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article imageOp-Ed: The end of an era and the Canadian Wheat Board

By Ken Hanly     Jul 27, 2012 in Politics
Brandon - The three Canadian Prairie Provinces during the first half of the twentieth century fought against large corporations especially grain companies. There were also alternative radical third parties on the political scene.
Early settlers on the Prairies found themselves exploited by large corporations often based in eastern Canada. They also found themselves at the mercy of large grain companies who would give them low prices for their grains. The settlers developed their own alternative institutions often with the help of third party government's such as the Cooperative Commonwealth Federation(CCF) in Saskatchewan.
The CCF was an openly socialist party. Among its achievements was the first universal single payer health care plan in North America. The party platform was called the Regina Manifesto named after the city of Regina where it was adopted:
The Regina Manifesto proposed social service programs such as publicly-funded health care, supported peace, promoted co-operative enterprises and vowed that "No C.C.F. Government will rest content until it has eradicated capitalism and put into operation the full programme of socialized planning which will lead to the establishment in Canada of the Cooperative Commonwealth."
Consumer Cooperatives are still prominent on the prairies as are the complimentary member controlled Credit Unions called Caisse Populaires in francophone areas. There is also a wholesale cooperative Federated Coops and a Cooperative refinery in Regina. However the institutions formed to give farmers power marketing grain are gone.
There are no more Wheat Pools and the Wheat Board has lost its monopsonic power as of August 1 of this year. A wheat pool is a co-operative that buys grain from farmers. In 1923 and 1924 three Wheat Pools were created to help break the power of large private grain corporations dominating the trade.
The first Wheat Pool was the Alberta Wheat Pool set up in 1923. Wheat Pools were also formed later in Saskatchewan and Manitoba. In 1935 after the Wheat Board act was passed the Pools operated as grain elevators only as purchasing and marketing was through the Board. Nevertheless after the end of the Second World War most grain elevators on the prairies were Pool elevators.
In the last decade of the twentieth century the Pools were privatized. In 1998 Alberta Pool combined with the Manitoba Pool to become Agricore Cooperative Ltd. However Agricore became a publicly traded company no longer farmer owned. The Saskatchewan Pool also privatized to become a publicly traded company. In 2007 Agricore United as it was then called became Viterra and Wheat Pools were ancient history. Viterra is just another member of a small group of huge grain buying corporations that are becoming oligopolies. The final farmer run corporation used to fight the grain giants was the Canadian Wheat Board.
August the first this year will see the virtual end to all the organizations painfully built up during decades and run by farmers themselves to fight corporate grain interests. The Wheat Board was a monopsony a single buyer and marketer of wheat and also barley set up in 1935. The Board returned the proceeds of sales to the farmer members. As a result of the Conservative Harper government legislation the system will become voluntary. The Board will lose its monopsonic power and since the Board itself has no network of grain elevators or much other infrastructure it will probably be of little significance.
The Wheat Board Act as interpreted by some requires a plebiscite before significant changes are made to the powers of the Board. When the Conservative government decided to remove the single desk selling powers of the Board the directors held a plebiscite. This showed that 62 per cent of farmer owners favored keeping the single desk system. The Conservative government argued that they won election on the prairies by a wide margin and abolishing the Wheat Board as it is was part of their platform. This is quite true but it is not the same as a referendum.
The original Board of Directors of the Wheat Board had ten directors elected by farmer members and hence a controlling majority. However, the Conservative government after passing Bill C18 on December 15th 2011 removed all elected members and now just 5 government appointed members remain. Now a few giant grain companies have almost the same power as the Wheat Board with its single desk selling monopsony.
Private grain companies would indeed love the advantages that come with the Board's single-desk status, and in fact the largest ones already have them and more. It is estimated that between 70 and 90 per cent of the entire global grain trade is controlled by just four corporations: the “ABCD group,” composed of ADM, Bunge, Cargill, and (Louis) Dreyfus.[4] These transnational giants use their oligopolistic control of markets to pay producers as little as possible and charge consumers as much as possible, pocketing the margin as private profit. The Wheat Board, in contrast, works as an agent of the farmers, making deductions only for operating costs and not for private profit, with its primary task to pay farmers as much as possible.
Nevertheless the progress of corporate control of the universe marches on helped on by large corporate farmers who think that they will win out after smaller producers get squeezed out and sell to them. However, there are also many smaller producers who unlike their pioneer ancestors are mesmerized by talk of freedom and free markets while selling their grain to huge oligopolistic corporations.
This opinion article was written by an independent writer. The opinions and views expressed herein are those of the author and are not necessarily intended to reflect those of DigitalJournal.com
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