Wheat board head vows to fight federal changes

The Canadian Wheat Board says it will fight the Conservative government's plan to strip the board of its monopoly.
Prairie farmers in the summer voted in favour of maintaining the Canadian Wheat Board's monopoly over wheat and barley sales, but the Conservative government plans to table legislation on Tuesday to end that monopoly. (Adrian Wyld/Canadian Press)

The Canadian Wheat Board says it will fight the Conservative government's plan to strip the board of its monopoly.

Allen Oberg, chair of the wheat board's farmer-elected board of directors, says in a time of economic instability, the federal government is jeopardizing $5 billion in exports and forcing grain farmers into an open market without the board's protection.

"For no other reason beyond an ideological crusade, this government will hand the Americans what they want on a silver platter and get nothing in return," Oberg told reporters in Winnipeg on Monday.

Agriculture Minister Gerry Ritz said the government will table legislation on Tuesday aimed at reorganizing the wheat board, ending its decades-old monopoly over Western Canada's wheat and barley farmers.

"The Canadian Wheat Board monopoly, born in a different time to meet different needs, has cast a chill on key parts of the grain sector in Western Canada in today's realities," Ritz said Monday morning from a farm near Acme, Alta.

The Conservatives have promised farmers that they would be free to choose how to market their own crops by August 2012.

Wheat board chairman Allen Oberg said Monday that his organization will fight the federal government's move in court and in the court of public opinion. (CBC)

Ritz said the government wants to ensure the bill clears Parliament before the end of the year, saying both farmers and commodities markets need clarity to plan for the future.

But Oberg accused the federal government of launching a reckless corporatization of Canada's grain industry.

"We will see a fundamental shift of marketing power and wealth away from Prairie farmers and into the hands of huge foreign-based corporations," he said.

Oberg said the wheat board will fight the proposed changes in court and in the court of public opinion.

The board has also listed six things it says are needed to survive if it loses its monopoly.

Oberg said the federal the legislation will destroy the board without the six measures it has outlined.

Deeply divisive issue

The wheat board's "single-desk system" was set up as a voluntary board in the 1920s, in an effort to protect farmers against volatile grain prices.

The federal government made the system mandatory for grain farmers in Alberta, Saskatchewan and Manitoba in 1943.

Known as a single-desk because it's the one option for selling grain, the idea was to use the monopoly to get farmers a better price.

The wheat board, based in Winnipeg with staff in Tokyo and Beijing, also takes care of marketing and shipping, with 80 per cent of the wheat going overseas.

Some farmers say they could get better prices on their own, while those who support the wheat board's single-desk system argue that it brings them stability in the marketing of a product that has good years and bad years.

"You've got people that are very adamant on either side," Ken Froese, who farms near Hanley, Sask., told CBC News.

"It's like some other icons, where either you love it or you hate it. There's not a lot of middle ground."

Froese said he operates a mixed grain and cattle farm because the Canadian Wheat Board's monopoly has driven him and other producers away from growing wheat.

But Andy Baker, who farms near Beausejour, Man., said he isn't so sure what the government's promise of greater marketing freedom will mean for himself and his sons.

"That's code, I guess, for 'let's let big business get an even bigger slice of the pie,' and that's going to come directly out of my pocket," Baker said. "I mean, this comes down to who's going to control the industry."

Farmers who have tried to get around the wheat board have been arrested, fined, and even jailed for not paying the fines, increasing tensions around the issue.

Job losses ahead, CWB warns

Ottawa already faces a legal challenge from a lobby group, the Friends of the Canadian Wheat Board, which argues the Conservatives once promised to respect farmers' democratic right to decide the wheat board's future.

"Whether farmers sell their own wheat or sell it through the wheat board or sell it through a dual market as farmers prefer, is ultimately a decision for farmers," Prime Minister Stephen Harper said in 2007.

As many as 400 jobs could be lost at the Canadian Wheat Board's head office in Winnipeg, should the single-desk marketing system be scrapped, according to board officials.

The Canadian Wheat Board held its own plebiscite on the issue this past summer — after Ritz refused to hold one — and 61 per cent of wheat farmers and 51 per cent of barley farmers voted in support of keeping the monopoly.

But Ritz brushed off the board's plebiscite as a "non-binding survey" and promised to push ahead with scrapping the single desk.

On Monday, Ritz denied that the government's proposed change means the end of the Canadian Wheat Board itself, as he said its future will be up to farmers.

But Oberg warned that if the wheat board loses its monopoly, it could cost Winnipeg about 2,200 jobs, including 430 jobs at the board's headquarters in the city's downtown.

The remaining jobs would be lost should Winnipeg no longer be a centre for Canada's grain industry, Oberg said, adding that Manitoba's economy would also lose $100 million in spinoff benefits annually.

"They should have concerns about jobs in Winnipeg and the whole economy in the province of Manitoba," he told CBC News. "If I was [Manitoba Premier Greg] Selinger, that's what I'd be most concerned about."

The wheat board has come up with a plan to reinvent itself as a private company. But even then, it would need only a fraction — perhaps a tenth — of the employees it has now, according to a board spokesperson.

Should the board need only a tenth of its workforce, that would be a loss of almost 400 jobs.

"It's not the best time for this to happen…. It's hard to see how those 400 jobs will be replaced," said Michael Benarroch, who teaches business and economics at the University of Winnipeg.

An economic impact study done by PricewaterhouseCoopers for the Canadian Wheat Board in 2005 said the board is a "major economic force" in Winnipeg and across Canada.