Wheat board directors broke ranks with lawyers to sue Ottawa

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Canadian Wheat Board directors are going against the board's own legal advice in launching a lawsuit against the federal government over the grain agency's future, a former director says.

"It's a waste of farmers' money," said Jeff Nielsen, a farmer from Alberta who resigned as a board director on Monday.

Mr. Nielsen said the board's internal lawyers and an external law firm, Fraser Milner Casgrain, advised directors during a meeting last Tuesday that a lawsuit against the government had little chance of success. Nonetheless, eight of the board's 15 directors voted to proceed with the suit, which was filed the next day.

The directors allege the government is acting illegally by proposing legislation to end the board's 76-year old monopoly over the sale of wheat and barley grown in Western Canada. Lawyers from Fraser Milner are handling the case.

"As any good lawyer will tell you, there's always a chance," Mr. Nielsen said in an interview from his farm near Olds, Alta. "But at the end of the day, the government has a majority and it will get enough votes to win."

Alberta farmer Henry Vos resigned as a director last week, also saying the lawsuit is a waste of money and runs against the board's legal advice.

Wheat board chairman Allen Oberg called those suggestions "ridiculous."

"There's no way we would proceed with a case that was frivolous," said Mr. Oberg, who also farms in Alberta. Mr. Oberg said he and the seven other directors interpreted the legal advice differently. "Our legal advice is that we have a very arguable case."

Not surprisingly, Agriculture Minister Gerry Ritz sided with the dissident former directors.

"It's unfortunate that Mr. Neilsen felt that that the only way to remove himself from the board's 'path of self-destruction' was to resign," he said in a statement to The Globe and Mail.

"Mr. Oberg has made it clear with his reckless and baseless legal challenge, which is financed on the backs of farmers, that he will stop at nothing to prevent farmers from marketing their own grain," he added.

Bur Mr. Oberg said the board had an obligation to proceed with the lawsuit especially since a majority of 40,000 farmers recently polled by the board backed keeping the board's monopoly. Mr. Oberg added that Mr. Nielsen and Mr. Vos have been strong supporters of the government's decision to dismantle the board and when it came to the legal advice, "they may have been hearing what they wanted to hear."

The wheat board is made up of 15 directors, 10 elected by farmers in districts across the Prairies, four appointed by the government and one chief executive. It is understood that only the eight farmer-elected directors voted to initiate the lawsuit.

In his resignation letter to the board chairman, Mr. Nielsen said the decision to sue "shows a total disrespect for producers and the stable government infrastructure that underpins our society."

He added that "the CWB has an opportunity to move forward and adapt with farmers to help them compete in the global marketplace. You and other directors committed to the status quo have instead chosen a path of self-destruction. It is truly an unfortunate day for producers of wheat and barley."

With a report from John Ibbitson