Thank you very much, Mr. Ritz.
Good afternoon to everyone on the committee and those who are attending. I thank you for this opportunity to appear before the committee on an issue that is so vital to western Canadian farmers.
I want to begin this afternoon by stating the Government of Saskatchewan's position on the Canadian Wheat Board. We believe that the loss of the single desk and the supposed implementation of a voluntary marketing system would result in serious financial loss for western Canadian grain producers. We also believe it would effectively eliminate the Canadian Wheat Board as a major Canadian marketer in the international marketplace and reduce the overall competitiveness of the western Canadian grain industry from a producer perspective.
The current debate related to the CWB has been framed by this federal Conservative government as an issue of choice. According to the federal government, they are bound by their electoral commitment to enable farmers to participate voluntarily in the CWB. They continue to voice this position even though farmers who voted for the Conservative government did so for a host of reasons, and many have indicated they did not vote to have the Wheat Board dissolved or changed in this manner. In fact, most Conservative MPs in Saskatchewan had a very low profile on this issue during the last election campaign.
I too would like to talk about choice, but unlike the federal government, my vision of choice sees western farmers choosing for themselves the best way to market their wheat, durum, and barley, options that include the right to market collectively by retaining the board's single-desk authority--a right that, by the way, is enshrined in the CWB Act.
But first, for any informed choice you need access to information, information that the federal government has been slow or outright reluctant to provide. This afternoon I would like to pose a number of questions. These are questions that I would encourage producers and this committee to consider as they engage in the debate over the future of the CWB.
Question one, does the CWB achieve premiums in the marketplace by effectively branding and marketing western Canadian wheat, durum, and barley? Saskatchewan believes the evidence shows the CWB does. So do a number of prominent academics whose independent studies have confirmed that the CWB is able to achieve premiums for producers through branding. In essence, the CWB gives western farmers market power.
The federal government has been encouraging farmers to move up the value chain and to focus more on products and less on commodities. Given the emphasis that the federal government has placed on the value of branding Canadian agriculture products, it is totally inconsistent that they would now be attempting to eliminate the CWB, an entity that has proven itself to be effective in achieving premiums for producers through branding.
To my second question, can the CWB remain in place as an effective marketer without any infrastructure if it has to compete with private grain companies to market western Canadian wheat, durum, and barley? Saskatchewan believes it cannot. An agency without ownership of infrastructure such as grain-handling facilities would be dependent on, and at the mercy of, current grain handler companies, companies that would become their competitors. Realistically, what incentive would these competitors have to do business with the CWB? Yet without the cooperation of its competitors, the CWB cannot function, as it has almost no resources to establish a physical presence both on the Prairies and at a port position. Given that the Canadian Wheat Board currently has no physical assets of any consequence, how could it expect to acquire them and expect to acquire the necessary capital base to truly be a player in this large industry?
“The Canadian Wheat Board Transition Project”, the study prepared for Alberta Agriculture, Food and Rural Development by JRG Consulting Group and released in June 2006, essentially states that the CWB would not be effective in a dual-market environment. That's on page 24 of their report.
My third question asks why the current government is so opposed to the CWB. Is their position simply based on a philosophical or ideological position, or is their position based on objective information showing that farmers would be better off without a CWB? The information that I am aware of from independent academic studies clearly demonstrates that CWB provides value to western producers. For example, estimates of the single-desk premium obtained for western Canadian milling wheat ranged between $10.49 per tonne--the Gray study of 2001--to $13.35 per tonne, from Kraft, Furtan, and Tyrchniewicz in 1996.
Where is the objective and unbiased information from the federal government to support their position that the CWB disadvantages western producers? Why doesn't the federal government share this information, if it has it, with producers, so that they can make up their own minds?
If there is no objective information and if the federal position is primarily based on ideology, I must ask--where will this federal government stop in carrying out its philosophic mandate? If the CWB is currently being targeted, can it be long before this government takes a similar approach with supply-managed industries?
Question four, should the federal government be able to circumvent the Canadian Wheat Board Act, which calls for a producer plebiscite on major changes to the board's fundamental powers? The CWB Act must be respected both in spirit and in law. Why are western wheat, durum, and barley growers being denied a say in accordance with the act in how the CWB is operated? Why is the federal government so reluctant to go to a vote with a clear, honest, and honourable question? Is it because they know that the majority of western producers favour the CWB?
The federal government has continued to use questionable tactics in how it deals with the CWB. This fall the federal government appointed a so-called marketing choice producer to the CWB board of directors. This is a clear break with tradition, as producers have always run for one of the 10 elected board positions that are specifically set aside for producers. The five appointed seats are to be filled by non-producers, who bring specific skills--valuable skills--to the CWB board.
This is a clear attempt by the federal government, albeit by the back door, to shift the balance at the board table. This is both undemocratic and inappropriate, but it shows the lengths the federal government is willing to go to in undermining the CWB. We've seen it on other fronts, including interfering with an election in the middle of the electoral process and the placing of the gag order on the CWB by the federal government. It flies in the face of the need for informed debate.
If the CWB ceased to exist, who would speak for western farmers on grain handling and transportation issues? According to the CWB, the board's involvement in grain delivery, handling, and transportation saves producers over $150 million annually. Who would capture these benefits in a multi-seller environment? Would it still be the producers--or more likely, would it be the grain companies or the railroads?
Question six, who stands to gain the most from the elimination of the CWB single desk? The U.S. has launched 11 separate trade challenges against the CWB in an attempt to get rid of the CWB's monopoly. Each time they have failed. The very fact that the U.S. is so desperate to get rid of the CWB should tell us something. It should tell us that the CWB is able to achieve real benefits for Canadian producers.
Question seven, what will be the impact of the loss of the CWB on producer inland terminals, short-line railways, and producer cars?
The presence of the CWB in the western grain-handling and transportation system provides a level playing field for the smaller producer-owned interests in the industry. Producer-owned, non-aligned inland terminals are able to ship for export because of policies established by the CWB. Without the CWB, many of these terminals would become uncompetitive. Because they do not have port terminal space, they would lose their independence to the integrated grain handlers or they would be squeezed out of business.
It is no coincidence that over 95% of the producer cars shipped contain Wheat Board grains. The committee may wish to ask why it is either too difficult or of questionable value to ship non-board grains by producer car. Producer investments in short-line railways and inland terminals have helped to bolster producer returns, and I want to point out that it is not just producer investment--communities have invested in producer car loading facilities, and communities have invested in independent inland terminals. They stand to suffer significant loss.
What will the removal of the CWB do to the viability of these producer and rural community initiatives? It is Saskatchewan's position that we need a good solid single-desk Canadian Wheat Board because it is an effective marketer of grain. It gives our producers power in the global marketplace and within our domestic grain-handling and transportation system, and it maximizes the return to producers--not to shareholders of a company but to primary producers.
However, it is also our Saskatchewan position that it should be farmers who decide the future of the CWB, not the current federal government. I ask you, the Standing Committee on Agriculture and Agri-Food, to respect the wishes of the farmers, to respect the legislation that governs the Canadian Wheat Board--not to try to go around it, but to call for a producer vote on the future of this agency, and to call for that with a clear, honest, and honourable plebiscite question. Let farmers decide what's best for them.
This concludes my comments. I thank you very much for granting me the opportunity to come and speak on behalf of the people of Saskatchewan today.
Thank you.