Think-tank critical of wheat board performance

A report by the C.D. Howe Institute is shining a harsh light on the Canadian Wheat Board, criticizing the Winnipeg-based agency for not being an effective trader in world markets.

A report by the C.D. Howe Institute is shining a harsh light on the Canadian Wheat Board, criticizing the Winnipeg-based agency for not being an effective trader in world markets.

In A Bushel Half Full: Reforming the Canadian Wheat Board, it's argued that the board has been earning poor financial returns for farmers over the last three years.

Sylvain Charlebois, who co-authored the study with Richard Pedde, looked at one aspect of the wheat board's marketing operations — the daily price contract — and compared it with grain prices in Montana.

Based on their comparisons, Canadian farmers are earning $18,000 less on every 700 tonnes of grain they deliver, Charlebois said.

"The Canadian Wheat Board can do a better job in trading," Charlebois said. "It's not a bad trader but it should learn how to trade better."

The Canadian Wheat Board has a monopoly on the marketing of Western Canadian wheat and barley, something it says helps ensure stable prices for farmers. However, many farmers want the right to market their own grain, a sentiment the Conservative government supports.

But wheat board spokeswoman Maureen Fitzhenry dismissed the C.D. Howe report's findings, saying the five-page document is full of inaccuracies and incorrect assumptions.

A comparison using the daily price contract, something the wheat board no longer uses, can in no way be considered a reflection of its overall performance, she said. Even comparing the marketing systems in the two countries is difficult, she said.

"We sell to a different mix of customers than the Americans," she said. "We're selling 80 per cent of it overseas, not south of the border. We have different transportation issues to deal with."

If the authors had looked at the wheat board's entire marketing initiatives, they would have seen a different picture — one where Canadian wheat farmers earned $1 a bushel more than American farmers in 2007-08, Fitzhenry said.