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Wheat Board on railroad to privatization

Agriculture Minister Gerry Ritz tabled a bill to end the Canadian Wheat Board (CWB) monopoly in Western Canada in the House of Commons on Oct. 18.

Agriculture Minister Gerry Ritz tabled a bill to end the Canadian Wheat Board (CWB) monopoly in Western Canada in the House of Commons on Oct. 18.

If passed, farmers and grain companies could enter into forward contracts for the purchase or sale of wheat, barley and durum after Aug. 1, 2012.

“The Marketing Freedom for Grain Farmers Act will give Western Canadian grain farmers the right to choose how they sell their wheat and barley,” said Ritz, in a press release. “Our government is delivering on our long-standing promise to give Western Canadian grain farmers marketing freedom, just as they have when selling their canola or pulses.”

If passed, the act will allow farmers to sell voluntarily through the CWB or on the open market.

“We are repealing the monopoly powers of the Canadian Wheat Board,” said Westlock – St. Paul MP Brian Storseth, in a phone call from Ottawa last week.

The vast majority of agricultural producers he has talked to have had nothing but praise for the Conservative government's direction on the wheat board, and young farmers have been especially in favour of ending the monopoly, he added.

“One of the big things moving forward for young farmers is making sure they can have more stability and get a better return on their investment, and I believe they will get that through dual marketing.”

Farmers who prefer a pooling agency will still be able to use the CWB, he said. Storseth referred to canola as an example of the open market economically benefiting farmers. He also pointed to a pasta plant recently announced to be built in Regina. Secondary industry is coming onside in rural areas and ending the monopoly is an opportunity for secondary industry to have access to local grains, he said.

“This is a perfect example of why it's important that we continue to help do these things.

It will only help and benefit rural Canada, particularly rural Alberta.”

The act would allow the CWB to act as a voluntary marketing entity while it starts the transition to private ownership by August 2012.

After receiving Royal Assent, the act would streamline the board of directors to consist of five government appointed directors, which would develop the business plan for privatization. Ten directors will be released from duties.

The interim CWB would have until 2016 to submit a plan for commercialization for the minister to consider.

The directors not getting reappointed have refused to work with the government, said Storseth, adding the government wants the board to be successful and the relieved directors have fought against the changes.

The end of the monopoly follows other Conservative changes aimed at eliminating the “nanny state,” Storseth said, “Where the government knows best and can tell you all the time what to do.”

The act follows along other party plans at bringing more “common sense” to government, he added.

Most farmers who have concerns about the end of the CWB monopoly have not heard the truth from opposition parties or friends of the board, according to the MP.

“After 13 years at the helm of the CWB, we will lose our power and our premium returns. And we will be asked to simply trust that ‘market forces' will somehow uphold our interests,” said Allen Oberg, chair of the CWB's governing board of directors, in a press release last week.

He said the act would make farmers “powerless” against railways.

The government has assured the act will not change the current access to producer cars, as protected in the Canada Grains Act.

The Grain Growers of Canada has asked everyone to tone down the rhetoric and work together over the coming months, president Stephen Vandervalk said.

“On my own farm, sometimes the Wheat Board has made money for me and some years it has lost money. But at the end of the day, farmers who want to market their own wheat and barley need to have the freedom to do so, as they do in all other parts of Canada,” said Vandervalk, who farms near Fort McLeod.

“That is why we support this legislation.”

The government plans to repeal the Canadian Wheat Board Act before 2017. An interim act would be established to offer pooling options. By 2017, the interim body would either be privatized or dissolved, and the interim act repealed.

The CWB was imposed on Western farmers in 1943 during World War Two when Canada was committed to supplying cheap wheat to Britain, the government press release notes.

Created in 1935, “the government obviously saw a need to reduce the profits for Western Canadian farmers in order to guarantee market stability in Europe,” said Storseth. “That's not the case anymore.”

“It has been very burdensome on our guys,” he said. Western farmers not having the right to the same profit as farmers in Ontario is a “fundamental injustice,” he said.

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