out criteria before recommending clemency.
First of all, there must be evidence of substantial injustice or undue hardship that is out of proportion to the nature and the seriousness of the offence and the resulting consequences.
“In general terms, the notions of injustice and hardship imply that the suffering which is being experienced could not be foreseen at the time the sentence was imposed. In addition, there must be clear evidence that the injustice and/or the hardship exceed the normal consequences of a conviction and sentence.”
The truth is, some farmers didn’t like being required to pool their grain through the CWB. They wanted to sell directly to customers in the United States and they couldn’t persuade either the duly elected government of the day or the courts to embrace their world view. Their protest was designed to provoke the response it got by leaving authorities with no choice but to enforce the laws of the day.
In fact, the protesters were counting on it. Some deliberately chose jail time rather than pay fines.
As well, “the exercise of the Royal Prerogative of Mercy is not intended to circumvent other existing legislation,” the criteria state.
“An act of executive clemency will not be considered where the difficulties experienced by an individual applicant result from the normal consequences of the application of the law.” In other words, any Canadians who decide to run the border can expect to find themselves in court and lose the keys to their vehicles for a spell.
“Furthermore, the Royal Prerogative of Mercy is not a mechanism to review the merits of existing legislation, or those of the justice system in general,” the PBC site states.
“The exercise of the Royal Prerogative of Mercy will not interfere with a court’s decision when to do so would result in the mere substitution of the discretion of the Governor General, or the Governor in Council, for that of the courts. There must exist clear and strong evidence of an error in law, of excessive hardship and/or inequity, beyond that which could have been foreseen at the time of the conviction and sentencing,” the criteria state.
It appears the Harper government wants to be remembered as being “tough on crime,” except when it involves laws with which it disagrees.
The courts found farmers involved in these publicity stunts were guilty as charged and that opinion held up on appeal. “The appellants were properly charged for violating Section 114 of the Customs Act. The trial judge found that customs officers, acting in the scope of their duties, did seize the vehicles, and that the appellants did wilfully evade the customs officers’ attempts to place those vehicles into custody,” Madam Justice C.L. Kenny wrote in upholding their convictions.
In honouring these protesters, Harper ignores the polls that showed the silent majority of farmers in Western Canada actually supported the CWB monopoly. Despite a bit of grumbling now and again, they consistently elected a majority of directors who supported the single desk. This is presumably why this law-and-order government ignored the law that required a producer plebiscite before making changes.
The majority Harper government had the ability to bring about changes to western grain marketing without resorting to tactics that abuse both power and process. Stunts like this expose the ‘straw-man argument’ on which this whole purge was based.
Any relief that comes from knowing Harper is running out of ways to stomp, tromp and rub people’s noses in his government’s decimation of the Canadian Wheat Board is tempered by the question of what he will turn his attention to next.
Laura Rance is editor of the Manitoba Co-operator.
Wheat farmers lose a tool in the winds of change
Wheat farmers lose a tool in the winds of change
André Magnan
The Globe and Mail
Aug. 03 2012
The winds of change are sweeping through the Prairies this summer, the federal government having stripped the Canadian Wheat Board of its marketing monopoly on wheat and barley. Since 1943, the wheat board has had the exclusive authority to sell these grains on behalf of farmers, returning to them all of the proceeds minus the costs of administration. This week, the “single desk” system ceased to exist, ushering in the biggest change in Prairie farming in at least two generations.
It’s worth pausing to take stock of the long and storied history of this institution. Will the change bring a breath of fresh air or the hot, withering gales of a Prairie scorcher?
Prairie farmers first seized on the idea of collective grain marketing in the early 1900s, when they had little economic clout. The grain trade was organized and financed by large private interests such as banks, railways and Winnipeg grain merchants. When it came to selling grain, farmers were at the mercy of local elevator agents and grain merchants. In the fall, when there was a glut of grain on the market, buyers offered low prices in order to take advantage of the farmers’ need to sell. Early farmers’ organizations pressed for “orderly marketing” as an antidote to this problem. By selling their grain collectively through a single agent, they would have both greater marketing discipline – to even out price fluctuations – and more negotiating power.
It wasn’t until immediately after the First World War, however, that the idea was first put into practice. During the war, the government had taken control of many aspects of the grain trade in order to meet its wartime obligations to Britain. In the aftermath of the war, the private grain trade failed and the government stepped in to create the first wheat board. The board collected all Prairie grain deliveries and sold the crop on behalf of farmers. Farmers responded positively to the experiment, but the government considered the wheat board a temporary arrangement and soon dismantled it. Farmers agitated for its reinstatement, igniting a long struggle.
In the 1920s, when it became clear the government would not restore the wheat board, farmers settled for the next best thing, which was to create voluntary, co-operative grain marketing agencies. This worked reasonably well for a few years, but the farmer-owned “pools” collapsed shortly after the onset of the Great Depression.
Again, the government stepped in to save the wheat economy from the collapse of the private trade. From 1935 to 1943, the reincarnated Canadian Wheat Board accepted deliveries on a voluntary basis, providing farmers with a guaranteed minimum price. This proved problematic because farmers tended only to deliver to the board when the open-market price was lower than the guaranteed price, triggering large deficits covered by the federal government. During the Second World War, the mixed system also interfered with the government’s ability to co-ordinate grain sales to its allies. The government finally re-established the single-desk system in 1943. This policy had the support of all political parties and was cheered by Prairie farmers.
Over the next seven decades, the wheat board evolved with changing commercial and political circumstances but retained its core mandate – to maximize returns for Prairie farmers. In 1998, amid political controversy over the single-desk system, the Liberal government handed control of the agency to farmers. Henceforth, all changes to the board’s mandate would be subject to a farmer plebiscite and the approval of a farmer-controlled board of directors. Ignoring these requirements, the Conservative government has unilaterally stripped the board of its single-desk powers.
The Conservatives have argued that their policy of “marketing freedom” provides the best of both worlds. Farmers will be free to sell to any buyer, including a deregulated Canadian Wheat Board. The lesson of the 1930s, however, is that a voluntary wheat board doesn’t work. In the new environment, the CWB will be just another grain company – a very small one at that. And yet, little has changed in the world grain trade, which is more concentrated than ever.
The winners will therefore be grain companies such as Cargill and Viterra (soon to be sold to Swiss giant Glencore), which stand to benefit from the end of the single-desk system by increasing their sales, and food processors, which will pay less for Canadian grain as multiple sellers compete to make the sale. Farmers, meanwhile, will have lost an important tool of economic co-operation.
André Magnan is assistant professor in the department of sociology and social studies at the University of Regina. His research examines the history and politics of collective marketing in prairie agriculture.
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