The Canadian Wheat Board, the last major agricultural marketing monopoly in the world, can survive the loss of its exclusive hold over the buying and selling of Western Canada’s wheat and barley and compete in an open system, Agriculture Minister Gerry Ritz told Reuters on Tuesday.
Ritz’s Conservative Party won a majority government on Monday, giving it for the first time the legislative clout to strip the board’s monopoly as it has long intended.
“I was not shy about raising this at every whistle stop that I made in Saskatchewan in eight different (electoral districts), plus my own,” Ritz said. “No one threw eggs at me. There’s some concern we’re going to throw out the baby with the bathwater (but) I told everyone ‘Not a chance.'”
Canada is the world’s biggest shipper of spring wheat and durum, mostly through CWB sales.
The CWB does not own crop storage facilities or port terminals, but instead moves grain through privately-owned facilities of companies such as Viterra, Cargill and Richardson Pioneer.
That system could continue, even if the CWB becomes a competitor instead of a supplier, Ritz said.
But board chairman Allen Oberg, a farmer at Forestburg, Alta., said the former Australian Wheat Board lasted without its grain monopoly for less than three years before selling its assets to rivals, despite having grain-handling facilities.
The CWB’s lack of assets to move grain would leave it “completely reliant” on rival grain companies to carry out its sales, Oberg said. “That would put us in a vulnerable position.”
In Ontario, a voluntary marketing organization replaced a monopoly wheat seller, but it runs on a smaller scale than the CWB, which is one of the world’s biggest grain marketers.
“Could the Canadian Wheat Board exist as a brokerage organization? Perhaps, but it would be a very different Canadian Wheat Board,” Oberg said.
Opening up choice for farmers could result in more private investment in developing better grain varieties and possibly in building processing facilities in Western Canada, Ritz said.
“Innovation has been stifled because farmers are saying ‘I’m not going to spend a lot of money on this crop because I can’t pick and choose when I can sell it.'”
No farmer vote
Ritz, who hopes Prime Minister Stephen Harper will reappoint him as agriculture minister, said in an interview that he will not hold a vote by farmers to decide whether the CWB keeps its monopoly, but said the government will consult farmers.
The federal Canadian Wheat Board Act gives the board its monopoly, but it is led by a board controlled by farmers elected by other farmers.
A farmer plebiscite should be held to decide the monopoly’s fate, Oberg said.
“We respect the results of the election last night, we’re hoping the government respects the Wheat Board’s democracy as well.”