Free the grain: The Canadian Wheat Board is anti-consumer, anti-competitive, anti-poor and deserves to be dismantled

Mark Milke
Financial Post

Politicians who favour government monopolies pretend that when they nationalize companies or protect monopolies their actions are pragmatic and non-ideological, but any reversal that lets in competition is ideological.

The latest example comes courtesy of the Bloc Quebecois, New Democrats and Liberals. Last month, the troika of separatists, socialists and interventionists moved a motion in Parliament to require the federal government to hold a plebiscite for farmers on the Canadian Wheat Board monopoly: i.e., whether the Winnipeg-based "marketing" agency should continue to force Western farmers to sell all their wheat and barley only through the board. (The board is given its monopoly powers by the federal government.) On Monday, a report commissioned by the federal Conservative government recommended freeing farmers to sell their wheat and barley by 2008.

This recommendation might not set the boardrooms of corporate Canada afire but given that even CEOs eat breakfast cereals (the ingredients of which originate on the Prairies), even they might find the current system bizarre and unfair.

For example, one Manitoba farmer I talked to recently, Glenn Tizzey, notes the absurdity of the current system. If Tizzey wanted to mill wheat and barley -- which he presently won't, given current Wheat Board controls -- he'd be forced to unload both from his farm bins, put the grain in trucks, haul it 20-plus kilometres to the nearest grain elevator, sell it to the Wheat Board, pay a fee per tonne for the privilege and then buy both his barley and grain back from the board at a higher price -- all so he could process the product originally stored in grain bins about 40 metres from his factory mill.

To put this in Ontario terms, it's as if steel producers were forced to first ship their product through a government-mandated monopoly before they could buy it back at a higher price, and only then sell it to Ford, General Motors, Chrysler, Toyota and Honda.

But the parliamentary interventionists see no pragmatic case for abolishing the Wheat Board monopoly. "There is no business case for abolishing the Canadian Wheat Board; it is pure ideological madness," argued Winnipeg NDP Member of Parliament Pat Martin in Parliament last month.

The NDP's chief interventionist wasn't the only one to call for the retention of the monopoly. Also in Parliament, Liberal Agriculture critic Wayne Easter rhetorically asked of the Conservative government, "What will it not do to take power away from primary producers and give that power to the international grain trade?"

"Primary producers" -- Western farmers in the case of the Wheat Board -- have long had their power to decide where, how and to whom they will sell their wheat and barley taken away by Ottawa. In the past, dissenters who violated the monopoly have been jailed. So participating directly in international markets would be an improvement in their currently status. But Easter was just playing the local demagogue, complete with the usual anti-foreigner rhetoric.

But the hypocrisy is spread out evenly. The Wheat Board doesn't have jurisdiction in Quebec and the Bloc would never ask Ottawa to allow a federally created monopoly with Ottawa-sanctioned restrictive powers to enter la belle province and determine how Quebec agricultural interests market and sell their products.

The Wheat Board also doesn't operate in Ontario or Atlantic Canada. Easter, from Prince Edward Island, has yet to ask the government to expand the board's mandate to cover potatoes from P.E.I. or grapes, corn, barley and wheat from Ontario.

Such political doubletalk is also where the charge of ideology from Martin et al. is laid bare as transparent nonsense. The domestic and export markets work perfectly well in the West for every other agricultural product (and in the rest of Canada for all) where producers and buyers find each other without government help.

Worse than the rhetoric is the reality: The Wheat Board monopoly on Western grain and barley distribution is, as with dairy marketing boards, an anti-consumer cartel. The CWB boasts on its Web site that, "Instead of competing against one another for sales, Western Canada's 85,000 wheat and barley farmers sell as one through the CWB and can therefore command a higher return for their grain."

Insofar as the board's monopoly is defended on the justification that it brings higher prices to producers, such defenders frankly admit that consumers at home and abroad are being gouged. Liberals, New Democrats and the Bloc like to think of themselves as friends of the poor. Not when they're busy keeping food prices higher than they would be in an open market. It's not only corporate CEOs who eat breakfast cereals made from prairie grains but families with marginal incomes.

As for the troika's motion to require a plebiscite among farmers, it's akin to asking grocery stores to vote on whether new competitors should be allowed; except for the very brave and competitive, a "no" answer would hardly come as a surprise, though that might not be the result in this case. Plenty of Western farmers don't like the Wheat Board.

Regardless, the Conservative government should move ahead and end the monopoly. The Canadian Wheat Board is an anti-consumer, anti-competitive, anti-poor cartel. It's time its' defenders faced up to those facts and for the board to face real-world competition.

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