Myth 1: The CWB can add value in an open market
There is no open market, only a private market dominated by five giant companies. Since the CWB has no port facilities or capital base, it would be forced to go cap in hand to these companies asking for their help to deliver on CWB sales. Why would they help a competitor? How could the CWB hope to get a premium price when they have no assured supply of grain, no real knowledge of what grades are available and no idea of the volume of grain they have to sell? Without the single desk, there is little value that the CWB could add to farmers’ grain.
Myth 2: Producer cars will survive
Farmers have a right to order a producer car, but to ship it they need to have a sale for the grain and space in a port terminal to store it. Why would those terminal owners undercut their own handlings to accommodate producer cars? The answer is they won’t! (and, they don’t right now!) That is why more than 95 per cent of producer cars carry Wheat Board grain. The CWB has the commercial muscle to access space in port terminals.
Myth 3: We’ll get better returns in an open market
Under the Canadian Wheat Board Act, our Board is not allowed to have any “retained earnings.” In plain English, this means our Board must return all its sales revenue, minus operating costs, back to farmers. According to both the Auditor General of Canada and the annual Deloitte and Touche audited statements, that is just what happens: more than 98% of sales revenue goes back to farmers.
With all their bankers, shareholders and expensive executive bonuses, no private corporation can possibly match the CWB’s return to farmers.
And what about premium prices? Fourteen International Trade Tribunal Investigations and numerous peer reviewed academic studies have all concluded that the Wheat Board does get premium prices for farmers. Even U.S. farm leaders, like Robert Carlson of the North Dakota Farmers Union are convinced that the CWB earns Canadian farmers big premiums compared to U.S. Prices. Too bad our own Agriculture Minister is not paying attention.
Myth 4: An open market will lead to transparent pricing
When you settle on a price to sell your canola, do you know where it goes or what it is used for? Nope! That is all a (sales) secret which the brokers keep to themselves. Some canola goes for oil, some for meal and, some for highly specialized industrial applications. It all sells for different prices, but the farmer only sees one price. That’s what happens with do-it-yourself marketing.
The difference between a marketer and a price taker is huge. A marketer, like the CWB, develops relationships with customers. The private trade only makes an offer to sell to end use customers. Then, private traders go to farmers and offer them a lower price to source the commodity they have already sold. This is called margin trading. As a price taker, the farmer always loses and often the customer is not entirely satisfied either. That is why western farmers chose to cut out the middle man by establishing their own sales department, the CWB, to market their own grain. It works so well the private trade has been howling for its blood ever since.
Myth 5: The CWB put wheat farmers in jail
The facts are straight forward. No farmer was ever charged under the Canadian Wheat Board Act which had its own penalty section. The Manitoba “poster-child” for the border-runners was found guilty of breaking section 94.1(f) of the Immigration Act, sections 11, 31, and 153(c) of the Customs Act, and section 145.3 of the Criminal Code all arising out of smuggling grain into the U.S. from Canada.
(R. v. McMechan, March 16, 1998)
In Lethbridge a dozen people were also convicted of violating several sections of the Customs Act for refusing to do what every other exporter of products from Canada does: present an export licence to Canada Customs. These convictions included: failure to report exporting goods, evading the payment of duties, and illegally removing lawfully seized property.
(R. v. Duffy, May 17, 2001 AB Court of Appeal 124)
Rather than pay small fines many of them chose to spend a few hours in jail while loudly proclaiming the Wheat Board had put them there. In fact they had put themselves there by willfully and deliberately violating many Canadian laws, then being convicted in a court of law and being sentenced by a judge. Since the Canadian judicial system is independent, the Wheat Board had no control over the process.
Export Licences are required under the Customs Act and are administered by various agencies which issue licences under the authority of the Customs Act. An Alberta oil producer would get such a licence as would a car manufacturer. For grain, the Wheat Board normally issued export licences to farmers who used the CWB’s no-cost “Producer Direct Sales Program” to export their own grain. Read more here
Myth 5: The CWB depended on the War Measures Act
The most often used piece of historical revisionism is the claim that our Canadian Wheat Board was imposed on farmers under the War Measures Act to provide cheap grain to Britain. This claim is simply wrong and it is not supported by any peer-reviewed academic histories about that time. Nor is it supported by common sense.
A very brief history lesson about our Wheat Board is obviously needed and any good history lesson starts with how things were.
The Conservatives removed the first single desk CWB in August 1920. The decline in revenue from overseas markets created a flood of Canadian grain into the United States. To protect their own farmers the US closed its border to Canadian grain and cattle in May of 1921.
By 1923 Canadian farmers used their Wheat Pools to set up a Central Selling Agency (CSA). They also defeated every Conservative MP in the west in 1921 and lobbied for the return of the single desk Wheat Board. Their CSA was bankrupted by the 1929 financial crash.
By 1935 times were so desperate Conservative Prime Minister R. B. Bennett, from Calgary, finally listened to farmers and passed the Canadian Wheat Board Act. Farmers had lobbied for a single-desk but Prime Minister Bennett gave in to the private grain trade and did not proclaim the single-desk even though it was part of the act. Ottawa also underwrote the costs of the voluntary CWB’s operations. Read more here