Proceedings of the Standing Senate Committee on Agriculture and
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
Senator Leonard J. Gustafson (Chairman) in the Chair.
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
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
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
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
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
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
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
The Chairman: Only farms or do you represent other cooperatives or retail
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
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
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
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
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
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
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
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
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
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.
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?
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
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
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
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
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
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
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
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
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
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
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
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
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,
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
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
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
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
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
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
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
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
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
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
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
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
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
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
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
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
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
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 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
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
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
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
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
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
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
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
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
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
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
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
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
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
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,
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
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
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
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
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
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
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
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
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
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
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
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
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
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
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
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
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
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
I would just like to make a couple more points on some topics that were talked
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
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
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
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
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
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
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
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
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
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
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
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
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.