Proceedings of the Standing Senate Committee on
Agriculture and Forestry

Issue 7 - Evidence - Afternoon sitting


SASKATOON, Thursday, March 26, 1998

The Standing Senate Committee on Agriculture and Forestry, to which was referred Bill C-4, to amend the Canadian Wheat Board Act and to make consequential amendments to other Acts, met this day at 1:06 p.m. to give consideration to the bill.

Senator Leonard J. Gustafson (Chairman) in the Chair.

[English]

The Chairman: Our first witness this afternoon is from the Federation of Production Co-operatives, Mr. Bill Rosher, and would you introduce the gentleman with you? We will ask you to make a presentation and then we will have questions.

Mr. Bill Rosher, Secretary, Saskatchewan Federation of Production Co-operatives: Thank you, Mr. Chairman. I think we will simply read our publication here.

The Saskatchewan Federation of Production Co-operatives is a voluntary membership organization of agricultural production co-operatives and machinery agency co-operatives. Established in 1945, we have represented our members' concerns to all levels of government for the formulation of policy conducive to the advancement of the co-operative model food production and marketing. Individual member co-operatives are wholly owned and managed by the farm families who received the services of that co-operative. We are most active in supporting the development of new and existing small-scale, food-producing co-operatives in Canada and abroad.

We have fully supported the co-operative model of grain marketing embodied in the present Canadian Wheat Board Act. As a result of the successful establishment of a Canadian agricultural co-operative movement during the 1920s and 1930s the Canadian Wheat Board is simply a tool based on our principles and values to balance the economic power wielded by private grain companies, grain exchanges, multinationals, railways, et cetera.

True co-operatives, as well as the Canadian Wheat Board, are not in business to make profit for themselves. They exist to maximize revenues to farmers by reducing input costs or by extracting a better return from the marketplace.

The success of the Canadian Wheat Board has been attributed to the three pillars: single-desk selling, price pooling and federal government financial guarantees. These institutional strengths have benefited grain farmers over the past 60 years and no doubt would continue had the regulatory environment in which the Board has operated also continued. The Board was an integral part of a Canadian grain system in which farmers were the owners of the grain-handling facilities. The government supported and regulated the movement of grain from elevators to ports and the board co-ordinated movement from the producer to the customer.

Today the regulatory framework of the grain transportation system is gone and further deregulation is on the horizon, including the removal of the freight rate cap. Some co-operatives are changing from a service-to-member oriented organization to corporations attempting to maximize profits for private shareholders. The existence of the Canadian Wheat Board seems to be at odds with the overall government policy of self-reliance, privatization, deregulation, open market, competition and other neo-conservative language that make co-operatively-minded people feel out of place.

There is no question a massive restructuring of the Canadian grain industry is taking place today. We congratulate Mr. Goodale on his attempts to glean the farmer's point of view on the future of the grain industry. Unfortunately, the message the government has received is one generated by the industrial elite rather than the Canadian grain producer.

The apparent inability to deliver the grass roots message is our responsibility. Farmer organizations in this country represent a broad spectrum of agricultural policies but none truly represent the interests of the farmers. Well-financed and organized groups of farmers are providing the pressure for the government to react. Farmers as a movement are losing control of their large co-operatives, are removed from the bureaucratic centre of power in provincial and federal organizations and institutions and are so divided that we have been unable to present a clear alternative to the government for a future for our industry from a grass roots point of view.

Canadians as a group tend to avoid confrontations or dealing with uncomfortable realities. We are breaking with this attitude because we have run out of options. We are not trying to be offensive but we must indicate to you our concerns about the future of the Canadian Wheat Board as an economic and social instrument working on behalf of farmers.

The Saskatchewan Federation of Production Co-operatives rejects Bill C-4. We do not believe this bill will resolve any real or perceived problem; in fact, we have difficulty in pinpointing which problems are being resolved through the passage of this bill.

We appreciate that the Senate has recognized the failure of this bill to address the marketing debate in Western Canada. By holding hearings into this piece of legislation we have a chance to address its inadequacies and the government's inability to reach producers by giving them a say in the policy development process.

The federal government initiated the process by commissioning a Grain Marketing Review Panel. The panel's makeup gave far more representation to the grain trade than to farmers. The anti-board movement was selected to prepare most of the relevant materials used by the panel. Members of the panel included retired farmers or grain executives who provided advice on matters in which they will no longer participate or who, in the past, have had opportunities to make the necessary adjustments and refused to, for whatever reasons.

The amendments introduced in Bill C-4 reflect to a great extent the personal views of the present commissioners of the Canadian Wheat Board on the institutional future of the board. We do not believe the present trio of commissioners are in a position to set policy for the board. They were appointed by a previous government with a different political agenda. Their primary duty is to market grain and not to develop policy which refuses to recognize the changing patterns in farmer culture and the overall trend in government policies in the context of regional and international trade agreements.

In our opinion, and in concert with the Canadian Wheat Board Advisory Committee majority, Bill C-4 does not give farmers accountability or control of their board. The bill increases the cabinet and ministerial involvement and authority in the Canadian Wheat Board, While reducing the role of Parliament and the government's commitment in regard to guarantees.

Amendments which affect the pillars of the Canadian Wheat Board are permissive and could be very destructive in the hands of a government, board or management that does not support orderly marketing. It is important to notice that there is nothing in the bill that translates the vocal support provided by the government to the board into legislative provisions to strengthen the Wheat Board.

In a very candid statement the minister responsible for the Canadian Wheat Board has recognized the future of the board is a farmer's problem and should be resolved by the farmers themselves. The group holding power in the present institutional structure of the grain industry are not farmers and their representation on behalf of farmers is, at the least, questionable.

We, as farmers, should be allowed to publicly choose the values and policies that will direct the transformation of the power structure of the grain industry. Farmers must recognize the conflicting values that exist within our group that the government is trying to accommodate. There will be no consensus on the issues of the board's future. We highly regard the right of others to hold values different than our own co-operative values. The pretence that the practical implementation of Bill C-4 will increase the political viability of the board must end.

As a result of government policies of deregulation, and major co-operatives pursuing profit maximization in lieu of member servicing, the board is becoming a dysfunctional institution. Any attempt to legislate the viability and acceptance of the board will increase social tension in the rural communities and will foster civil disobedience by some. We believe that the long-term future of the board will derive from the fact of its viability and sustainability that arise naturally from the community and not from enforcing legislation.

The Saskatchewan Federation of Production Co-operatives contends that there is little of value in Bill C-4 but respects the right of a duly-elected federal government to create legislation to further its own agenda. However, the lack of government representation in Western Canada suggests this regime has lost the confidence of the prairie electorate. Therefore, the only amendment to Bill C-4 we submit is to give farmers the opportunity to ratify this bill in a binding plebiscite. The terms of reference could be developed by the government in consultation with the present advisory committee to the Wheat Board.

In the event producers fail to support passage of Bill C-4 the process of designing and implementing a marketing system suitable to the Canadian producer would be given over to the recognized farmers' representatives such as the advisory committee. In this way the debate will be among the stakeholders whose livelihoods are at risk.

The Chairman: Just for clarification, is your cooperative in the business of farming?

Mr. Rosher: Yes.

The Chairman: And you represent different cooperative farms?

Mr. Rosher: Yes. We represent the Saskatchewan Federation of Production Co-operatives, which is an organization representing agricultural co-operatives.

The Chairman: Only farms or do you represent other cooperatives or retail trades?

Mr. Rosher: Just farms, just production.

The Chairman: How many farms would you represent?

Mr. Rosher: The last time I looked there were over 50 on the province's registry, representing untold numbers of members. We have never done a study on that.

Senator Stratton: That means 50 different co-operatives representing --

Mr. Rosher: A number of membership which we should, actually, be looking into closer, but resources are used elsewhere.

Senator Hays: Your suggestion for a plebiscite on Bill C-4, to be among the producers of Board grains only, or what kind of a plebiscite?

Mr. Rosher: I think we would have to involve all producers of food in Western Canada. I know there are a number of producers out there who grow non-Board crops just so they do not have to market through the Board. I think the concept that we are trying to push is that farmers as a group, all producers, including the producers of herbs and spices, should come together to develop one marketing system, to gather the strength of a single marketing system instead of splintering off because they do not like the politics of one group or the other.

Senator Hays: That sounds great. How are you doing?

Mr. Rosher: I would have to ask you that question. We are asking for direct democracy, evaluation of a government's bill considering the fact that they do not have representation in Western Canada, or effective representation, at the moment. It probably has not been done. I do not know if it has been done before but it is hard to argue with direct democracy.

Senator Hays: But of course, you do. There are MPs there, just not many Liberal MPs, and they represent you and speak for you in Parliament and you have a relationship with them. I am just not sure that the fact that there are not very many government MPs is a reason to question the government's good judgement in trying to bring forward something which is going to be more producer-responsive, which is really in keeping with, as I understand it, the culture of food producers that you are trying to promote.

Mr. Rosher:The only problem is that our elected representatives voted against this bill, so how is our message being encompassed by this bill's passage? I think it was mentioned earlier that a series of grain matter meetings have been held by the Wheat Board. Producers at a majority of them passed resolutions condemning this bill. Where has that been reflected in any amendments that the government made to this bill?

Producers went to Ottawa, various organizations, presenting various amendments, and not one was accepted. The only amendment that we got was that general farm organizations cannot initiate the inclusion clause. How are farmers being represented here?

Senator Hays: Well, how far would you broaden it? If a commodity sector wanted to trigger the inclusion clause and have consideration of grain or oil seed being declared or becoming a Board commodity why should other commodity producers have a say in that process?

Mr. Rosher: I think we can take rye as an example. In the area that I farm rye would be a definite advantage, we are in dry-land farming in the southern Palliser triangle. If there was a proper marketing system in place I would be growing rye but at the moment it is hard to discover a price for rye prior to seeding because rye is not even on the Exchange at the moment. Why should I be excluded from voting to put rye under the Board because I do not grow it? It is a chicken-and-egg problem, I realize. Maybe if we were given enough warning we would start growing it but I cannot afford to be fooling around with crops when I do not know what the price will be.

Senator Whelan: How many acres or hectares does your membership have?

Mr. Rosher: That is a tough one. We have the Matador Farm, which is one of the biggest farms in Saskatchewan -- it has eight members. And then we have a lot of others that we do not really know about. We ask them when they become members how many acres they have but they would be farmers of anywhere from two to eight members and range anywhere from six or seven quarters, perhaps up to eight sections, that sort of thing.

Senator Whelan: Matador is a big and an old farm.

Mr. Rosher: Yes. I think it is probably the biggest one that is a member of our organization.

Senator Whelan: It is one of the original ones?

Mr. Rosher: Yes, it was one of the founding members.

Senator Whelan: I was going to ask what varieties of grain do you grow, how many tonnes. You have no idea, then? You grow wheat, you grow canola, you grow --

Mr. Rosher: I can tell you what we grow on our farm. We raise cattle and grow wheat, mostly durum, and at one time a bit of oats and a bit of rye, mostly for feed, but durum was our biggest crop.

Senator Whelan: You sell your product to the Saskatchewan Pool?

Mr. Rosher: We have been on our farm for the most part.

Senator Whelan: But you are not bound by membership to sell to a cooperative?

Mr. Rosher: No.

Senator Stratton: If the bill goes through, as I understand it, you say that you would like all members of the Canadian Wheat Board to vote on the inclusion or exclusion of any grain?

Mr. Rosher: I think we have to begin by saying we do not support this bill.

Senator Stratton: I understand that, but putting that aside for the moment and going to the inclusion-exclusion clause, you were talking to Senator Hays with respect to the fact that while you would like to grow rye you cannot grow rye because the price is too low and if there was a vote regarding the inclusion of rye under the Wheat Board you would like to have a vote even though you do not grow it?

Mr. Rosher: Yes, certainly.

Senator Stratton: So would you like to also have the same vote on canola?

Mr. Rosher: Yes. It is possible to grow canola in our area.

Senator Stratton: With any grain not currently listed you believe that a permit holder, despite the fact that he does not grow that grain, should have the right to vote on the inclusion of any grain under the Wheat Board?

Mr. Rosher: Yes.

Senator Taylor: It is an interesting brief, but in your title you call yourselves the Saskatchewan Federation of Production Co-operatives. How can you use the word "cooperatives" in there? You sound like you are all individual marketers and you are arguing for a free market, so what are you doing co-operatively?

Mr. Rosher: Each one of the farms is incorporated under the Provincial Co-operatives Act and so the farms themselves are cooperatives, and then our organization is also a cooperative although we are a federation of the other cooperatives. I belong to two cooperatives. here, I am a member of the Federation of Production Co-operatives and I am also a member of my own co-op farm.

Senator Taylor: You say you can register each farm as a cooperative. Does that mean ma, pa and the kids or does that mean neighbours or in-laws or what?

Mr. Rosher: It can depend. Some are just family co-ops and some are other relatives or neighbours. It just depends on who wants to get together and form a farm cooperative.

Senator Taylor: How does that differ from a corporation?

Mr. Rosher: It has one major difference. We are recognized as a small business corporation under the Revenue Canada regulations and the main difference is that it is one-member-one-vote rather than one-share-one-vote.

Senator Fairbairn: Let us put aside for the moment that your prime proposition that this bill should not go forward or if it were to proceed any further it should do so through a very broad plebiscite. You are talking about the desirability of decisions and policies being led by the farmers or the representatives of the farmers.

In terms of the bill it would seem that there is at least a beginning desire to include farmers in the Canadian Wheat Board operations as a majority of the board. I wonder if you see merit at all in this, that this would be a process that would be basically driven by the farmers themselves and their representatives. Elections are funny things. They are enthusiastically or vigorously fought and very often the outcome of them is to put voices in a room where those voices have not been before. Is there not some merit, in your view, in the fact that there would be in that room and around that table a majority of voices of people elected by farmers to carry their concerns and their views and their ideas right into the heart of the Wheat Board?

Mr. Rosher: The problem we had with this process is that the government went out and consulted with farmers -- the Grain Marketing Panel Review -- but we saw none of the farmer's point of view reflected in that report. So we have a question: Why are the amendments to this bill brought forward by the present-day commissioners and board management, why did they not put the governance of farmers in place and then let them decide how they would like the bill to be amended?

Right now we are going to elect 10 producers to an organization that handles $6 billion in grain sales. I, personally, am a little uncomfortable at the idea of electing even a producer, off the street, and putting him into that position with five appointed government people. I have a feeling that that person will have to come back to the countryside at the time of the next election and represent the view of that board to the farmers and one-third of that board are government people.

Who put the present-day commissioners, whose amendments include cash buying, which facilitates the end of Crown agency status, in place? Not the present-day government, not the people who voted in the last election. Why are we looking at their amendments as the basis for the future of our marketing situation?

So I would look at it from the other point of view. I would say take it back to the farmers and let them decide on a marketing structure and then let the federal government come to them and say this is what we can provide, this, this and this. Work it in. Because the structure is changing out there and to let these commissioners decide how we are going to meet these new challenges, working from the past, is not what we figure should be happening.

Senator Fairbairn: Would you not have to have some kind of a structure for the farmers to propose these views?

Mr. Rosher: Exactly.

Senator Fairbairn: This is our third day on the road and we have heard are vastly different points of view from farmers. In order to get them sorted out you would have to have -- if this is an effort on the part of government to put farmers into the Wheat Board and that, you say, is premature -- some other form of body to get those views that you are suggesting put before the board or the government.

I am just curious as to whether in any part of your consideration the notion that there would be actively elected farmers on this kind of a board is a good idea, a better idea than not having any there at all?

Mr. Bev Currie, Co-Director, Saskatchewan Federation of Production Co-operatives: Our point of view is that we would rather have the way it is now than the proposal.

Senator Fairbairn: Really?

Mr. Rosher: Yes.

[Translation]

Senator Robichaud: You say you're a cooperative association and that's a group of associations. Are your producers members of the National Farmers Union or of other associations like that?

[English]

Mr. Rosher: I would have to guess. They may be. We do not request that information on signing up. There is a good chance that they might be members of the Farmers Union or an equal chance that they might be members of the Wheat Growers, though I would rather doubt it.

Senator Hays: You also mentioned you are part of machine agencies and you said you were not in retail business, but how could you have machine agencies if you are not in the retail business?

Mr. Rosher: Our farm is organized as a machinery agency in that we collect resources to go out and buy a line of farm machinery and that farm machinery is used to operate all the land within the co-op. We do not sell machinery as a retail line.

The Chairman: Again, for the second time, I want to thank you for appearing. We appreciate the time you have put into this very interesting report.

At this time we will call Mr. Hymer, Secretary-Treasurer of the Canadian Organic Certification Co-operative Ltd. Would you introduce yourselves?

Mr. Ken DeMong, Director, Canadian Organic Certification Co-operative Ltd.: Ken Hymer is unable to be here today. I am Ken DeMong. I am on the board of directors of the Canadian Organic Certification Co-operative and I am presenting the brief on behalf of Ken Hymer who is our secretary.

Mike Kasper is with me He is also on the board of directors of our Certification Co-op. He farms at Young and I farm at Cudworth.

I am not aware of the number of acres that farmers in our Certification Co-operative own, but, personally, I farm about 500 myself and organic producers tend to be smaller than average.

The Chairman: I might point out that you are, I believe, the fifth organic group that has appeared and there is a lot of concern seemingly in that area of agriculture.

Mr. DeMong: The organic producers we represent are for the most part small, family-farm operations in the traditional sense. The primary motivation for their move to organic food production is a moral conviction of the need to protect our environment and to provide what we perceive as "clean food products". Of course, these convictions are not shared by all producers but a growing number of small, conventional farmers are looking at organic food production as an alternative to up-scale, intensive, chemical-dependent operations.

When it comes to marketing our products, however, organic producers more than small, conventional farmers, are exposed to all the problems of dealing with buyers, brokers and agents simply because of the nature of the product we produce and the niche market we endeavour to target, that is, the demand for organic foods.

The organic industry is seriously hampered by a lack of orderly marketing. We know many organic producers who sell their certified grains in the conventional market and they choose not to be certified under the present chaotic marketing environment, avoiding the hassle with traders, brokers and agents.

We are confident that if we were privileged to have the expertise and global coverage of the Canadian Wheat Board the industry would discover immediate stability. The growth potential would be enormous and producers would be provided with protection from the daily price fluctuations by pooling, by the guarantee of the Canadian Wheat Board payment by the government and by single-desk selling -- a system which any economist worth his or her salt will tell you increases the seller's ability to extract maximum returns from the product sales.

Our annual general meeting in January, 1997, had a representative present from the Canadian Wheat Board market development and indications were that the Wheat Board would consider marketing organic grains once the Canadian General Standards Board had approved the proposed organic standards.

We desperately need more support for marketing our products, not less. We invite present processors, traders and brokers to become agents of the Canadian Wheat Board as a single-desk sales team rather than working competitively at the expense of the producer.

So, to that extent, this organization strongly supports the concept of single-desk selling and price pooling with government-backed guarantees.

This brings us to Bill C-4. In brief, we have determined that the changes recommended in Bill C-4, namely, 1) the cash buying authority, 2) the contingency fund and 3) the unusable inclusion clause all works towards the undermining of the Canadian Wheat Board.

Number one, the cash buying authority, as it now exists would, in our view, destroy the advantages to the producers of the price-pooling mechanism and, without parameters to restrict off-shore buying, grains from other countries could be used to fill market demands, possibly to the neglect of our own supplies.

Number two, the proposed contingency fund, combined with the governance provisions, effectively removes the government of Canada from the equation as far as guaranteed Canadian Wheat Board price support is concerned. The cheap food policy in Canada brought about by a series of government task force reports and white papers on agriculture promoting policies that have consolidated and industrialized agriculture has left us with the purchasing power of a 1980 dollar with which to buy 1998 goods and services.

Food producers in Canada have been subsidizing consumers for years with cheap food products at an as yet undetermined cost to our rural social fabric, resulting in an ageing rural population, vanishing rail lines and withering communities. It is obscene that with Bill C-4 one of the only support systems provided by the government, the Canadian Wheat Board price guarantee, is being swindled from producers of Canadian Wheat Board grain.

Number three, in reference to the so-called inclusion clause, 47.1, it must be said that it would be an insult to democratic principles to consider removing this clause while retaining the ability to exclude grains. However, having said that, the inclusion clause is redundant as it now stands and needs revision.

Conclusion: Support for these concerns and similar concerns about Bill C-4 are consistent with the concerns of the majority of Canadian Wheat Board permit book holders and that fact is reflected by the Canadian Wheat Board advisory committee's position which, by the way, is a democratically elected body that is as close as we have come to having representation on Canadian Wheat Board issues.

Recommendations: We would call for the total rejection and redrafting of Bill C-4 but, barring that, we would recommend these changes: 1) That the Canadian Wheat Board advisory committee suggest parameters within which the cash-buying mechanism would operate, 2) That the government must maintain the Canadian Wheat Board price guarantees, 3) That clause 47.1, the inclusion clause, be improved to reflect democratic principles by allowing a vote of all permit book holders if a call for a grain to be either included or excluded is forced by a petition of five per cent of the Canadian Wheat Board permit book holders.

We hope that we have been of some assistance to you in your deliberations on this issue and we look forward to any questions you may have.

The Chairman: I just have one question. Are you producing wheat on your farm now, organic wheat?

Mr. DeMong: Yes, I am.

The Chairman: Do you buy it back from the Wheat Board or how do you operate?

Mr. DeMong: That is the process that we follow.

The Chairman: What does a bushel of organic wheat bring you?

Mr. DeMong: I was told by the Saskatchewan Wheat Pool agent or person in charge in the Regina office that we can get anywhere between $1.50 premium to $2.50 premium per bushel.

Senator Stratton: I am going to go back to the inclusion-exclusion clause again, because you believe firmly, I take it, that any permit holder should have the right to vote for an inclusion of any grain under the Canadian Wheat Board Act and you further state that only five per cent of the producers can demand that that a plebiscite be held.

Mr. DeMong: That is correct.

Senator Stratton: So that even if you do not grow rye, oats or canola you sshould have the right to determine whether or not that falls under the umbrella of the Wheat Board?

Mr. DeMong: Well in many cases we are potential growers of any grain that is grown in the Prairies and there are a lot of farmers who do not want the instability of the open market and do not grow grains that you have to deal with on a personal basis with a buyer.

Senator Stratton: Have you ever heard of tyranny of the majority? I know democracy is not much, but it is all we have. The worry I have in a democracy ours is that there is always the fear of the tyranny of the majority. I am saying this only to the degree that a farmer who produces canola or oats right now is going to say to you, "I am a minority group here". If we took that a step further in our culture we would be in real trouble. But what you are saying is it is okay from an economic standpoint to do that?

Mr. DeMong: What I am saying is that we all live with mistakes or wisdom and in Western Canada we even elect people to the House of Commons who do not represent our views. Why not give farmers an educated guess as to what they want.

Senator Stratton: So you are saying minorities do not count? I am putting words in your mouth, you realize that?

Mr. DeMong: Yes, I realize that. Mike, do you want to answer?

Senator Stratton: In essence, that is what I conclude from what you have stated, that a canola producer or an oats producer earning his livelihood in a free-trade market and doing well has no more say in the decision regarding whether his grain comes under the Canadian Wheat Board than you. That is essentially what you are saying?

Mr. DeMong: Exactly.

Mr. Mike Kasper, Director, Canadian Organic Certification Co-operative Ltd.: A lot of times economics forces us to grow grains that we maybe would not grow. But, on the other hand, we are in the organic industry, we have gone into crop rotation and we are growing a lot of crops that perhaps are not considered conventional. Rye is one of those crops. It does not necessarily pay in my rotation but it is very beneficial to my rotation and, as a result, I grow it and I would want to have a say in how it is marketed.

On the other hand, I guess canola has been kicked around here a lot. In 1957 I brought the first load of canola into our district and most people did not have a clue what it was. They thought I raised a field of weeds but today no one would think so. I do not grow canola as a general rule, only in very wet conditions, but I would be growing canola on a continual basis if there was price stability and I find it very disturbing that there is not. Not very many years ago the price of canola was three dollars-and-something at seeding time and when the harvest come in it went up to $9. I think that is absolutely unreasonable.

On the other hand, we also have an occasion here where, I think, all of a suddenthe buyers decided that the price of canola had gone too high and they closed the door to buying for a few days or a few --

Senator Taylor: You are making our task difficult because in the last day or so we have had, I think, two, maybe three --

The Chairman: Four.

Senator Taylor: Four organic producers and most of them were dead against the Board and did not like the idea of buying back and wanted to go out -- and purported that they represented everyone's views, too. Mind you, that is what we are paid to do, to listen and try to figure it out.

That leads to one matter that has only come up once, that the Wheat Board was thinking of bringing you under their normal Grain Act provided there was a nation-wide certification system. Apparently you have been waiting for that for two or three years. Can you tell me if that is true, that you feel they will? What stage that discussion is at?

Mr. Kasper:We are expecting an answer very shortly. The latest we have heard that we might have some word on that by April 30.

Senator Taylor: Have you got any feeling about whether you are going to be in or out?

Mr. Kasper: We have been pressing for Canadian standards since 1991.

Senator Taylor: I did not mean that. I know you are pressing for Canadian standards but I know you are after a Canadian standard. Did you get any indication from the Board that they will accept organic grain as one of their marketable grains?

Mr. DeMong: That will not be automatic once the Canadian standards go in. I think there would have to be a consensus among the organic producers.

Senator Taylor: In other words, exclusion- inclusion is quite important to you. To the rest of the people here it might be quite academic but the organic producers might be actually coming up for a vote on it within the next year may be asked whether or not you want to be part of the Board, so it is much more important to you than most groups?

Mr. DeMong: Yes, I would say that.

Senator Sparrow: We are talking about a given crop and there is only provision to bring that crop in or take that crop out, it is not whether it is organic wheat or whether it is not organic wheat, it is either wheat or it is not wheat and the same is true for the other products for organic producers. There is no provision for a designation of organic wheat or organic rye or organic canola or whatever that might be?

Mr. DeMong: At this point I think that the question that farmers have to deal with would be whether to have barley as an organic grain handled by the Canadian Wheat Board or wheat, because those are the two grains that are under their jurisdiction at the present time. If there are other grains that come up for that question and a vote I would say that the organic producers would have to determine whether they want the Canadian Wheat Board to handle their organic produce, whatever grain it might be.

Senator Hays: Just as a matter of interest, as organic farmers is summer fallow usually part of your rotation?

Mr. Kasper: We are just like everybody else, we are very concerned about the environment. In fact, I think this is one of our stepping stones and we are generally aiming for a cover crop or something for all our land.

Mr. DeMong: In my operation, I tend to use a clover plough-down. I will grow something like oats and under-seed it to clover and then, throughout the summer fallowing year, that will be turned down. I notice a remarkable difference in the lack of erosion when I do that. It can be black, almost as black as the conventional farmer's summer fallow, and it will not erode.

Senator Whelan: That is green manure.

Mr. DeMong: You let the clover grow up and then you work it down as a green manure and then it stays in that state until you seed it the next spring.

Senator Whelan: I just want to ask if you are aware of a survey that the Canadian Department of Agriculture carried out all across Canada, they interviewed 2,240 people about their greatest concerns?

Mr. DeMong: It does not come to mind.

Senator Whelan: Well, 82 per cent, which amazed the people who did the survey -- that is a very high percentage in any survey -- were concerned about food safety and pure food. So I thought you people would be on top of that right away.

Mr. DeMong: Sure, now I am.

Senator Whelan: You mentioned something about your MP going to Ottawa and forgetting about you.

Mr. DeMong: It in response to the senator's question about whether or not democracy has disadvantages as well as advantages. In my constituency I definitely have a disadvantage because I do not have a person that represents my views, he represents the Reform party.

Senator Whelan: I was going to make a comparison to myself and what I did, but I am not going to.

The Chairman: Thank you, gentlemen. I now call Mr. Larson, Mr. Bryan, Mr. Bailey, Mr. Anderson, and Mr. Cooper. Would you introduce yourselves and tell the committee where it is that you farm? Begin on my left.

Mr. David Bailey: I farm at Glaslyn, which is 40 miles north of North Battleford. I am a grain farmer.

Mr. Charles Anderson: I farm by Rose Valley, 150 miles northeast of Saskatoon. I am a mixed farmer.

Mr. David Bryan: I farm about 100 miles south of here, wheat and lentils.

Mr. Bill Cooper: I represent the Foam Lake Marketing Club, from Foam Lake, Saskatchewan.

Mr. Russell Larson: I farm at Outlook, about 60 miles south of here.

The Chairman: We will ask Mr. Larson to begin. I will ask you to keep your presentations to about five minutes so that we can have questions and answers.

Mr. Larson: First of all, I would like to thank you for travelling out here to listen to us.

I am not here to criticize anything in the present bill but, rather, what is not in the bill. I am referring specifically to an opt-out provision for farmers who do not wish to market their grain through the Canadian Wheat Board.

At present, wheat, durum and barley meant for human consumption is forced into the hands of the board, and attempts to market outside the board have been met with arrests, criminal charges, crushing fines and even gaol. Growing numbers of progressive, well-educated farmers are becoming dissatisfied with the performance of the board. Attempts to persuade Ralph Goodale to allow farmers to opt out have been met with a flat rejection. His consultations with farmers have been proven to be nothing more than charades; even his personally appointed Grain Marketing Panel advocated a dual market in barley, but it was rejected without explanation.

This morning and this afternoon, opponents of grain marketing freedom have raised several objections to what we would like to see, that is a dual market, and I would like to address some of them here.

First of all, the Wheat Board does not own elevators or terminals and it would not be able to collect grain to meet is contractual obligations.

It is not necessary to own facilities to sell grain. I have loaded cars of canola sold to Louis Dreyfus Company which were destined for the Pioneer Grain terminal in Vancouver. Louis Dreyfus does not have a single elevator as yet on the Prairies, yet it can sell canola. The Wheat Board can do the same thing. Grain companies sell their grain-handling services everyday to competitors. There is no reason to believe that they would not do the same for the Wheat Board. It can contract with line elevator companies for specific grades and quantities and take possession of the grain at port.

Two, farmers would cherry-pick the market. When prices were low, they would sell their grain to the board; and when they were high, they would sell it on the open market.

Before seeding, a farmer would have to decide whether or not he is going to sell his production to the board. Once he had signed a contract, it would be legally binding, with stiff penalties for non-performance. After harvest, he would be compelled to inform the board of quantities and grades. This would enable the board to arrange sales, with full confidence that they can meet their customers' specifications. Farmers who opted out of the board would not be allowed to sell their grain to the board and would be free to sell their grain anywhere.

Farmers would try to undercut each other in order to make sales, driving the price lower and lower. Farmers are not fools. I have never heard of a farmer who was offered $9 a bushel for his canola counteroffer with $8.50. When marketing off-board crops like canola they have proven to be astute and disciplined sellers. Market information is readily available to those willing to look. We have access to the latest information through the Internet, satellite systems like DTN, and global-linked computers and fax/modems.

Four, a dual market would benefit only those living near the U.S. border. They would get the high world price while farmers living farther north would get a lower price.

With open borders, the price of wheat in Meadow Lake in the north of this province would be the same as in North Dakota, except for transportation expenses and differences in currency exchange.

Arbitrage would ensure that the prices would equalize as they do for non-board crops. People like myself who are too far from the border to haul would still be able to haul to the local elevator and get the same price as some farmer living near Estevan.

Five, Western Canada produces a high-quality wheat that is in great demand. Having a single-desk seller allows it to extract the full value of that wheat from customers.

The fact is that the market for high-quality wheat is small and stagnant. About 75 to 80 percent of demand is for medium-quality, and this is the market that is growing, especially in Asia. The Wheat Board's concentration on hard red spring wheat has caused it to miss many opportunities, which meant that Western Canadian Farmers have suffered.

Canada is rapidly becoming an anomaly in the grain marketing world. The Australian Wheat Board has lost its monopoly over the sales of grain within Australia, yet it still handles 70 per cent of the grain. Negotiations are underway to take away its off-shore monopoly and transform it into a co-op. Just this month, the Ontario Wheat Marketing Board voted to allow farmers to sell their wheat outside of Ontario without restrictions. A former communist country, Ukraine, recently rescinded the requirement that farmers sell 10 per cent of their wheat to the government at below-market prices.

The argument over grain marketing has created dissension and uncertainty in the grain industry and set brother against brother, neighbour against neighbour. Bill C-4 has done nothing to address the controversy over grain marketing. In fact, it has increased it. It is time to end this divisiveness. I am asking you to amend the bill to allow farmers to opt out of the board. If the Wheat Board is any good, farmers will vote with their bushels to support it.

In closing, I would like you to think of this: Fifty-three years after Canadian soldiers came home from a war fought to free others, I have less freedom to market my grain than my grandfather did. It is time to end this aberration.

Mr. Cooper: Thank you, Mr. Chairman. As I pointed out, I am here representing our marketing club. We just met this morning and do every Thursday morning during the winter months.

In regard to Bill C-4 we have some major concerns. If you will just refer to my notes, I have listed the 10 commandments -- and I am not sure which church they belong to. First, an overall comment about the board's influence in the whole industry. It is important that we recognize that it is not only the selling of wheat and barley that is important but the influence they have over the whole grain industry in Western Canada; in fact, not just the grain industry but the feed grain industry, which influences livestock production and our value-added industries. It is important to look at Bill C-4 in that context. That is why my first point here is that assuming Bill C-4 will not be withdrawn or defeated, then the option that must be considered is to delay passage until after the Estey review is completed. The Estey review is going to look at the Canadian Wheat Board's involvement in grain transportation and handling, and other aspects. So it would be important to hold this bill off until that review is completed.

Now more specifically, I think the election of directors is really a flawed process insofar as a business-like approach to the operation of a $7 billion sales program. Directors should be chosen on the basis of their qualifications and not necessarily restricted to farmers, although I would certainly appreciate a majority of being farmers. We have to look at what they are qualified to do, because if we look at the way the elections have gone for the advisory committee, we do not seem to get much more than politicians. We should be expecting more than that.

Bill C-4 does nothing to ensure price and cost transparency or accountability to farmers. A voluntary board would achieve that goal. I think that is extremely important, transparency of price and our costs, which are influenced by the board.

Bill C-4 is not consistent with recent changes to the Ontario Wheat Board, which allows farmers direct access to export markets.

Bill C-4 does nothing to encourage a competitive, cost-efficient handling and transportation system from the farm to the vessel. An open U.S. border and Canadian Wheat Board taking possession F.O.B. the vessel would achieve that end.

The proposed contingency fund is a scary proposition which could be used to cover up marketing failures and most certainly will be cited as a trade irritant by our competitors.

Bill C-4 does nothing to achieve price transparency and arbitrage for either the feed grain user, the milling industry or the farmer.

The inclusion clause, as proposed in Bill C-4 sends a negative message to our trading partners and is really an insult to growers and marketers of crops such as canola, peas, oats, flax, mustard, lentils, and so on.

Bill C-4 does not address the failure of the pooling of prices, costs, storage space and rail car fleet to deliver the right kind of grain to the right destination in a timely manner. Timely deliveries can only be achieved by final price contracts that are based on the value of the commodity, the service and the asset investment.

Bill C-4 will not either encourage new investment or allow present investors to utilize their assets in a way that optimizes the returns to stakeholders.

I would now like to refer you to a couple of my charts because these -- when I mention the Wheat Board's influence in other aspects of the market, I would refer you just briefly to the one that says "U.S. Average Prices (Long-Term)", which shows the prices from 1976-77 to 1997-98, so there is a 20-year period. These are in U.S. dollars, but you will notice that only once here in the last 20 years, which was 1995-96, did that price get over $4 US for hard red spring wheat, and then it dropped back, of course, to where it is now. I do not want to spend a lot of time on that one because what I am coming to is some others on pricing and how this bill, Bill C-4, does not address it.

The next one I want to refer you to is the "U.S. Average Farm Prices," again in U.S. dollars. This is from January 1990 to September 1996, and it was in May 1996 that the prices for hard red spring wheat peaked. They kept going up, and they were up over $4 from about May 1995, peaking in May 1996. I then took those prices and looked at the 1995-96 crop year and the 1996-97 crop year, compared the U.S. average monthly price, and then averaged it out for the 12-month period and just based it on our crop year.

So if you look at this one here, which shows the average U.S. prices on a monthly basis, it shows the 1995-96 average farm gate price at $6.61 Canadian. For 1996-97 the average was $5.45 Canadian, using U.S. times 1.36, and I think it is now about 1.4, so I backed it up to what I thought it was about that time.

The Canadian Wheat Board final price for 13.5 protein wheat was $5.55 for 1995-96. I pointed out that the U.S. price was $6.61, a difference of $1.06, or $38.90 a tonne. In 1996-97, we received $4.36 from the board; the average U.S. farm gate price was $5.45, or $1.09 a bushel, or $40.00 a tonne.

So the time is here in terms of the opening of the U.S. border, which others have suggested; as well, the board taking possession at the port on the vessel is important in this context. We do not get a fair shake in terms of the world price. It is not just the board's selling price; the problem is a lot of in-between costs. You will notice that the Wheat Board carry-in for $95-96 to $96-97 was 3.5 million metric tonnes. I have never heard why, as a Canadian marketing agency, we continue to carry-in so much grain. In $96-97 into $97-98, there are 7.5 million metric tonnes of wheat, and this excluding durum, which is carried in, which is a quarter of our production, or more, carried in each year. Now why was that carried in when we had the highest price in 25 years or more?

If you convert that carry-in to some of those figures that I noted above, the $40 a tonne, you get a huge loss; it dwarfs the loss that the Wheat Board talks about in terms of the demurrage they paid of 65 million tonnes, and so on. I wanted to leave you with that one, just because of the lack of price transparency on arbitrage.

I wanted to refer you to another one which is again influenced by the board and other agencies, and that is the actual rail costs that we are presently subject to under this sort of communal system that we operate under. From our farm, we pay about $48-$50 a tonne in charges which are not subject to competitiveness in the market. I am referring to the freight charges, which are capped, the handling and drying charges, all of which are still regulated and the same for all companies. In all, it may even amount to $60 a tonne.

I took a look at some of the rates, and at present we have two systems operating in Canada. In Western Canada we have the regulated rate which is set, and the regulated allocation of cars and so on, which is not part of a competitive system. So if you are in a certain freight zone you will get a certain freight rate. I just checked that out, I phoned my friend, Norm Flaten of the Weyburn terminal on the way in here, whom Len knows very well. He indicated that they really cannot negotiate the freight rate, it is set. So a 100-car trainload of wheat to Minneapolis from the Weyburn terminal would be somewhere around $36-$37 a tonne. That is not negotiable. It does not matter whether it really costs that or whatever, that is what the Wheat Board works into their pooling system.

I looked at another group of shippers who can negotiate directly with the railways. At Watson, Saskatchewan, a canola gathering station, you will see on this page the rates there, and they ship a lot of canola directly to Velva, North Dakota, a distance of about 400 miles. The truck rate down there ranges around $37 to $40 a tonne. The rail rate that they negotiated for their own cars in '97, and it is at the top of the page -- it is for Archer Daniels Midland cars in this case -- is $12.35 a tonne for 100-car trains. C.P. charges $19.74 a tonne.

When farmers can negotiate their own rates, they do not have to go through Cap G., they do not have to worry about the Wheat Board's catchment areas, as they call them. There is an opportunity then to negotiate those rates. I was saying to Norm Flaten on the phone this morning, that if he were able to negotiate the rates from Weyburn to Minneapolis I am sure he could do far better than the rate you are getting charged, because that is only about a 700-mile trip.

So when you compare this, they are paying $36 or $38 a tonne, or whatever it is that they are caught with on hard red spring, compared to $19 a tonne for this 400-mile trip, using their cars.

I wanted to mention those because of the distortion that is created by having these numerous players involved in getting cars and getting them allocated, and the lack of transparency in the whole rate system and, therefore, in the net price to farmers.

I think the major players in the industry all want to see the board take possession on the vessel. I asked that question the other night at a meeting when the head of transportation for Saskatchewan Wheat Pool was there. He said they would definitely prefer that the board take possession on the vessel rather than even at port because the pooling of cars at the port is just as much of a dilemma as the pooling of grain back at the farm gate. We have to have a net price, total price at the farm gate, so we know when to sell and where to direct our grain.

My point here is mainly that the influence of the board <#0107> and to some extent the grain commission because they regulate some of the tariffs <#0107> is much broader than just the price of grain and so on. I do not think Bill C-4 really does anything to deal with that.

I thank you for your time and look forward to any questions.

Mr. Bryan: First of all, thanks for coming to hear what we have to say. I am going to take a more philosophical approach to this. I think if you get the philosophy right on some of these things, the economics takes care of itself.

I have five children and they have always had in their little library a copy of The Little Red Hen. Everybody knows the story: the Little Red Hen and her baby chicks grow a crop of wheat without anyone else's help and at the end of the story the Little Red Hen asserts her right of ownership to the loaves of bread that are the result of her labour. The story of the Little Red Hen has endured because parents seek to instil in their children the idea that productive work will yield the results of ownership.

The story of the Little Red Hen eloquently teaches us about the importance of ownership. A person who grows grain ought to be the one to decide to whom he will sell it. It is a very simple idea. Where before there was nothing, the grain that we grow is created with our time, expense and productive effort. This grain would not even exist without us and it is this fact that gives us the right to decide to whom we will sell it.

What is freedom? When we talk about Canada being a free country, is freedom some meaningless, overused abstraction or does it mean something tangible? Does it not mean the freedom to create, produce and own? Does it not mean a system of law that protects the Little Red Hens of the world from the cows, the pigs, the horses, and anyone else who would attempt to take the product of someone else's effort?

Is freedom not simply the protection of an individual and their property from the collective? Freedom is simply the legal protection of individual rights. One of these rights is property ownership. Without this legal protection for property there is no incentive for people to engage in the productive work that is necessary to sustain our lives.

Freedom and property ownership; these values are the very fabric of our society and are inherent whether or not our Canadian politicians decided to include them in the Charter of Rights and Freedoms. These values are what separates our society from the poverty and despotism of the Third World.

Children grow up. Was it any surprise that some of these prairie children would see themselves as Little Red Hens? I am one of these and I refused to let the Canadian Wheat Board take my grain. I chose instead to sell my grain across the border to someone other than the monopoly and, as a result, I was arrested. But strangely, when the handcuffs were snapped on and I was locked in the back of a police cruiser on the way to prison, it was psychologically, at least, a release. There was something clean and honest about it. There was no longer this pretence of freedom, the illusion of the Wheat Board monopoly as the farmer's marketing partner, the big lie. The naked truth is that behind the secrecy, the deception, the evasions, behind the mirage that has been so effectively and carefully crafted by the board's spin doctors is the cold, hard fact that the Canadian Wheat Board monopoly relies on force and coercion in order to take the Western Canadian farmers' grain.

The issues are freedom and property ownership. These are the essential rights that Bill C-4 violates and this is why it should be opposed.

I would caution you not to pay heed to other red-herring issues such as the inclusion clause, which I believe was made part of this bill so that opposition to it would be distracted away from the key issue of freedom and would, instead, coalesce to keep out this offensive inclusion clause. When the inclusion clause is ultimately taken out, it will be seen as a compromise on the part of the government and a victory for the side of free-grain marketers.

I would say that the inclusion clause is an insult to the intelligence of farmers except for the fact that so many, including the Coalition Against Bill C-4, have been taken in by this ruse.

If the final result of these hearings is to recommend that the Senate support this bill provided the inclusion clause is taken out and other minor tinkering, you will have simply played a part in an elaborate political sham and you will have lost an opportunity to contribute to the betterment of this industry and this country.

I would urge this committee to oppose Bill C-4 because it violates an individual's inherent right of property ownership and thereby violates one of the pillars of the free society which we ought to hold so dear. The remedy is to simply allow farmers the choice, to allow us to opt out of the Wheat Board monopoly.

Mr. Anderson: Dear members of the Senate Committee on Agriculture, I am speaking to you on behalf of all Canadian farmers who believe in the freedom of choice.

I would like to have the right to sell my wheat and barley to the Canadian Wheat Board or the right to opt out and sell it to whomever I choose. This to me and many other farmers is our essential right.

In Ontario, farmers will have the option of selling all their grain to the board or selling all their own grain exclusively to the export market. They will have an all-or-nothing choice to make every year.

In the prairie provinces we do not have this choice. There must not be discrepancies like this between the east and the west.

Bill C-4 does nothing to solve the grain marketing debate; it only gives an illusion of farmer-control. The directors and the CEO answer to their boss, the government.

The inclusion clause in Bill C-4 puts a cloud of uncertainty over all non-board crops. No one asked for this clause and most farm groups have spoken out against it.

The cheap food policy and the extremely poor returns from Wheat Board grain have devastated the Prairies, discouraging young farmers and driving them in hoards into other lines of work.

If the Canadian Wheat Board does continue, first of all, it must be voluntary. For those who wish to use the board the books must be open to the Auditor General. The Wheat Board must be held accountable. The cloud of secrecy around the Canadian Wheat Board must be unveiled. Remember, we the producers pay the Canadian Wheat Board employees' wages, yet they answer to no one. We the producers need the freedom to choose how we market our grain; this is a fundamental right.

Thank you for your time and please take this message back to Mr. Goodale: we need the right to choose; the Canadian Wheat Board monopoly must be broken.

I have a little P.S. here. When farmers were polled on dual marketing, 80 per cent of them wanted it. So Ralph Goodale asked them to vote only for the board or not for the board. That was not even a fair question.

Secondly, if the Wheat Board is getting the highest price why is the Prairie farmer getting the lowest price for the highest-quality grain? What happened to the money?

The Farmers Union has a big voice, Nettie Wiebe, but they speak for almost no farmers and definitely not for me.

As far as the oats, oat growers are happy with the present system. Oats have become a major crop, whereas when they were under the Canadian Wheat Board oats were almost forgotten. That is the point I wanted to make.

Mr. Bailey: I would like to thank the Senate committee for coming out. I would like you to know that I am not a grain broker, a trucker, and I do not own a grain company.

I am making this presentation on behalf of our family farm and seven other northwest Saskatchewan producers who started a letter-writing campaign. We did this by presenting farmers at auction sales, Grain Days meetings and at elevators with the opportunity of sending letters to the MPs and the Prime Minister. We networked thousands of letters to the Government of Canada, asking that the Canadian Wheat Board have more grains and oil seeds put under its jurisdiction and that the mandate of the Canadian Wheat Board be strengthened.

On average, 89 per cent of the farmers we approached signed these letters. The reason for the campaign is that we were tired of the news media presenting anti-Wheat Board propaganda that was false, and wanted to prove it for ourselves and others. We know that support for the Canadian Wheat Board is overwhelming from the response of the letters.

Referring to Bill C-4, if there is an exclusion clause or mechanism there must be an inclusion clause and mechanism. On March 19, 1997 the Federal Standing Committee on Agriculture and Agri-Food was asked for an inclusion clause in regards to Bill C-72 time and time again by presenters. There are tapes available of those hearings.

The Western Grain Marketing Panel was also constantly asked that more grains be put under the Canadian Wheat Board's jurisdiction, and they ignored it. That happened in March 1996 and it even happened in Edmonton.

The cash-buying clause undermines price pooling, and it therefore weakens the board. The reason is that if they go to a spot cash price, less grain will go through the pooling account and it therefore gives less chance of maximizing profits.

The contingency fund is really not acceptable the way it is because it increases costs to farmers and weakens the Canadian Wheat Board. Cash-strapped farmers will be reluctant to have more deductions taken off their cheques. We are already paying a full freight rate and now you want us to pay more. The government wants to get out of it and they need to be in there, with their price guarantees and their interim payments, and stay involved.

What is actually happening is that the grain trade is trying to push us to a completely open-market, deregulated system. This is being done through lobby groups in the guise of farm groups who get a lot of their funding from the Winnipeg Commodity Exchange and grain companies. Those grain companies would gain millions of dollars in revenue by marketing open-market grain.

Farm relatives in Minnesota inform me -- and I have seen it firsthand when I have been down there -- that they cannot get a proper return for their products in the open-market system. Supply and demand has been taken over in the equation and governed by the rumour mill. It is always unfriendly to farmers and it is harder to get a fair return from the marketplace. Rumours drive prices down faster than they drive them up.

I will give you an example of those rumours: the Mississippi flood of 1993 was reported by the U.S.D.A. and the commodity exchanges down there to not have affected yields for that year. In fact, it did affect the yields to the extent that farmers could have grossed a better return from the market if the rumours had not lowered prices.

In Canada, in 1993, the same year as that flood, 65 to 70 percent of canola in Canada was sold between the price of $5.85 and $6.35. We were told that rail car shortages were lowering the price. The grain trade also told us that the canola was in the bins and that they knew we were going to have to pay the bills, and they forced us into delivery.

The grain trade in Canada and the U.S. reported that Australia had a huge stockpile of wheat and barley and a fairly good canola crop in 1996-97. That was just another rumour to drive prices down in North America. There was no stockpile in Australia. Producers in Australia told my wife Gail and myself that if there is a large supply in Australia then both the grain bunkers and silos are full. Their silos were not full and the bunkers had nothing in them.

In 1997-98 here in Canada, the canola crop was reported to have a huge acreage, which it did, and a fairly large crop, but that was a rumour, too. The flowers were burnt off prematurely because of the heat, and we did not get the yield that we usually get. A pile of canola was marketed below $8 right from the combine.

In the past two weeks grain companies have also been telling us that they would shut their processing plants down if farmers did not keep delivering at that price; they were not going to let it go any higher.

I shall move now to price transparency and accountability. Remember that this was started by a lobby group funded by grain companies, the Winnipeg Commodity Exchange, and the railways, both CN and CP, by the way. All these parties want deregulation. Price transparency has only given the grain companies and the commodity exchange an insight into what is going on price-wise in the Canadian Wheat Board. This therefore gives the open market the advantage of knowing exactly what they do not -- and I repeat do not -- have to pay the farmer for his wheat or barley.

The 1991 open market in canola is an example of knowing the other side's prices. That was our first year of GRIP. Canola was seeded with a guarantee of $6.85 per bushel under GRIP. Hundreds of thousands of acres were seeded on stubble with mostly no fertilizer or chemicals used, which resulted in an average yield of six to seven bushels on much of that acreage. Therefore, supplies were down after harvest. Because GRIP was guaranteeing us $6.85 the grain trade did not let that price up. The average price for that year was $5.84 per bushel. Those prices were supplied by the Grain commission.

I am trying to show here that the Canadian Wheat Board needs discretionary pricing. We do not need the open market knowing what is going on within the Canadian Wheat Board. Just try to follow the paper trail within the Winnipeg Commodity Exchange and our own grain companies. You cannot do it.

I know one thing for sure, we are still on our family farm and have our bills paid because of the extra profits we get by marketing through the Canadian Wheat Board. Interim and final payments put extra profits in our operation so that we can continue farming.

In closing, for the most part Bill C-4 is not friendly to the Canadian Wheat Board. The inclusion clause strengthens the board, so an inclusion mechanism must be there, but it is not really friendly the way it is written up.

I cannot recommend cash buying and the contingency fund because they weaken and undermine the Canadian Wheat Board.

The news this week reported that because of federal government decisions and government bureaucrats that the Canadian fisheries have collapsed on the East Coast. I am afraid if you, as government officials, do not support and strengthen single-desk selling and price pooling with the Canadian Wheat Board, the farmers' return on investment will also collapse.

I leave you with this question: Will you, as government officials, force us into an unregulated, open-market system like the U.S. or Argentina, as a matter of fact, or will you help us retain a great marketing system, the Canadian Wheat Board, with its single-desk selling and price pooling leading us into the 21st century, with greater profits for the grain farmers of Canada collectively.

Take a look at Appendix I for deregulation. Look what has happened in Australia and Argentina.

I also would like to go on record in saying that I am an oat grower and that the Oat Growers Association does not represent me. I want oats back under the board. The last year that oats were under the Canadian Wheat Board with a final payment sold to the millers in Canada, I received $3.16 a bushel. I have not received that since oats have gone off the jurisdiction of the Canadian Wheat Board.

Senator Andreychuk: Mr. Bryan, I found your personal story rather poignant. You talk a lot about rights and you hope to be given the right to opt out. That is what you think a free and democratic country is about. I did not grow up reading The Little Red Hen but I did grow up knowing about rights. I also balanced it with responsibilities. If you had the right to opt out, what would your responsibility be to all these other farmers who feel that they have the right to continue to have the Wheat Board and a monopoly situation?

Mr. Bryan: That is simple. They have a right to market their grain in whatever manner they choose. I have no qualms with that whatsoever. What I am talking about is --

Senator Andreychuk: But what they are saying is that if you get your right, you destroy their right because, in essence, the monopoly will go.

Mr. Bryan: They have no right to what I produce. It is as simple as that. What I produce, I produce and I ought to have the right to control that. Nobody in our society has the right to somebody else's productive effort.

Senator Andreychuk: In most professional societies, you invest a lot to get where you are but you have a responsibility to listen to peer evaluation and criticism. Practising law or being a doctor is not an unfettered right. Are you saying that there is something unique about farming, that you get an unfettered right?

Mr. Bryan: No, farmers do not get such a right. In our society there are lots of examples of the state taking other people's property by force. I am saying that that is wrong and this is simply one more example. This is a very stark example of when the collective wants to enforce its will upon an individual. It is certainly not unique in Canadian society but I am just saying that it is wrong. Maybe on the road to making our society more free we can start here and make it better step by step. This is one good place to start.

Another point I would like to make is that this is not an example of farmers whining for subsidies. I am very much against any kind of agricultural subsidy. I want to be independent and to not be a burden on the Canadian taxpayer. I simply want the right to market my grain.

Senator Andreychuk: We have been hearing both sides of the argument. Both seem to have a very good case, but they are not compatible. Do you think the choice should be squarely in the hands of Parliament or, as I believe, if Bill C-4 passes, that the debate will come around the elected members of the Wheat Board? Where do you think the debate is better handled, given that the sides are so polarized?

Mr. Bryan: This issue is probably more a legal question than a political one. But we will take relief wherever we can get it. In answer to your question, I believe that nobody has the right to vote away my right to market my grain. I do not care if 99 per cent of farmers want a Canadian Wheat Board monopoly. They can calmly market their grain in a voluntary system and, in fact, this might be what happens if the Wheat Board does its job efficiently. Farmers will line up and market through them, and that is fine. The fact is nobody ought to be able to vote away my right to market my grain.

Senator Andreychuk: If there was an option for you to opt out, would you guess that there would be a significant number of farmers in Saskatchewan that would leave the Wheat Board?

Mr. Bryan: Yes, there would, simply because of the price discrepancy. The board has had a monopoly for 55 years and in that time -- I am guessing this and there are no figures to prove it -- like any bureaucracy it has become inefficient. This issue has come to a head now because the freight rate subsidy was making the prices in the U.S. and Canada quite compatible. So we were all quite happy when we were getting a dollar-a-bushel subsidy courtesy of the Canadian taxpayer.

Now there is quite a difference in those prices. There is a difference of at least a dollar a bushel. I think that unless the board becomes efficient -- maybe it could, I do not know -- a significant number of farmers would opt out.

Senator Andreychuk: This will be my final point. If, in fact, you had the option to opt out, which would put all the responsibility on you to market your own grain, and the Wheat Board became efficient, would you then use it as one of your options?

Mr. Bryan: I would assume that a voluntary board would make farmers contract their production for a period of five years, ten years, or a lifetime. The voluntary Wheat Board would have rules for participation, and perhaps that is valid, for perhaps they have to know precisely how much grain they must market. Apparently the Ontario Wheat Board is going to make guys opt in or out on a yearly basis. Maybe that would work, I do not know. That would be up to them.

If I opt out I will choose to opt out at my own peril if I cannot market my grain properly.

Senator Sparrow: To some degree it is a philosophical argument, is it not, where the freedom aspect comes into play?

Mr. Bryan: Certainly, it is.

Senator Sparrow: You are indicating, as maybe all of the speakers here today, that you want the provision to opt out. Whatever some may decide, you will opt out for a lifetime, or five years or two years. You are prepared to accept that?

Mr. Bryan: Yes, I am.

Senator Sparrow: So the board can go on as it pleases after that. You do not care about it, basically?

Mr. Bryan: You are right.

Senator Sparrow:You indicated, I think, to the last questioner that there might be quite a number who would leave, and certainly by our hearings you are not alone in that aspect.

You are talking about not dual marketing; you are talking about opting out?

Mr. Bryan: Yes. I mean all we want is a chance. It would be up to the Canadian Wheat Board in its wisdom to determine if they will allow people to market through them, if they have the chance to opt out. It can cut us out for whatever period of time it wants. It is up to the board of directors of the Canadian Wheat Board.

Senator Sparrow: We do have laws of expropriation and basically the Wheat Board has that right. Your only defence is not to sell anything, right? If you sell it becomes expropriation?

Mr. Bryan: Apparently, yes, that is the case. The Wheat Board has the right to expropriate farmers' property, yes.

Senator Sparrow: Mr. Bailey, you made a reference that 80-some per cent of a group, I think, stated that they wanted more grains put under the Wheat Board?

Mr. Bailey: No, that is not what I said. I said that 89 per cent of the farmers that we approached at these meetings signed the letters. There were two types of letters: one stated that they wanted more grains and oil seeds to be under the jurisdiction of the Wheat Board; and the other stated they wanted a stronger mandate.

Senator Sparrow: The evidence that we have been receiving in most instances, if not all, indicate that representatives of those particular crops do not want them under the Canadian Wheat Board. The Canola Growers Association is an example.

Mr. Bailey: No, it is farmers in general. We just walked into a meeting or we went to an auction sale. We had no idea what the marketing ideas of these people are. We wanted to prove to ourselves and others that the support for the board was there. The people could sign either one of the letters, not both, whichever one they felt more comfortable with.

Senator Taylor: Mr. Cooper, you mentioned that you are worrying about this Eastern-dominated committee. Six of the eight senators that are sitting here are from the west and some of them much farther west than where you live.

Mr. Cooper: Could I comment on that one? I included in my brief the brief I prepared for the standing committee on agriculture. So sorry about that. I should have clarified it.

Senator Taylor: You did some very good, interesting work here. In comparing U.S. average farm prices and Canadian, you focused on hard red spring and durum. My understanding is that in the U.S. they get a 70 cents or a dollar-a-bushel export enhancement in those particular grains. In other words, that is a subsidy. Has that been taken into consideration?

Mr. Cooper: I think you will find that they have not used the export enhancement on wheat for some years.

Senator Taylor: That is not true. We will go on, but I think you would be wise to check your facts on that.

Mr. Cooper: I think you should check that.

Mr. Bailey: There has been no export enhancement for two or three years.

Senator Taylor: We will both check it. A number of people today have mentioned the Australian Wheat Board. What I have here, dated January 30, 1998, states that the Australian Wheat Board still has single-desk monopoly for export grains. They have dual marketing only within the country, not for export grains. The Wheat Board over there also handles oats, sorghum, canola, cotton seed, triticale and pulse.

Mr. Cooper: They have turned the Australian one into a cooperative, I gather. I think there is even a vote coming up.

Senator Taylor: I think the other thing over there that would drive our farmers crazy is the fact that the Australian Wheat Board owns flour mills in Vietnam and shipping lines. They are into many other businesses.

Mr. Cooper: I think they could do it here. If you turned them into a new generation co-op they could do the same thing.

Senator Taylor: You brought up one other statement and I am just curious because I do not know. You mentioned that 6.6 billion dollars was owed by the off-shore creditors to the government. Now my understanding is that the Wheat Board has never lost this money over the last 40 or 50 years, that this money is an operational type of debt that is always out there, that gets paid and rolls on again. Do you know anything about that?

Mr. Cooper: If they had to account for it, which right now they do not, then as I point out, Finance Minister Paul Martin would be somewhat concerned because the Government of Canada would have to pay it. The other interesting thing is that we thought, as farmers, we had sold that wheat. But we really had not because nobody paid for it. If we had had to account for it then there would be a serious decrease in the value, a further decrease from what it is.

This is not a totally philosophical argument.

The Chairman: Senator Taylor, I asked the question in the Senate. I got an answer two weeks later. I asked the leader of the Senate and was told that the moneys owing in debt to the Canadian government is 6.6 billion dollars, and that is paid for by the government not the farmers. That is what is owing at this time.

Senator Taylor: The last question is for Mr. Bailey. Could you explain to me why cash buying hurts pooling? If, indeed, cash buying is done at a profit, is that profit in the Wheat Board going to go back in your final payment to all the farmers that did not cash sell? I am not quite sure.

Mr. Bailey: No, it does not. The way it is set up now, as I understand it, the people that want to be involved with a spot price get to deliver. It undermines the price pooling because less grain goes through that pooling account, then.If somehow the cash buyers, or the people that want to sell to the cash market, had to put some money into the pooling account from the sales that are made through the cash buying then it would enhance the pooling account. But the way it is set up, as far as I understand, none of that grain will go through that pooling account and it therefore diminishes the pooling account.

Senator Sparrow: It would be a lost sale.

Senator Taylor: I do not think so. I beg to differ.

Mr. Bailey: I think it would be. That is my understanding of it.

Senator Taylor: My understanding is it becomes the property, or it comes into the Wheat Board when it is sold. It might be in the pool, it might not be, but they are not going to lose money on it.

The Chairman: I will make one more comment. The SARM of Saskatchewan appeared before the Senate committee. They compared a 1,100-acre farm in North Dakota and a 1,100-acre farm in Saskatchewan. You can get this brief from them. It showed that an 1,100-acre farm of durum and wheat in North Dakota produced a net income of $40,000 more for the American than for the Canadian. You can get that comparison from the SARM of Saskatchewan.

Mr. Cooper: That pretty well confirms my numbers here; it is a difference of a buck an acre.

Senator Whelan: First of all, I want to make a comment about what Senator Taylor said about those Eastern -- how do you say it, fatherless people?

I would challenge you to find anything that this easterner ever did as a member or as your minister that treated one part of the nation differently. I acted as a Canadian minister, as a Canadian M.P., which most M.P.s do regardless of what party they represent. I just wanted to clarify that.

Also I want to ask each one of you, are you involved in the grain, trucking or chemical business? No? Okay, that makes me feel better.

Mr. Larson, you talked about your grandfather. No doubt your grandfather was one of the ones who demanded the Wheat Board.

Mr. Larson: No, he lived very frugally. He made sure that he had enough cash to carry him through the harvest season and in January, when it was 40 below and no one else had the gumption to get out the horses and head 22 miles to Hanley, he did.

Senator Whelan: A lot of them must have the gumption or they would not have all survived like they did, do you not think? Even if they were Wheat Board members they had to do the same thing.

Mr. Larson: There is a difference between surviving and prospering.

Senator Whelan: I know it very well. I was raised with a widowed mother with nine kids, during the dirty depression. I know how I survived and I know what I was able to accomplish in my life, too. We all had hardships to go through, but that did not mean that we forgot about the other neighbours. We would not have survived during the depression if we had not shared and worked together. We had no money, we had nothing. We had no medicare. That is why I wear those damned technology things we call hearing aids, that type of thing.

Mr. Cooper, what do you mean by communal system?

Mr. Cooper: That is what it is. We throw all these rail cars into a communal system and then they get sorted out through bureaucracy. There are $90,000 cars rolling around -- or sitting still around -- the country, and nobody gives a damn.

Let me give you an example. I took two loads of barley to northeast terminal, hauled it when it was minus 35 degrees C on January 15. Those cars got into Thunder Bay by the 21st. They sat there loaded in storage, to the account of Canada Malt. I got a little angry about March 6 and phoned the Wheat Board. I said, "You must be interested in these cars because you own cars and have to pay us for the malt barley and so on." They said, "No, we are not interested at all until it is unloaded." Nobody cared.

Senator Whelan: You call it a communal system, then, when you send a trainload down to Minneapolis or some place?

Mr. Cooper: Yes, I do.

Senator Whelan: Those cars go back to Saskatchewan by way of New Orleans, or some place like that.

Mr. Cooper: Those cars are still in the communal system and nobody gives a damn. That is the problem.

Senator Whelan: Even the Americans do not care? They like to use them too.

Mr. Cooper: That is right. If the owners took real ownership of property and took interest in what they own, a $90,000 car is pretty important. But nobody really gives a damn, you see. That is what is communal.

We have many things in this communal system, including the freight rate, drying and handling charges. All of those are part of that communal system which will not work and will never attract the right grain to the right port at the right time. That is where the problem is.

The Chairman: Mr. Bailey wanted to respond to that.

Mr. Bailey: I have three points to make in talking about grain cars. It seems that he is pointing out that it is board barley.

In 1996-97 in Saskatchewan a great proportion of the oats were shipped out, much of from Hamlin. The oats were left on the cars down there until they were cleaned and dried.

Somebody mentioned new generation co-ops, and felt that that is what we should go to, that that is the answer. They have gone to that in the United States. A lot of those new generation co-ops have gone under because they have gone to a deregulated system down there, especially the rail system.

The rail system has gone to a bid system and all the big players bid on the cars. They bid it high enough that when the new generation co-ops want those cars they have to pay an extra $400 to $600 to the big players -- the Archer Daniels Midlands and the Cargills -- to get those cars.

There was grain rotting on the ground down there at that particular time. This information was in a 1995 report which is in the University of Saskatchewan library.

The Ontario Wheat Board has also come up and everybody is saying they are going so everybody can opt out. That is not really correct. The highest percentage of their wheat is marketed to their local millers and it has to be marketed through the Ontario Wheat Board. The farmers still cannot, the way I understand it, sell it direct to those millers. The highest percentage of their wheat goes to their own local people.

The Canadian Wheat Board's greatest market, and ours as farmers, is in exports. That is why the Canadian Wheat Board has to maintain that monopoly, just like the Ontario Board has to maintain the monopoly, because their greatest sales are to their millers.

Senator Whelan: The Ontario Wheat Board was mentioned. I was one of its founding directors and we created it because of the unfair marketing system.

You talk about the free market system, Mr. Bryan. Now you have a monopolistic system in the flour and milling industry when one company, Archer, Daniels Midland, controls 80 per cent of the flour milling industry in Canada, east and west. In Windsor they have a great big elevator that is built on the Detroit River right next to the big oil seed crushing plant. The soybean board had negotiating powers in Ontario; I do not know why they took that away from them. I am told by members of the soybean board that Archer Daniels Midland said, "We do not have to even talk to you any more." There is only one elevator on the Great Lakes left in Canadian hands, in government hands, and that is near Cornwall, Ontario. So they are worried about where they are going to go or whether they are going to have any independence.

I am going to finish here. When we talk about a communal system do we talk about our schools, our churches, our roads, our fire system, where we all contribute to that? I am a little bit shocked when you say that you do not want more subsidies. Those are all subsidized, I think. Are you suggesting we go to toll roads, that type of thing? Are you suggesting that there be no more research subsidies? We developed all these grain varieties, the lentils, the canolas, the pulses, through 100 per cent government-financed research. Our universities are probably one of the highest subsidized things in the whole land. Are you suggesting we cut that out and that only those who can afford it go to school?

Maybe I am misinterpreting what the senator from Saskatchewan said. I gather she had some reservations that we have created a new philosophy, a new society that does not really care about anybody else but ourselves.

Senator Andreychuk: Oh, no. Senator Whelan, you can speak for yourself. Please do not speak for me. I did not say that there are people creating a new society. I wanted these witnesses to speak about their definition of responsibility, nothing more, nothing less.

Mr. Cooper: Well I guess I zeroed in on this communal system. Our problem is that the Wheat Board is a little too much like a church. I have no problem with it being a church or being a school. I have no problem either with having government involvement. You know that because we met many times when I was in the canola industry. When you were there, you did a good job of getting us grass status for canola in the U.S. Remember when they had stopped our canola going in there? You did a good job.

I have been one of the strongest supporters of research and government research. I cannot understand why they would be cutting back.

But when it comes to grain marketing, we really do not need the government. We need them in research. As they used to say, research is all GATT green and WTO green, and nobody objects to government research. But I certainly do not think we require it in grain marketing.

The Chairman: I want to thank you gentlemen for appearing, and for the time each of you has put into your briefs.

Would our next witnesses please introduce themselves and tell us where you farm?

Mr. Allan Moorman: Mr. Chairman, according to my document I farm in the Humboldt area, but it is actually Muenster, a small community just east of there. I operate a mixed grain farm and hog enterprise, about 1,200 cultivated acres, and I produce about 1,000 hogs per year.

Mr. William Rudolph: My wife and I run a 3,200-acre mixed farm in the dark brown soils of the Cypress bench, in southwest Saskatchewan, about 210 miles from here.

The Chairman: In the hills?

Mr. Rudolph: In the hills. It is flat up top, though.

Ms Vicki Dutton: We farm at Paynton, which is about two hours on the Yellowhead from here. We also run a special crop processing and seed plant at North Battleford, called "Western Grain."

Mr. Con Johnson: I am from Bracken, Saskatchewan, which is in the extreme southwest portion of the province.

Mr. Walter Nisbett, Canadian Registered Organic Marketing Cooperative: Mr. Chairman, I have a crop farm just north of Swift Current. With me is Mr. Ray DeMong from Cudworth. There was a mix-up in identification. I will be making a presentation on behalf of the Canadian Registered Organic Marketing Cooperative.

The Chairman: Mr. Johnson, are you also a farmer?

Mr. Johnson: Yes, I am.

The Chairman: Thank you. We will begin with your testimonies, please.

Mr. Moorman: Mr. Chairman, ladies and gentlemen, I would like to thank you for the opportunity to make this presentation today. I will keep my remarks fairly brief. I basically have two points of contention.

I am in favour of a strong central selling agency such as the Wheat Board.

As an individual producer I produce a product that the world needs for food. I need others to develop these markets for me, however, to show the world what we have to offer, to get the product to the buyers, and to have the expertise needed to deal with billions of dollars of business.

I also want the security of knowing that I am sharing the risks with my fellow farmers. I cannot afford to develop these markets myself, nor do I have the expertise to do so. The Canadian Wheat Board does this for pennies a bushel and I share the highs and the lows. I prefer this to the uncertainties of the continuous fluctuations of the open-market price, where I rarely get the highs and usually get the low end. I need to sell grain to live and to pay my bills.

I hear many people talking about marketing their own grain. What they really mean is that they are doing price discovery, not marketing. Price discovery means shopping around for prices and then hauling the grain to a facility. Marketing means getting the product to the end user, and this is exactly what the Wheat Board does for me, and it does it very well.

We need to make sure our decisions are based on fact, not on conjecture and hype. Many groups have talked about the U.S. markets, and the lack of access to them. It is, however, only one market, and it would soon saturate and close if the borders were wide open. The CWB markets to about 70 countries, and moves 25 to 30 million tonnes of grain per year. This cannot be moved to the U.S. alone. My point is that we must keep everything in perspective while the debate goes on.

With regards to Bill C-4, I strongly support the concept of the inclusion clause. In fact, I believe it to be the cornerstone of any change. The option of both inclusion as well as exclusion is fundamental to democracy. I believe these to be fair and balanced clauses. Grains can be taken away from the Wheat Board, and they can be added to it. The power will lie with the farmers, who will ultimately make the decisions with their votes. That is how it should be -- it should not be done on the whim of a political body or of a commercial lobby group.

At the most recent SARM convention two weeks ago in Regina, the convention had a resolution presented to it to remove the inclusion clause from Bill C-4. This resolution was soundly defeated.

I also support the inclusion clause because no one can predict the future. With rapidly changing technology and biotechnology, new grains and varieties could come along that need the board's expertise. Further, population explosions in the Asian-Pacific region might lead to a need for a very high-yielding grain; that would require the marketing expertise of the CWB. Other organizations would not to be used if the inclusion of grains under the board were not possible. There is no need to reinvent the wheel.

I also believe that the majority should rule. As we live in a democratic country, we ought to believe in the laws of the land. I think that laws should be upheld.

Bill C-4 has one other major flaw, in that the president/CEO is not appointed by the board, although he or she sits on the board. A major concern, therefore, is that he or she is not accountable to the board. I do, however think it goes a long way in modernizing the board -- making it farmer-friendly while retaining the benefits of the federal guarantee on initial payments and credit.

Once again, I would like to thank you for the opportunity to present my thoughts. I want to reiterate that the inclusion clause is both necessary and fair to all. Let us decide, as farmers, what should or should not be under the Wheat Board.

The Chairman: Thank you. We will go to Mr. Rudolph.

Mr. Rudolph: Thank you. I was busy helping a cow that badly wanted to be a mother last night, so I am not as well-organized as I would like to be this morning. What I am going to do is give you the same blast that I gave the committee that reviewed the Wheat Board mandate way back <#0107> what is it, a century ago? It seems like it. About four years ago, I think. That is what you have in front of you printed out. On top of that, I have a few comments to make after I am done. The comments that I made in that brief are just as valid today as they were four years ago. Nothing has changed.

There is no rational economic argument against the market power to be gained by a large central selling agency. This concept has been well-documented by any reputable first-year university economics text. The market power of monopolies and oligopolies is accepted in even the most conservative of schools of economics throughout the Western World.

The need for this power, theory shows us, becomes even stronger when one considers that the world export grain trade is dominated by six or seven very large international grain traders, in order to offset their own oligopolistic power in the marketplaces. To quote the chief executive officer of one large international grain company, "our competitors are our friends, our customers are our enemies". That was said at an annual meeting. I will not tell you who, but it was in the press.

It is easily documented that the majority of Western Canada's grain production must continue to be exported. Even converting this production to beef at eight to one, or pork at five to one, it does not take a rocket scientist to see that we simply do not have the population locally to consume this production.

The recent changes to the way that the railways are paid to transport grain may well shift some more grain or grain land into livestock production, but I, personally, do not believe it will be as great as a lot of pundits have made out. We only have to look south of our border to see that the dependency on exports is still a reality, and this is with a much larger indigenous population than we have. I rather suspect that the biggest shift will be to higher-value, low-volume crops. This could well be a negative factor on livestock production in my area.

Consider this scenario -- I presently grow malting barley, and much of it is exported either as malt or in grain form. The malt product is not a lot less bulky to transport than grain, because, relative to durum, hard red spring wheat, and canola, malt barley yields about 50 to 100 per cent more than these other crops in pounds, or bushels. It is clear that the increase in freight rate paid by me will have a greater effect on the cost-per-acre for production of this crop relative to others.

Therefore, being a logical entrepreneur, I will be less likely to grow malt barley and many other farmers will make this same move. How does this impact livestock production, you ask? Consider this, when you plant malting varieties you know that in any given year your production may not make malt and, if that happens, then this product is substituted into the next available market, this being the feed barley market. With less malt barley being planted there will be, on average, in any given year, less feed barley available for sale. Thus fewer livestock can be fed.

It could be argued that this situation will shift production to higher-yielding feed varieties, but it has been my experience that these varieties produce only marginally better in my area than do malt varieties. In fact, one of the most popular feed varieties presently grown in my area is an old malt variety no longer acceptable to maltsters. Clearly, in my case the shift will be to high-value crops such as canola or durum wheat.

My production will obviously continue to be largely exported. My presence in the world market is insignificant. I am, therefore, powerless. However, Western Canada's export share of world wheat markets amounts to about 20 per cent of world export trade, and it is higher in durum wheat. This is a significant market share, and it represents significant market power to be seized. Any lessening of this power by reducing the number of farmers using the board, or by moving to the fuzzy concept of dual marketing being proposed by some small but vociferous interest groups will hurt the majority of Western Canadian farmers presently using the CWB. Are we all, as a group, to be hurt to satisfy the few? I think not.

Society has always organized itself in ways that slightly restrict the freedom of some individuals to do as they please, so as to protect society as a whole. Consider our speed laws, laws prohibiting assault or homicide, and many of our present laws governing conduct of business. We are not anarchists. I am as freedom loving as the next person but I do not think that I should be allowed to drive unfettered down the public highway at 150 miles an hour just because my 1982 GMC diesel half-ton may be capable of it. Freedom and ecstasy for one may mean fear and anxiety or actual physical and economic harm for others. This concept is as easily applied to grain marketing as to any other aspect of societal organization.

Let us now look further at the fuzzy concept of a dual market. Given that allowing these people to sell outside the board will hurt the rest of us, what is the benefit for them? The proponents of outside selling argue that they will be able to capture higher prices for themselves. Again, facts would seem to argue otherwise. It has been well documented that in open-market grains -- occasionally, much to my own personal chagrin, on grain that I have to market on the open market -- two-thirds of farmers sell in the bottom third of the market. These are usually those with the least economic power.

I was raised on stories of the bad old days before central selling, when the small poor farmer was forced to sell his grain in the fall while his big rich neighbours held on for higher prices, usually till spring. The pooling concept has mitigated this considerably. It has also allowed us, as farmers, to concentrate on production instead of looking over our shoulders to see what our neighbours are doing. This has allowed producers to develop the technology that today makes us some of the lowest-cost, most-competitive grain producers in the world. Again, we all benefit.

It is my own personal opinion that most of these open-market proponents are either sadly deluded or extremely conceited if they believe, in the long run, that they will be any better off without a central selling desk.

I would suggest, if the monopoly of the CWB is ever successfully overturned, that they make it very plain that there will be no jumping back and forth. I would suggest some form of rolling contract for at least a five-year duration. For example, you must apply to get out at least five years ahead of time and you must apply to get in at least five years ahead of time. You cannot have the best of both worlds at the expense of the rest of us.

The Chairman: Mr. Rudolph, you have gone seven minutes now. How much longer is your --

Mr. Rudolph: It is quite long. I would ask you all to read it over. I have just a couple of comments on the bill itself.

The Chairman: If you would, please.

Mr. Rudolph: The minister has been given a clear mandate by the results of the plebiscite, and I wish we would get on with it. Election of directors must proceed forthwith. It is absolutely inconceivable that farmers should not have a direct say in how their grain is, and will be, marketed. The inclusion and exclusion clause must remain; let people who grow the stuff decide how and if they want to market it. It is very likely that rye growers would like to organize a pool for their crop, they have been agitating for it for years. The open-market people, they did not want it. The commodity exchange booted them out.

Appointment of the CEO and a minority of board members. I have a comment on that. I really have no problem with that as long as the government continues to provide some sort of guarantee to the board.

Even if we were to get out of the government appointments, I think that there would still be an advantage to the appointment, by board members, of experts. It brings in industry expertise and, as long as they do not constitute a majority of the board members, I do not have any problem with that because the majority of the board members will still answer to the people who elected them.

The wording of the legislation, as I understand it, is not very clear on how the selection of the CEO would be made. It says that it is to be done in consultation with the elected board members. I would prefer to see that very simply put; we will give you a short list, you give us a yes or no on that short list of who you would like.

That is the only real improvement I would like to see over the way Bill C-4 is presently constituted. The rest of it I can live with. We must get the CWB clear of any government meddling, and I think that having an elected board of directors is the way to do that. The time for debate is over. The time for consultation is over. It is time to pass Bill C-4.

The Chairman: Thank you, Mr. Rudolph. Now we will go to Vicki Dutton.

Ms Dutton: I should have said where I am from. I am from Herbie Sparrow's country.

Senator Sparrow: Am I ever glad about that.

Ms Dutton: In our area he is thought of as one of the most productive senators. We are proud of him.

I would just like to answer your question, Senator Andreychuk. Production of grain is a business, it is not a social policy. It has been a social policy in Canada for many years. But my contribution, then, as a business, as a farmer, is as a taxpayer. If I make more profits then I contribute as a taxpayer.

I think I would like to frame my presentation under that policy, that grain is a business, it is not a social policy and, as a producer, it is my business, it is my livelihood. The more I am able to contribute, or to collect as revenue, the better I survive. Further, the more I collect, the more I am going to contribute as a taxpayer, providing a better economic base for my family, for my province and for my country, as well. In the process, we will be feeding the world.

I believe that the issue here is choice. The issue is who gets to decide about my grain. That is as philosophical as I am going to get.

I have essentially focused by comments on the bill, because I believe that this bill will eventually become legislation. I will now refer to my presentation.

First of all, I believe that the inclusion clause is something that we can add as a democratic board after, and that it need not be in here. I believe, if there is an inclusion clause, that there must also be an exclusion clause.

The challenge, basically, of Bill C-4 is to marry two philosophies. It is to provide a bill that both sides, both the free-marketers and the people who support central marketing, are comfortable with.

It is extremely difficult in the farm industry. For those of you who have not followed economic statistics, in 1998 the projected net farm income is going to fall to 300 million dollars. In 1974 that was 1.4 billion. This is not a healthy industry. There are a lot of unsatisfied farmers out here on both sides who are feeling that we are unable to capture enough revenue from our business. It is definitely a problem.

My main concern here is the question of governance, however, because I believe that, unless we get this right, unless we determine a process whereby we can, as farmers from opposing sides, feel confident that Bill C-4 represents us, we will never have satisfaction. If we do not get it right, there will not be enough gaols in Western Canada to hold us all.

One would assume, if we are electing candidates to the board, that they would be responsible and capable individuals. Therefore, I would question the need to have appointed federal people on this board. I would push for a fully democratic board for Western Canadian growers, similar to what the Ontario producers have.

I would ask Eugene, if he may comment, why the Ontario growers would not have gone under the CWB if they felt that federal control was the way to go.

I feel that having members appointed by the federal, paternal government, is an insult to my intelligence as a farmer.

When I review this bill I cannot imagine that the process of nomination would have some satisfactory guarantee. That is, if you feel appointment is the way to go, regardless of their abilities, I do not see how these appointed members of the board would reflect the concerns of our industry, nor how they would be satisfactory to the elected members.The only compromise, the only way to do this, is to have a board elected by farmers which would, therefore, have the credibility and the confidence of growers.

I think that there is a double standard in Canada; the Ontario growers just recently voted, and it was passed 90 per cent for them to opt out. We cannot even vote. I cannot even decide.

As we get more information out of the CWB we are actually finding that there is, indeed, a myth involved in the Canadian Wheat Board. I have provided a graph at the end of my presentation which actually shows that, between 1943 and 1953, the Wheat Board dramatically undersold western grain to the world markets. There is a chart there. For those of you who are sceptics and may not believe it, it is reality.

The Canadian Wheat Board implemented federal policy by providing western grain, at huge discounts, through England to the world market. It was a sale applied only to growers in Western Canada under the jurisdiction of the CWB. Growers in other parts of Canada were excluded.

Therefore the myth is dispelled. In the difficult economic climate of grain production in Western Canada today, this process of CWB reform must be valid to be credible. Your challenge is to take this home and to make it credible, because it currently is not.

Since 1943 the Canadian Wheat Board has been unaccountable to the farmers, or even to the Auditor General of Canada. If I am compelled by law to sell certain commodities through the CWB, it should, at the very least, have to open the books on all past and present agreements.

Let us go forward in this process knowing that, amongst the general farm public, there is an issue of confidence surrounding the Canadian Wheat Board. In these meetings you have doubtless heard both sides of this highly polarized debate: those who love the CWB and who want everything, including sliced bread, under it, and those who want none of their commodities touched by the central marketing agent. Both of these sides must come to have some sense of confidence in this new institution.

If this process does not restore confidence, then I repeat, there will not be enough gaols in Western Canada to hold us all.

The concept of appointed directors is an insult to the credibility of the board. The double standard which Western Canadian farmers have faced since, compliments of the federal government, they subsidized England, is no longer tolerable.

Western farmers have been expected to adapt to the Crow rate very quickly. I believe that it is time for the federal government to adapt to the changing reality and to finally give the peasants of Western Canada full democracy.

If I were a farmer in Ontario I would not be appearing before a Senate committee to beg for my democratic freedom; I would have simply voted. That vote passed, incidentally, and farmers in Ontario may opt out of the monopoly in 1999.

The Chairman: Thank you. Next is Mr. Johnson.

Mr. Johnson: I would like to apologize for the typing on my brief. Like Mr. Rudolph, I was helping a cow last night, and when I got back to the computer my daughter's new program would type and print, but there are no paragraphs or topics.

I would like to thank the Senate committee for being here. I am a meat-and-potatoes guy, and that is what my brief is.

We are here today to discuss Bill C-4. It is probably the most hated piece of legislation dealing with agriculture ever presented in Canada. It is also the most needless piece of legislation.

Several years ago, then Agriculture Minister Goodale hand-picked a panel that was supposed to deal with the industry and all of our problems. The panel contained people from both sides of the monopoly debate, and from all political stripes. They did something, though, that Mr. Goodale never dreamt possible -- they came up with a unanimous list of recommendations. Some of those recommendations were not on Mr. Goodale's agenda and they were discarded.

Talking with some of the panel members later, I learned that Mr. Goodale never asked them the reasons for their decisions, nor were they thanked for the job that they did, nor were they officially released from their job on the panel.

If the minister had had the courage to follow the advice of his own panel we would not be here today. Now he tells all that Bill C-4 will put control of the CWB in the hands of Western Canadian farmers. In fact, Bill C-4 does exactly the opposite. It entrenches even more power in the minister's office. When farmers cannot hire or fire the CEO and five of the directors, we have no chance of ever invoking change other than the change that the minister deems fit.

Under the act, the vote process would be not of economics, but of ideology. Farmers will vote for candidates because of their ideologies, and not because of their abilities. Divide and conquer will be Mr. Goodale's strategy in gaining more control over the board. As in the last advisor election, it will be strictly a status-quo-versus-change theme. Mr. Bean and Donald Duck could have run on the status quo ticket in the last advisory board election and won hands down.

The geography of the core of monopoly supporters is well-documented. Farmers in the north that do better under the pooling system seem to favour the monopoly more than southern farmers.

The biggest injustice with Bill C-4 is that it does not allow for the same type of representative voting that created it. As Mr. Goodale's fellow Liberal MPs from Ontario support him on Bill C-4, they allowed him to get the bill this far. As the basic unit in a political election is voters, the more voters, the more MPs they can elect. Because of the large number of people in Ontario, they can elect more MPs than the prairie provinces. It was from this number that Mr. Goodale drew his support for Bill C-4.

The basic unit in an agricultural economic election is an acre or a hectare. The more dependent you are on your farm for survival, the more say you should have in how the economics of agriculture affect your farm. Is it fair that a half-section farmer with a job in the city should cancel my vote? It is not now and it never will be. The election vote should be based on a seeded-acreage basis. End of discussion.

Every farmer is supposed to get one period of record prices in their lifetime. That period just came and went, and farmers in the designated area never knew it was even here. With simple production contracts and futures contracts we could have sold three crops within the 18 months of high prices and captured some of those premiums, if we had been allowed to do so. The CWB chose not to sell a lot of wheat during that time and, as usual, Western Canadian farmers paid the price.

Mr. Goodale would have us believe that he wants to put control of the board in the hands of farmers. At the same time, however, his government is spending millions and millions of dollars to prosecute farmers who engaged in what amounted to simple forms of civil disobedience. For hauling small amounts of grain across the border they received huge fines and, in some cases, gaol. For hauling five bags of barley worth roughly $20 across the border, and for all the charges that I received after that incident, they were asking for a maximum of $155,000 in fines and 18 months in gaol. Am I to believe that this same minister wants to put control of the Wheat Board back in farmers' hands?

There are many reasons why Bill C-4 should be scrapped, not the least of which is the fact that the bill is written in the interests of the government rather than of farmers. Others would include the CWB's lack of accountability to farmers, exemption from the Access to Information Act, and exemption from oversight by the Auditor General.

History judges politicians. Mr. Goodale will be judged as the most harmful politician agriculture ever encountered in Western Canada. I hope that you will be remembered as the Senate that puts Bill C-4 where it belongs; in the garbage.

I would just like to make a couple more points on some topics that were talked about.

In the last presentation it was brought up that, when oats were taken off the board, the price dramatically dropped. If any of you were to go to the CWB and get the statement of accounts for the oat pool in that year, you would see that they ran up a $36 million deficit. The initial price was kept artificially high, so that when it was taken off the board it returned to market level. The price did not drop, the taxpayers of Canada had it propped up.

Mr. Rudolph said that we who think we can market better on our own are deluded or conceited. I do not know which one I am, but in the Alberta Barley Growers Charter challenge, where I was one of the witnesses, I sat in Federal Court and testified that, with the 1992 feed wheat dump into the States, the CWB cost my farm at least $100, 000, and continued to do so every year until I went to court. We had that documented and, under cross-examination, it was never touched. They left it alone because they knew I was right.

In every court case since then, when price performance is brought up, CWB lawyers say "the Canadian Wheat Board has no duty of care to farmers". No duty of care. Their job is to sell grain, not to achieve the highest price.

Senator Sparrow: We will mark Mr. Johnson "doubtful."

The Chairman: Mr. Nisbett.

Mr. Nisbett: The Canadian Registered Organic Producers Marketing Cooperative Ltd., CROP, appreciates the opportunity to present our views on Bill C-4, to amend the Canadian Wheat Board Act.

As our name indicates, we are in the business of marketing organic products, mainly wheat, durum, rye, oats and flax. We are staunch supporters of the Canadian Wheat Board system of single-desk selling, price pooling, and government financial guarantees. We want to see the Canadian Wheat Board strengthened in these areas, and will support amendments that will support these principles.

The Canadian Wheat Board presently provides a reasonably equitable treatment of all producers in the area to obtain the best possible price with equal opportunity of delivery and government guarantees on borrowing and credit sales.

As organic producers, we have organized as a cooperative to market our grain. This is only a temporary situation. We support the Wheat Board marketing of our organic grain. We also plan price pooling of non-board grains for our members. We strongly support the Wheat Board, hence our attendance here today.

Bill C-4, as approved by the House of Commons is a calamity, a disaster waiting to happen. We would like to outline some of the problems we see with this bill.

Having a board of directors partly elected by farmers assumes that all candidates would be farmers and, once elected, they would be able to control the board. The proposed regulations do not specify that being an active farmer is a requirement to be a candidate for election. There is a good chance that people of many diverse opinions would be elected, and a stalemate would result.

The five appointed directors are appointed at the pleasure of the minister. They would acton behalf of the minister first and foremost, and second on behalf of the farmer. This may cause friction on the board. Farmer-control of the board is an illusion, the Governor in Council has the final control.

A corporate plan will be submitted annually for the approval of the minister. We have nothing against a plan, however, farmer-control of the board is an illusion. The minister, the Minster of Finance, and the Governor in Council have the final control.

Cash purchases and terminating pool accounts at any time less than a crop year erodes the equity among producers. Let me explain. In a down market, a producer might want to get a cash price, expecting the price would be lower later on in the year.

Cash purchases and guarantees for the increase in the initial payment seem to be the main reason for establishing the contingency fund. If these items were not in the choices available to the board operation, there would be no need for a contingency fund. The minister says that it is premature to speculate that the contingency fund would be generated through some form of a producer deduction. However, where else will the fund come from?

The Crow rate was terminated; the Crow benefit was eliminated. Grain transportation rates are continuing to increase year by year, and now there is going to be a contingency fund.

It is our contention that, for the Wheat Board to be effective, all the wheat should come under the control of the Wheat Board. The monopoly power thus created will bring the best return for the farmer. This means no dual marketing. The minister has said, and we agree, that dual marketing will not work.

We believe that the Wheat Board must have the power to regulate the transport of grain to market or seaboard position. Adequate transportation facilities must also be available. These areas are lacking in the bill.

A new inclusion in this bill has been to provide a method to include grains other than wheat and barley. This procedure is complicated, and it may be unworkable. Inclusion of other grains could be made more democratic by providing for a vote of producers after a petition from a certain number of producers would trigger such a vote.

We have concern about losing the Crown agency status of the Wheat Board, as the Wheat Board would become a mixed enterprise. The financial guarantee provided by government that is written into this bill does not include any increase to the initial payment that was set at the start of the pooling period, as is the case at present. This withdrawal of support can only be taken as a start for the further erosion of the guarantee in the future.

If this bill were to be amended, we would make the following suggestions:Upon petition of a certain size, a vote be taken to include or exclude grain under the Wheat Board. We be allowed a vote to include our organic grain sales under the board. Hedging, cash buying and pool periods shorter than one year should not be included. That there be full government guarantee, as at present and, hence, no need for a contingency fund.We would also suggest that, when all board members are elected by the farmers, they be appointed by the minister to run the board, thus retaining Crown agency status. The CEO should still be appointed by the minister.

If there is a failure to make changes along these lines, we would recommend that the bill be scrapped and rewritten.

Senator Eugene Whelan (Deputy Chairman) in the Chair.

The Deputy Chairman: We only have about 15 minutes to go because many of the members have to catch planes.

Senator Sparrow: Ms Vicki Dutton made a firm proposal respecting the election of all of the board members. That is the strongest representation we have had in that regard. I cannot help but feel we should carefully consider that proposal. After all, what is half democracy?We have throughout the country, and certainly in Western Canada, very effective credit unions, cooperatives, that elect their directors who become very effective and do what I would consider to be a good job in many cases. I, for one, want to carefully consider the proposal that all of the board members be elected. It would then be a true producer-representative agency.

I would ask a question on opting out of our witnesses. Would there be much objection to the individual farmer opting out? I think that dual marketing is not a feasible aspect of the Wheat Board. However, I think that opting out could be feasible for those people who want that independence. It would also give us an opportunity to make some comparisons of the two systems.

I appreciate Vicki's remark about the gaols not being big enough to hold all the people who end up in prison. Mr. Dave Bryan, who was here this morning, went to gaol on a matter of principle -- the freedom of the individual within the marketing system.

What are your views on opting-out?

Ms Dutton: Thank you, I appreciate your comments and the fact that you will seriously consider the election process. I believe it is an issue of credibility and that, for this to function effectively, there must be a confidence level amongst growers that this body is working for the growers who choose to be part of that process.

I also believe there must be an option for those who do not want to be part of that process. As you probably noticed, there is no crossing of those ideologies. There is no halfway point. I think growers would be prepared to make that choice, be it for a lifetime or be it for a certain period of time. I would encourage you to accommodate both sides of this debate. For this bill to be effective, you must.

Senator Andreychuk: I think you misunderstood me. I am not talking about social policy. We gave up farming as a way of life when I was growing up. I was talking about responsibility to an industry or a business.

If you have a fully-elected board, but we are unable to convince Parliament that there should be an amendment to the bill to include an opting out clause, do you think that the Wheat Board, through its directors, would accomplish what you want, that is, the right to opt out?

Ms Dutton: Of course, that comes down to the democratic process of everybody voting. I believe that, at some point in time, yes, it will. There has been a rapid decrease in the farming community population. The majority of the farmers who remain, are accumulating more of the land and those are probably the people who are agitating most for the change. However, I don't think we have time to mess around with the political process. I think that decision has to be made now. If you leave it to the democratic process, it will come in time, but there will be a lot of unhappy campers in the meantime. The issue is one of time. This is not, I repeat, a healthy industry. Take a look at the numbers.

Senator Taylor: I would like to explore the question of opting out. That is, having the ability to take advantage of a niche market without going through the board. Mr. Rudolph touched on this. In effect, he suggested streamlining the buy-back process, so that a person, spotting a market, could buy-back at not too exorbitant a cost. You suggest that the Wheat Board is exacting too high a price from those who want to buy-back.

Do you have any solid suggestions as to how that could be done in a reasonable way, a way which would not hurt the pooling process and those who form that group?

Mr. Rudolph: That is a devil of a problem, is it not? If enough people opt out, we may as well not have a wheat board. That is the problem that has been brought up time and again by opponents of having any sort of opting out ability, whether it is through the mechanism you suggested or a farmer simply saying that he is no longer going to market his grain through the board.

If enough people do that, then your opportunity to seize market power as the marketer of 20 per cent of the world's export grain, wheat -- more in the case of durum -- is going to be mitigated. One guy does not matter, and ten guys opting out probably does not matter very much, but at 250 guys, it will start to matter.

My suggestion is, if there is a genuine advantage to moving my grain directly off my farm into a South Dakota flour mill or durum plant or whatever, I should have the opportunity to do so. I do not think the present structure is cognizant enough of that possibility. Part of it relates to the game we are playing in trying to average the freight rates -- that it should cost the same, based on distance. It is probably cheaper probably to haul further miles to Thunder Bay than it is to haul to Vancouver. However, Thunder Bay is not an ocean port.

We have done some tinkering with the system in that changes have been made in the gathering areas for durum and barley, so that the basis back-off is different at different points in the south from what it was previously. I do not think we have gone far enough with that. I think it needs further fine-tuning.

If the buy-back situation were set up in such a way so that it was monitored by elected board people who would recognize when a farmer has got a good deal and they would let him go for it, I do not see a lot of problem with that.

Senator Taylor: Some people have suggested it would be more democratic to do as the Wheat Pool has done, and that is to elect a delegate who, in turn, selects your representative on the board, rather than holding a direct election. The idea is to get around campaigning or, perhaps, Cargill slipping one of the candidates the advertising fee to get more exposure. They thought that might stop it.

Have you thought about the system of electing directors?

Ms Dutton: I think there was a general level of dissatisfaction at the producer level with the delegate system in the Saskatchewan Wheat Pool. I know there was certainly a level of discontent at the grower level that, perhaps, the delegates were not representing them. I think direct democracy would be my choice.

On the issue of opting out, it is my understanding -- and you probably know this better than I do -- that 20 per cent of the grain that is marketed is actually sold to the major grain companies.

Senator Sparrow: By the Wheat Board?

Ms Dutton: Yes.

Senator Sparrow: Yes.

Ms Dutton: If we were to opt out, obviously the grain that was being opted out could well be directed to the major grain companies and the board could maintain the 80 per cent of the sales in that direction.

Senator Taylor: I have just returned from Iran, which is now our biggest buyer of middle grade. They do not buy the top grade.

The fact is that the board is able to control 20 per cent -- and in durum it even more than that, 24 per cent -- of the world grain. Even Saudi Arabia does not have 20 per cent of the world oil that is moved through OPEC. The Wheat Board has almost OPEC-type control. To break the market it would only need to manipulate 10 per cent or 15 per cent of its grains. I do not think most people realize just what a tremendous OPEC-type of force we have.

When we, as senators, visit the U.S., the first thing that happens is that we are approached by an American senator who tell us that we have to get rid of the Wheat Board because in demands too high a price. They say that it is highway robbery. Then, when we return home, someone comes up to us and tells us that the Wheat Board is screwing things up. It just depends which side of the border you are on.

The Deputy Chairman: I have a question for the panel members generally. Are any of you in the grain business, the trucking business, or the brokerage business?

Ms Dutton: To a small degree, yes. We purchase peas and lentils from growers through our company, Western Grain.

The Deputy Chairman: Mr. Johnson, did you want to make a brief comment?

Mr. Johnson: I would just like to comment on the buy-backs going into South Dakota flour mills and North Dakota durum plants. Why in the world do we fight with the Americans about shipping durum into North Dakota and bringing about 80 per cent of that back as finished products? Why are there no durum plants here in Saskatchewan, or in Manitoba or Alberta? Why are there no flour mills here? You always hear rumours. There is this ghost plant in Swift Current, "SaskaPasta." There has been talk of that for about 100 years. Until there are simple production contracts with growers to provide a certain number of bushels at a set price any plant will never open. We export, export, and export. Let us keep the grains and the jobs here. It is a lot easier to ship finished product than it is raw materials.

Ms Dutton: I would certainly encourage the panel to look at the value-added in special crops. There is upcoming value-added in oats. We are seeing plants spring up across the west. I would also like you to consider how many value-added facilities we have for our largest commodity, which is wheat.

The Deputy Chairman: We constantly hear about the marketing opportunities in the United States. Today we heard about the Ontario Wheat Producers' Marketing Board and how restrictive that program may be. However, that has not been settled yet either. Many growers have no idea what their board is doing because nobody pays attention to them.

If we got rid of the Canadian Wheat Board and everybody decided to market their product in the United States, all hell would break loose because the Americans are not free-traders, never were, and never will be.

The committee adjourned.