End of wheat-board monopoly bolsters Tory stand against regulation

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Stephen Harper is using his majority power to scrap the wartime-era monopoly Ottawa granted the Canadian Wheat Board over western wheat and barley sales, a move laden with political symbolism for the Conservative Leader.

The change will grant western Canadian farmers, from B.C.'s Peace River district to eastern Manitoba, the freedom as of August, 2012, to sell their wheat and barley to whomever they choose. In most cases, the buyers are expected to be big agricultural firms such as Cargill.

The Tories have an affinity for policies, where feasible, that demonstrate to their supporters they're still anti-government after half a decade in power. From scrapping the long-gun registry to killing the mandatory long-form census, the Conservatives like to be seen removing the yoke of government compulsion from voters' necks.

For Mr. Harper, it's also personal. He campaigned against the Wheat Board in the late 1990s when he helmed the right-wing National Citizens' Coalition lobby group and backed a farmer's court challenge of the grain-sales monopoly that was first granted in 1943.

"It's about the right of citizens to own private property," Mr. Harper said in a 1998 news release that pointed out Ottawa "used legal arguments from the confiscation of the property of Japanese Canadians to extend the Wheat Board's powers."

Critics warn the Conservative moves will ultimately spell the end of the Wheat Board, despite Ottawa's promise of assistance to keep it operating for five years, because a falloff in suppliers will erode the power it commands in the market.

The measure is divisive. A Wheat Board plebiscite recently showed 62 per cent of wheat farmers voted to stick with single desk monopoly sales, as did 51 per cent of barley producers.

The Tories offer up their own arithmetic in reply. There are 57 federal ridings across the 10 geographic districts controlled by the Wheat Board. More than 90 per cent of these, or 52, voted Conservative in the 2011 election.

"Since Day One, the Harper government has made it very clear that marketing freedom was a cornerstone of our platform," Agriculture Minister Gerry Ritz said Tuesday.

The Winners: Richard Gray, University of Saskatchewan agricultural economist, says big grain handlers such as Cargill, Viterra and Bunge should end up better off. They will face a huge new supply of sellers competing to unload their product and make money off the marketing margin, or difference between the purchase and resale price.

The Losers: The Canadian Wheat Board may be toast after Ottawa removes promised operating support in half a decade. "The chances of their survival beyond the five years is remote at best," Prof. Gray predicts. The northern Manitoba port of Churchill can't be counted out, but it faces an uncertain future, too. It's been extremely dependent on shipments of grain dispatched by the Canadian Wheat Board to foreign buyers, and there's no guarantee private resellers will use it. Ottawa has promised funds to help it adjust.

Exceptions to the Rule: The Harper government describes ending the Wheat Board's monopoly over sales as a blow for "marketing freedom." But their commitment to fewer restrictions for producers doesn't extend to dairy, egg or poultry farmers. Those sectors are run by a command-and-control approach to farming called supply management that restricts what producers can do.

The Farmers: Ottawa is not promising farmers will see more money for their grain, but is instead talking up the potential for more investment such as pasta plants to drive demand for the crops. Studies have suggested the average price fetched will in fact drop because sellers will be competing for business with foreign buyers. And as Prof. Gray notes, just south of the border, where grain is already sold freely, there's not an abundance of pasta plants. Pasta is fragile and plants tend to be built close to large population centres.