The committee is examining what measures are restricting competition in Canadian agriculture and limiting our competitiveness. The most obvious and harmful barrier to the competition is the imposition of the Canadian Wheat Board monopoly by the Parliament of Canada on western Canadian farmers. As mentioned, wheat acreage in western Canada has declined by 12 million acres, or more than 30%, over the past 20 years. In contrast, wheat acreage in Ontario has increased by more than 60% since the Ontario Wheat Board monopoly ended six years ago. The contrast is quite stark. Maintain a closed market, acres go down; introduce a free market, acres go up.
The captivity of western Canadian farmers to the CWB monopoly means we have no escape valve. For other crops, the ability to ship grain directly to processers and to export markets keeps Canadian grain-handling costs in check. That is not the case in wheat and barley.
The CWB monopoly is a significant impediment to value-added processing on the Prairies. Less than 5% of the wheat produced on the Prairies is processed for food markets. In contrast, approximately 40% of our canola is processed, and with the recent new builds and expansion, this proportion is expected to reach 50%.
Growing oats is another shining example of how farmers can flourish and compete more effectively under an open market. Since the removal of oats from the CWB monopoly in 1989, oat acreage has increased by approximately 25% on the Prairies. We've also seen a dramatic rise in oat processing on the Prairies. Can-Oat Milling, with plants in Saskatoon, Portage La Prairie, and Barrhead, is now the world's largest industrial supplier of oat products.
Canada is a net importer of pasta products even though we are by far the world's largest producer of durum wheat. Quite simply, companies are reluctant to invest in those areas where they are captive to one supplier. As long as the CWB monopoly remains in place, there will be little investment in new milling or malting capacity. In 2005, one of the malting companies built a new $75 million malting plant in Montana, bypassing the better malt barley regions in Canada. The $75 million should have been invested in western Canada. It's a malting plant that prairie farmers are unable to access directly.
We believe reducing regulatory barriers, including the Wheat Board monopoly, would also lead to much greater private sector investment in wheat research. As it stands now, private seed developers are reluctant to invest in wheat research in Canada, given the high degree of uncertainty over whether a new variety will be accepted by the CWB. A 2007 survey undertaken by the Canadian Seed Trade Association found that 74% of all private seed research and development was devoted to canola, followed by corn and soybeans. Less than 5% was devoted to wheat research, even though it represents the largest crop in Canada in terms of acreage. Making the CWB voluntary would go a long way to attracting greater private research in wheat breeding and development.