A government bill to end the Canadian Wheat Board’s grain monopoly cleared another stage in the House of Commons on Monday, as Ottawa races to make the most important change to the Prairie grain industry since the Second World War.
The Conservative government’s bill passed second reading, surviving NDP and Liberal motions to halt it, and now moves to a Commons committee for review.
The bill would end the CWB’s monopoly as of August 2012 on marketing Western Canada’s wheat and barley for milling or export, allowing farmers to sell those crops to any buyer.
Read Also
China rapeseed meal futures see largest one-day gain in almost three months after Xi–Carney talks
China’s most active Zhengzhou rapeseed (canola) meal futures posted their largest daily gain in nearly three months on Monday, after Canadian Prime Minister Mark Carney and Chinese President Xi Jinping met in South Korea last week without securing a breakthrough on tariffs.
It still requires a third and final reading by legislators and the government expects the bill to become law by the end of 2011.
Political debate has focused more on defending democracy than the intricacies of grain marketing, reflecting deep divisions among farmers themselves.
The government argues that farmers should not be forced to sell their crops through the CWB, while the board points out that 62 per cent of farmers voted to retain the wheat monopoly in its non-binding summer ballot.
Wheat board supporters have said dismantling the monopoly will result in foreign interests taking control of Canada’s wheat production, which usually ranks No. 6 in the world.
“Shareholder value”
“Private companies will no doubt try to gather up the wheat board’s $6 billion in annual sales to enhance shareholder value for their owners, not for farmers,” opposition Liberal legislator Ralph Goodale, a former CWB minister, said in the House of Commons.
“Why does the government think farmers are better off with all key decisions about Canadian grain being made (on grain futures exchanges) in Minneapolis, Chicago or Kansas City?”
The government’s backers, however, say ending the world’s last major agricultural monopoly is long overdue.
“The one thing I can guarantee is if we accept the status quo, that’s exactly what will happen, a doomsday scenario,” said Agriculture Minister Gerry Ritz. “Western Canadian farmers… will now have the ability to choose who they market through.”
Canada is the world’s largest exporter of spring wheat, durum and malting barley.
The Conservative government, which holds a majority of seats in the House of Commons, moved last week to limit debate on the bill, saying it needs to pass as soon as possible to allow the grain industry time to adjust.
Private grain companies including Viterra, Cargill and Richardson Pioneer will be able to sign forward contracts with farmers as soon as the legislation receives final approval for grain crops they will harvest next autumn.
The legislation also faces at least one court challenge from a pro-CWB group that says the government is acting illegally by ending the monopoly without holding a farmer plebiscite.
