Saturday, December 31, 2011

CWB: farmers should sue for damages

By John W. Warnock
The Leader-Post 
December 31, 2011

Agriculture Minister Gerry Ritz "Law? What law?"
The Harper government has quickly pushed through legislation abolishing the Canadian Wheat Board (CWB) single desk. This was done without a vote from the Prairie farmers who delivered their wheat, durum and barley to the board. A referendum was required in the previous legislation.

During the recent debate over this action, many asked if it would be possible for a future Canadian government to re-establish the CWB single desk. Could it pass legislation that would allow grain farmers to decide the issue? The consensus response seems to have been "yes," but under Chapter 11 of the North American Free Trade Agreement (NAFTA) the government would likely have to pay compensation to agribusiness corporations for any loss of income. That could be substantial.

It should be remembered that the U.S. government, U.S. farm organizations and agribusiness interests all opposed the CWB and its system of a central selling desk. They knew that it gave our Prairie grain farmers an advantage. Through collective action, the CWB was able to deliver higher returns for farmers as a group. With a good, reliable grading system, and a well respected Canadian brand, the board produced benefits for those who purchased the crop as well as those selling.

Farmers and their organizations began pushing for single-desk marketing boards during the First World War. The wheat board created by the federal government at that time had a monopoly on sales and set a minimum price. When it was abandoned in 1920, grain prices fell.

Pressure for marketing boards increased during the Great Depression and R. B. Bennett's Conservative government created the CWB and passed legislation making it possible for other farmers to create marketing boards on the provincial level. Farmers established many marketing boards and consider them to have been positive developments. Through the pooling system marketing boards are able to average the return from all markets, easy and tough, sell all the crop, and share the return among participating farmers on an equitable basis. Many farmers are too busy and do not have time to do an adequate job finding markets for their products.

We know from historical data that farmers are the weakest point in the corporate food chain, from the farm supply industry through food processing, wholesaling and retailing. The share of the consumer's dollar that goes to the farmer has been steadily shrinking over the years. We can see the results of that in our rural communities.

So there is every reason to believe that when the CWB single desk is finally abolished, and farmers compete against each other, the average price and return to farmers will decline. There are always farmers who think they can do better marketing their own crops. They want to capture the good markets. But who will sell to Iraq, Egypt and Iran?

When farmers and their families heavily invest in growing a food product covered by a marketing board they are party to a legal contract. Thus, when the marketing board is taken away by the government, and not by the democratic vote of the producers, there is a contract broken and a theft of property. If agribusiness firms can claim damages for loss of income if the CWB is re-established, then certainly farmers have a similar claim for a loss of income when their legislated marketing agency is taken away from them without their consent.

It seems to me that Prairie grain farmers should begin to put together a class action suit for damages against the Harper government.

Warnock is retired from teaching political economy and sociology at the University of Regina and is author of The Politics of Hunger: The Global Food System. He and his family were also farmers who delivered their crops to a marketing board with a central selling desk.

1 comment:

  1. I cannot understand the mentality of farmers who think they can compete as individuals with the grain giants. Why would Canada do away with anything that Americans hate so much. Americans are not stupid. If they don't like it because it is not good for their side, then it must be good for our side.