Evidence of meeting #23 for Agriculture and Agri-Food in the 39th Parliament, 1st session. (The original version is on Parliament’s site, as are the minutes.) The winning word was board.
A recording is available from Parliament.
Professional Agrologist, As an Individual
I would concur with the other two speakers. In the interest of time, I will pass it on to my colleagues from Quebec.
I would like to say that I've been receiving letters from producers suggesting that they want to see other grains included under the Canadian Wheat Board. For example, the prices of pea crops and canola are very low in comparison to what they feel they could get under a regulated market.
First Vice-President, Fédération des producteurs de cultures commerciales du Québec
Yes. For wheat, certainly in Quebec, we try to have a certain quality for a value-added market. We try to get as much as possible for the farmer.
Another thing is that we are near the American boundary. I know we are supposed to talk about the Wheat Board, but I am also talking about income. We open an ethanol plant, but the farmer won't get any more for the corn than is the distance from the boundary. The buyer might just as well buy American corn. When you are farther away, then you have the transportation charge to add. When you're next to an American boundary, the farm bill really puts the prices down, even if we do as much value-added as we want.
President, National Farmers Union
Yes, I have a tiny point in response to the last question. The committee might want to invite the Canadian National Millers Association to appear. They're probably already on your list, but they would be good people to talk to on this issue.
Conservative
The Chair Conservative Gerry Ritz
We'll make a note of that. Thank you.
Thank you, ladies and gentlemen, for your presentations today. I am sorry for the rush. We are condensed on both ends.
We do have another hour coming right up, so I will have the next presenters come up as quickly as you can.
We will suspend the meeting at this point, and we will get right back.
Conservative
The Chair Conservative Gerry Ritz
I call the committee back to order.
Thank you for presenting for us today, ladies and gentlemen. Since you've been here, you know we're running a little bit late, so I will be concise in holding you down to ten minutes on your presentations. Welcome.
Jeff, you and Doug have ten minutes if you'd care to make a presentation.
Jeff Nielsen President, Western Barley Growers Association
Thank you for inviting us to this committee. I'm very happy to be here.
Firstly, I would like to make a few comments. I am a grain and oilseed producer at Olds, Alberta. I'm also an elected farmer director of Agricore United. We're very proud of the fact that Agricore United is a farmer-elected company run by farmers. Our farmer membership gives us a lot of feedback on policy issues and how the Canadian grain industry as a whole should be operated. So I'm very proud of the fact that I'm a director of Agricore United, but I'm here today as president of the Western Barley Growers Association.
Firstly, I'd like to give you a brief overview of barley production and where it's marketed, what does not work currently, and what will benefit both the producer and the end user once choice marketing is achieved.
In order to successfully exploit monopoly power, the monopolist must be able to control supply. With barley and wheat, that clearly is not the case. That is why the Canadian Wheat Board, in its current form, fails the barley and the wheat producer and the value-added sector.
Barley production is put into two categories: feed and malt production. Of all the barley grown on the prairies—on average, 12 million acres—75% is seeded as a malt variety. Only 25% of that is selected as malt. Of the total barley production, which is anywhere from 11 million to 13 million metric tonnes, 80% of that is used for feed, whether it be for beef or hog production.
Marketing options to producers of malt are restricted to the Canadian Wheat Board. For beef producers, we can use the open market or the domestic system or sell it to the Canadian Wheat Board for export.
As mentioned above, 75% of all the barley grown is a malt variety. Why? Current breeding programs favour malt over feed, as it is perceived to have more value in it. Some breeding work is being done on feed varieties, but not as much. Some breeding that may be beneficial to hog production is being done, notably as a low-phytate feedstock.
Currently, cattle feeders do not pay incentives for protein or dryness when it comes to barley. If they live close enough to that feedlot, they do pay a premium maybe for plumpness, as they desire that. That's why most varieties of malt barley are currently very plump. That's what the feeders want.
Canadian Wheat Board programs for barley are viewed widely as the market of last choice, last resort. The Canadian Wheat Board is not active in exporting feed barley, as world markets are being filled by lower-cost production from the former Soviet Union and other countries. Canadian producers are forced to sell malt via the Canadian Wheat Board, resulting in a masking of price signals, which not only frustrates producers but affects the end users as well. Transparencies in the marketing of malt through the Canadian Wheat Board are non-existent, resulting in a lack of information, price signals, and marketing opportunities for both the producer and the maltsters.
This is highly evident in a total lack of investment in value-added infrastructure in western Canada. Two malting facilities were recently built in the United States, rather than here where the barley is. The malting industry has globalized, and the brewing industry has begun that process. Investment decisions are not made on a regional, but on a global basis. With that, Canada is not viewed as an attractive location for investment.
The Canadian malting industry came close to total collapse in the fall of 2003. Due to a drought in the west, barley production was severely limited. Price rallies and opportunities for producers to sell at record high prices to the feeding industry almost cut off all supplies to our maltsters. Due to the Canadian Wheat Board restrictions, the maltsters were not able to attract their required stocks, as they could not offer a price that would get the barley away from the feeding industry. The Canadian Wheat Board lack of immediate response shorted the malt supply.
There is quality out there. We all know that. Yet producers sold that quality malt as feed because that was where the dollar was. This resulted in huge shipments of offshore barley imported just to facilitate our malting industry making their contractual commitments to their users.
Clearly, the Canadian Wheat Board system is highly restrictive to our value-added malt sector. Our maltsters have stated that the price of malt is not the issue. They are willing to pay more to access malting barley with the desired attributes. But the lack of the ability of maltsters to get a contract directly with producers restricts their ability to identify varieties they need. They could offer pricing incentives for the agronomic abilities of the producers, and ultimately incentives could be paid back to the producer for the product that the end user wants.
Price pooling by the Canadian Wheat Board and the length of time it takes to increase prices to producers impede access to malting barley. Therefore, Canadian brewers will now use non-North American malt to produce both domestic and export beer. The regulatory power of the Canadian Wheat Board and its ability to refuse the no-buy-back export permits also denies movement of barley, be it malt or feed, from us to the U.S. rye producers.
In the feed barley market, restrictions come from when the Canadian Wheat Board had no export program. Barley is grown more cheaply and is more easily exported from other countries to places where we once sold. Premium buyers for barley are non-existent. The Canadian Wheat Board has always been a buyer of last resort for producers who ultimately ship the poorer quality barley the feeding sector refused. Add to that the refusal of a no-buy-back export licence to allow producers to access the U.S. market.
The downward trend of feed-barley exports is expected to continue. Canada will be a residual spire in the global market.
Feed-barley research is limited, too. Barley development is severely lacking when it comes to a comparison with its relationship to corn. Both are used as feedstocks for the livestock industry, yet corn has seen substantial increases in yield and end-user needs.
The rapid expansion of the biofuel industry has limited somewhat the fear of our livestock industry leaving Canada to establish operations closer to where corn is grown.
Barley for industrial use has also been restricted by the Canadian Wheat Board and how it markets it. A waxy, hull-less barley has been found from which the beta-gluten content can be extracted. This beta gluten has recognized health benefits, yet it is a lower-yielding variety than hulled barley. With the lower yield and the way the Canadian Wheat Board markets this barley, there is no incentive for producers to grow it. Therefore this potential value-added industry is failing and we risk this potential industry being moved out of Canada.
What does work and what potentials are there? Non-board grains can be priced via the Winnipeg Commodity Exchange or directly contracted with an end-user such as a feedlot or commodity brokers. This puts cash immediately into producers' pockets and does not require pooling or the 15-month waiting period for a final payment.
Risk management tools such as hedging, calls, and puts can benefit both the producer and the end-user.
A proposed agriculture clearing house being developed by the Western Barley Growers Association in support of the private sector risk management partnerships of Agriculture Canada could greatly benefit all those involved in the barley community. By ensuring contracts are enforced and total price transparency, producers and end-users will have the security and the ability to use contracts to assure financial institutions of the liquidity of that transaction.
The biofuel growth in Canada may affect barley and barley production as well. The barley growers have submitted a proposal to the biofuels opportunities for producers initiative program to see where and if barley can add value.
Development of barley varieties for both ethanol and livestock use needs to be increased. As noted above, barley development lacks greatly in comparison to corn. This is an area where great growth can be realized in a choice marketing environment.
Malt barley opportunities are restricted due to the Wheat Board regulations. We see a great risk to our ability to be a malt barley supplier unless we see changes to the current regulations.
This ultimately means market choice. With market choice, information accuracy, symmetry, and timeliness would positively affect the following: development of feed and malt barley varieties to better meet end-user needs; continued development of marketing options with the Winnipeg Commodity Exchange; improved linkage between malts, their brewers, and the producers; value-added industries and their ability to locate where the barley is grown; and the issuance of no-buy-back export licences to allow producers to extract potential market opportunities.
These will all lead to growth in barley production, growth in value added, and ultimately greater returns to producers.
In conclusion, members of the Western Barley Growers Association think true market choice will increase returns to farmers and add value to western Canadian industry and infrastructure. It will build relations with end-users for attributes they desire and are willing to pay for.
A reformed Canadian Wheat Board, without its monopoly, will be used as a marketing option, one of many, not one of no choice.
Thank you.
Conservative
The Chair Conservative Gerry Ritz
Thank you, Mr. Nielsen.
Mr. Boyd, do you have anything at this time, or are you doing it jointly with Ms. Husband?
Boyd Charles Organic Farmer, As an Individual
No, I'm just here to represent myself.
I'm Boyd Charles, not Charles Boyd. I was asked to appear as a producer of organic grain. I farm in Saskatchewan. We farm 10,000 acres of certified organic ground, and have had a lot to do with the Wheat Board. The main reason I wanted to come was to tell you how the Wheat Board affects at least an individual organic producer in selling his grain.
I quit traditional farming in 1999, and one of the main reasons was to sell my own grain and not have to market it through the Wheat Board. I found out over the last seven or eight years that I actually have more to do with the Wheat Board than I did before.
Not one bushel of organic grain that I've sold since 1999 has actually been traded in Canada, except one sale of feed grain to a local organic chicken place near Winnipeg. So all my grain has been shipped to Europe, the United States, or Japan. I buy back every bushel from the Canadian Wheat Board, and I'm here to talk about this ridiculous buy-back feature that organic farmers have to go through.
For example, I bought back 462 tonnes of feed wheat in February--around 15,000 bushels--to ship to a place in the United States. The contract I signed was for a buy-back of $6.92 a tonne. I don't get the final results until the end of the crop year, so I just got a bill in the mail the other day for $11,000. That is a little over three times what the initial contract said. I don't know anybody who can run a business if you don't have any control over the costs. I can tell stories all day on the buy-backs, but that's just one example.
I just grew a malt variety for an organic maltster in Missouri under contract. It was accepted, and I'm ready to ship 50,000 bushels of malt barley to this organic maltster in Missouri. The trucks are hired, the contract's been signed, and the only thing left to do is buy back the malt barley from the Canadian Wheat Board.
I phoned down for a buy-back and I couldn't believe it. The buy-back on malt barley that day was $2.65 a bushel. That meant I would have had to stroke a cheque to the Canadian Wheat Board for in the neighbourhood of $140,000 if I had bought back my malt barley that day. They said, “Well, you have to figure in the pros”. When I asked what they were she said, “It will get you back down to $56 a tonne”. So it will only cost me $1.20 a bushel to sell my own barley to a maltster in the United States, after I found the market for it and did everything.
What disgusts me so much is that they couldn't even buy the grain if I offered it to them. I can't take it near any of their facilities or it would be contaminated. Organic grain has to be shipped in a certified vessel. So even if I offered them the grain they couldn't buy it, at least in the experiences I've had with them. Anyway, it wouldn't be at the price you'd want to sell it.
This buy-back on barley for $140,000, that's just an estimate. I might get a shock, because you have to run the full crop, which doesn't end until July 31 of next year, and then I'll get a bill in the mail in about October or November with the actual cost of that buy-back. If it's three times what they said it was in my feed week, then it could be as high as $400,000. I mean, you have no idea of what you're doing.
The only thing I can suggest it resembles is if it was the 1920s in Chicago, and I ran a little corner store, and I had to pay protection money to the mafia in order to operate that little store. I'm a farmer in Saskatchewan, and in order to operate that farm of mine I have to pay protection money--or whatever you want to call it--to the Wheat Board so I can operate. I can't deal without them. This is the only example I can come up with.
They have nothing to do with selling my grain. They have nothing to do with transporting my grain. They didn't find the buyer. I have all the expenses of growing it, yet I have to turn over a dollar a bushel to them just for the privilege of their buying my grain and then selling it back to me. If you tell this to an American, he has a really hard time grasping that idea.
That's the first point I'd like to make. If you do nothing else, please get the organic farmers out of the picture. I don't know of one organic farmer who wants to be involved in buy-backs or dealing with the Wheat Board. At least in my case, I'd like to market my own grain. Right now I'm making a deal for flax to Poland, I'm selling a special wheat to Japan, and I'm selling malt barley to the United States--and I don't need any help. I just want somebody to get rid of the red tape, especially the buy-backs.
The other thing I would like to comment on is the vote we were talking about having to decide this matter. I don't know any business that's running that doesn't have an equal vote. I was talking to a fellow on the plane who worked for Shoppers Drug Mart. He just got bought out last year. The company that bought him out bought 52% of the shares. So they controlled Shoppers Drug Mart, because they owned 52% of the shares. They made them lean and clean, and made their money. They sold all their shares, made lots of money, and now they're back to 3%, so they don't have a whole lot to say in Shoppers Drug Mart any more. But at least when they owned 52%, they had a lot to say about Shoppers Drug Mart.
Some 50% of the producers in the Canadian Wheat Board don't market enough grain to matter, yet they have exactly the same amount of say as the person who farms 10,000 acres. My suggestion would be that if you're going to have a vote that matters in the real world, then have one acre equal one share. Therefore, the guy with 10,000 acres and all that money invested in machinery and land would at least have a little more to say than the guy who has his name on a permit book but has never sold a bushel. You have to come up with some kind of decision on who gets to vote, because 38% of the people have never marketed a bushel, and 50%--if you combine them all--marketed 1,200 bushels or something. It's ridiculous that people who don't have anything invested in a company would have that much power.
That's my look at it.
Thank you.
Conservative
The Chair Conservative Gerry Ritz
Thank you, Mr. Charles. I apologize for the reversal of your name. It falls into the “close enough for government work” category.
We're moving on now to Ms. Husband, for your presentation, please.
Carole Husband Organic Farmer, As an Individual
Good morning...or afternoon, I guess it is here.
I am very pleased to be invited here today, because the present government has indicated they want to make some meaningful changes to the Wheat Board, and for farmers.
My husband and I in partnership farm organically in southeast Saskatchewan. We have farmed for 39 years on his family farm, which was established in 1900, and I want to talk to you today about money.
I recently read that $85 billion of the Canada GDP depends upon an adequate supply of grains. If you have enough farmers, you can indeed fill the supply, but western farm children are overwhelmingly rejecting farming. There is no money in farming. Everyone knows that agriculture creates tremendous wealth, but in order to survive, farmers need to capture more of that wealth created by agriculture, instead of begging taxpayers.
Legislators can put more money into farmers' pockets by making immediate changes at the Canadian Wheat Board. Before I give you my three recommendations on how to improve net income for farmers, I want to give you a little bit of background.
Government created the Wheat Board, giving them two distinct duties. Most familiar is the regional marketing duty, which is often referred to in part II and part III—marketing—of the Wheat Board Act. In part III, the Wheat Board buys grain from farmers who offer it to them. Part III only applies to the designated area, which is the west. This presentation is not about marketing.
The second duty of the Canadian Wheat Board is national licensing, in part IV. Licensing equally applies to all of Canada, just as the Canada Elections Act applies equally to all of Canada. All grain moving both interprovincially and for export is subject to having a licence. There are no exceptions, as Boyd found out, and only the Wheat Board can issue a licence.
When part IV was added as an amendment in 1947, it appears from access to information documents that it was intended to be a national tariff or export taxing provision, with the taxes to be paid to the government and costs paid by the government.
Every exporter in every province is subject to a fee described in paragaph 46(d) of the act. It is based upon the existing differences between prices of wheat and wheat products inside and outside of Canada, and because of NAFTA the export tax is presently zero dollars. However, there is an almost unknown Canadian Wheat Board policy in play that has a different effect upon farmers in different provinces.
Jean-Pierre lives in Quebec, and markets feed barley into the U.S.A. He gets the necessary Wheat Board export permit and licence and trucks south. Jim, in Alberta, also wants to sell his barley and applies for an export licence. The Wheat Board denies him. The Wheat Board's policy is to deny all designated area applications, so that Jim cannot bypass the Wheat Board as Jean-Pierre does. With no buyer other than an eager Wheat Board, Jim can eat his load of grain or burn it. He ends up selling to the board, which is no escape from the Canadian Wheat Board's policy monopoly. Any grain sold to the Wheat Board becomes board grain. A refusal under the national part IV, which is the licensing part, assures the Wheat Board monopoly buying under part III.
I am always shocked that the Wheat Board bases their monopoly authority upon licensing denial. If the elected Wheat Board directors, stacked with westerners, got ornery and denied all export licences to Quebec and Ontario, the Wheat Board could sell western grain into eastern producers' established markets and all MPs would pay a little bit closer attention to national licensing and licensing denials.
The Wheat Board Act is not an act of prohibition. I should go back and say that even though part IV licences should be equally issued to all Canadians, they are not. The Wheat Board backroom boys, swearing by their policy authority, continue to deny licences just because we live in the west, and this is discrimination.
The Wheat Board is not an act of prohibition. In fact, the courts repeatedly say it is an act of trade and commerce. They also say farming is under the constitutional head of agriculture. This means that all grain companies and railroads, which are described in the act as “works for the general advantage” of Canada clearly fall under trade and commerce and do exactly as the board says. Farmers with producer-held grain are outside the Canadian Wheat Board trade and commerce jurisdiction but are still subject to the taxing provisions in part IV.
I have a hunch you didn't know the Wheat Board quietly issues export licences to different categories of applicants who have successfully negotiated with the board to bypass the monopoly.
This unadvertised internal policy allows the following groups—that we know of—to bypass the board's marketing and pooling: one, all wheat or barley grown outside the designated area; two, pedigreed seed wheat and barley grown in the designated area; three, the specialty wheat varieties commonly known as spelt, kamut, and einkorn grown in the designated area; four, processed wheat and barley grown in the designated area and used for feed purposes under the Export Manufactured Feed Agreement, amounting to millions of bushels; five, wheat and barley grown in the Creston-Wynndel region, which were granted licences prior to 1998, when that region was still included in the designated area; and six, Ethiopian barley.
My husband and I are privileged that the Wheat Board issues export licences to us for our Ethiopian barley so we can personally bypass Wheat Board marketing and pooling. We just sold another load this fall without doing the buy-back, and received over $8 a bushel. We have another unregistered variety of barley, but the Wheat Board won't issue an export licence for that one.
Under the watch of the last government, western farmers were charged for not having export permits and were put in jail. These farmers lived in the designated area where export licences were automatically denied. Licence denial is the policy tool the Wheat Board uses to create its monopoly in western Canada.
These are my recommendations:
First, the Governor in Council can and must order the Wheat Board to issue export permits to western farmers, just as it does for eastern farmers. The Wheat Board will continue to buy and pool the grain for those farmers who choose the board as their marketing agent, just as it does now. Because the act does not have to be changed, the relief from the monopoly can be immediate for those who want to bypass the board, just as it is for us. This relief has been provided for many other applicants in the six categories I just named. All of them bypassed the board because they wanted to, and all were able to because the Wheat Board has willingly revised its policy to accommodate each category. Those asking for a western plebiscite on who gets national export licences are about as credible as men asking for a plebiscite in 1929 to decide whether or not women could have a ballot.
Second, the government must order the Wheat Board to obey its legislation and stop taking money out of the pooling accounts to pay for national licensing. Millions of dollars have been taken out of western pooling accounts for national licensing costs, even though they are supposed to be paid for by the federal government.
Third, the federal government can and must pay back the money taken out of the pooling accounts to pay all national licensing costs of part IV of the Canadian Wheat Board Act.
This is what westerners are paying for: the cost of issuing all provincial, interprovincial, and export licences; all administrative costs relating to the granting and denial of licences; all administrative costs of the big feed mills right across Canada under the Export Manufactured Feed Agreement; all compliance costs of licensing, including working with Canada customs and inspections; all Wheat Board costs relating to importing; and all costs of external and internal meetings and correspondence relating to part IV and other parts.
Recovered licensing costs, even for a ten-year period, will boost the pooling accounts. I realize that Ontario and Quebec are sitting pretty and don't pay either way, so we ask for your support to shift licensing costs from the west onto the federal government. The Wheat Board itself should have sent a licensing bill to the government, but it appears to have grown accustomed to playing fast and easy with the western pooling accounts. Under the watch of the previous Liberal government's Wheat Board minister, the Wheat Board took money out of the western pooling accounts to pay for $400-per-plate dinners for directors and staff to attend Liberal fundraisers.
With patriarchal governments and institutions, everybody sat idly by and watched the western accounts dwindle. But I'm looking forward to the marketing choice commitment the present government has made to western farmers. Governments who have the foresight to commit to trusting in their people will see the nation prosper.
Thank you.
Conservative
The Chair Conservative Gerry Ritz
Thank you, Ms. Husband.
Now we'll move to Cherilyn Jolly-Nagel, for her presentation, please.
Thank you.
Cherilyn Jolly-Nagel President, Western Canadian Wheat Growers Association
Thank you for inviting the Wheat Growers to appear before you today. My name is Cherilyn Jolly-Nagel and I'm the president of the association. I won't take up your time citing my credentials. I feel the only credential you really need to know about is that I am a producer.
The Western Canadian Wheat Growers Association is a prairie-wide voluntary farm organization. In our 36-year history, our organization has always maintained that individual farmers should have the freedom to decide how they wish to market their own grain. The Wheat Growers are seeking a voluntary CWB, under which individual farmers are free to choose whether to sell their grain on their own or in cooperation with others. Farmers in Ontario have enjoyed marketing choice since 2003 and are reaping the benefits. Last year, Ontario farmers planted a record wheat crop.
The Wheat Growers are seeking the harmonization of grain-marketing regulations across Canada. We consider it unjust that farmers in Ontario are free to sell their wheat and barley to whomever they please, including the export market, whereas any western Canadian farmer who attempts to engage in the same activity is considered a criminal and sent to jail. We are excited about the opportunities that marketing choice will bring. It will lead to higher farm gate returns. On my own farm, it'll also help to address cash-flow and storage needs.
During the Canadian Wheat Board debate, there's been a lot of talk about holding a producer plebiscite. While I understand that a producer vote might have some political appeal, I think it's important that we realize what's at stake. Yesterday some of the ministers made statements about owing it to farmers to let them have their say. These statements show some political savvy. But if you accept the argument that how I personally market my grain should be decided by the wishes of the majority, then what you are saying is that individual farmers should not enjoy the same property rights that almost all other Canadians take for granted.
The Wheat Growers believe every Canadian citizen should have the right to the enjoyment, use, and sale of their own property, particularly if that property was created through their own skill and labour. Most Canadians are free to sell their property to whomever they like. However, when it comes to my property, my grain, there seems to be no shortage of politicians who presume to know what's best for me, or who seem to think it's okay that my neighbours collectively decide what is in my best interest.
There is no one in this room, no one in agriculture policy, who knows my farm business better than my husband and I. Sure, we make mistakes. We've sometimes sold our canola and peas at the wrong time. However, as farmers who have a significant investment in this business, we are quite prepared to accept the responsibility of making these marketing decisions and the risk and reward that comes with it.
At the same time, we fully respect those farmers who want to market their grain on a cooperative basis. We all have different farming skills. Some of us are good at production, while others are good at marketing—just as some of us are good welders, truck drivers, or accountants. What is perplexing to me is why those who have good production skills are currently entitled to use those skills to their full advantage. But those farmers who have good marketing skills are denied the opportunity to use these skills to their full advantage.
Some politicians are skilful orators, while others are not. Does this mean that only good orators have a contribution to make? I certainly hope not. Wouldn't it be better if we simply allowed everyone to use their individual skills to their best advantage, rather than having others decide which skills we can use and which we cannot? I personally find it very patronizing when the Wheat Board and its proponents pat me on the head, as it were, and tell me not to worry, that they're doing a good job for me.
There's one more comment I wish to make regarding a plebiscite. Some are suggesting that a majority of farmers currently support the Canadian Wheat Board. A recent survey commissioned by the Canadian Wheat Board itself suggests that this is a myth. In May the Canadian Wheat Board released a survey of permanent book holders. They found that 54% of active farmers no longer support the monopoly for wheat, and that 64% no longer support the monopoly for barley.
Given those survey results, you may choose to pose the question: Why are the Wheat Growers opposed to a plebiscite? Quite simply, it's a matter of principle.
Yes, I think there is a good chance that we could win--for lack of a better word--a plebiscite, if the voters list and the question were credible. However, as mentioned earlier, we believe the right to sell your own property should be a fundamental freedom in Canada and is not a matter to be decided on the basis of a majority rule. In our view, all farmers should have the freedom to sell their grain to whomever they please, whether that is through the Canadian Wheat Board or on their own.
For proponents of a plebiscite, I have to pose the question: How much is enough? If only me, as a producer, standing in front of you telling you that I want the opportunity to market my grain on my own isn't enough, then how many is? If it's a 49% and 51% split, are you going to force 49% of the farmers to continue to market under the Wheat Board?
I want to assure committee members that this is not only an economic freedom argument, even though we attach great importance to that principle. We are also convinced that providing marketing choice will lead to substantial increase in farm income and entrepreneurial activity throughout the prairies.
You heard earlier today from some farmers who believe the CWB brings value to them, and I respect that. If they think the Canadian Wheat Board adds value to their farms, then by all means they should use it. Just as no one here knows my business better than me, no one knows their business better than they.
The point is that many of us do not think the Canadian Wheat Board adds value to our farms. In fact, I am convinced that the Canadian Wheat Board is costing our farms tens of thousands of dollars in lost revenue. It kind of reminds me of that annoying credit card commercial, only it's the Canadian Wheat Board that has its hand in my pocket.
The Wheat Growers acknowledge that the Canadian Wheat Board has provided more pricing and payment options in recent years. You can thank the Wheat Growers for this, because we were the ones who were the proponents of those changes. For years the CWB maintained that offering farmers anything but price pooling would destroy the Canadian Wheat Board. In fact, it was regarded as one of the three fundamental principles. Guess what? The CWB started offering forward-pricing contracts and the CWB has not collapsed. Now they brag that these options were their idea.
While many of our members have taken advantage of these contracts, what has become clear to us is that the CWB is not giving us an honest basis. As you probably know, world prices have rallied over the past few months; however, what is frustrating for us is that the Canadian Wheat Board has failed to capture this rally.
For example, for winter wheat the CWB's fixed price contract at Canadian elevators is currently more than $1 per bushel or about 20% below values being offered at the U.S. elevators. For spring wheat, the difference is about 50¢ per bushel, and for durum approximately 70¢ per bushel. I've done a quick calculation, and on my own farm this year alone, that represents a loss of revenue of about $46,000. That amount far exceeds what we have ever received in support payments under the CAIS program.
We're not asking you to take our word for it; rather, we encourage the committee to investigate these price differences yourselves. In our view, the Canadian Wheat Board has some serious explaining to do. Perhaps if the CEO spent less time politicking and more time focused on marketing, these price differences wouldn't be as great as they are.
Let me be clear: providing marketing choice is not all about gaining access to the U.S. market. What it is about is making sure we have access to world prices. Providing western farmers with marketing choice will see prices rise for wheat and barley throughout the prairies.
I know I don't have much time left, but there are a few more comments that I want to make.
First, I find it extremely frustrating that the Canadian Wheat Board seems to be spending more time on politicking than on its mandate. The CEO is perhaps one of the board's worst offenders. Instead of focusing on the business and maximizing returns to farmers, he seems more interested in giving political speeches and appearing on radio call-in shows to promote the monopoly.
How would you feel if a portion of your salary were deducted and given to a political party of a member across the floor from you? That's what I'm faced with. My dollars are being spent on the retention of the monopoly. I don't understand why the Wheat Board feels the need to give me a sales pitch. I have nowhere else to go, yet they feel the need to advertise the monopoly to me.
Because the Canadian Wheat Board is not subject to the access to information system, we have no idea what materials have been shared with select farm groups, nor what other sorts of political activities the CWB may be engaged in.
While we insist that the CWB be made subject to the Federal Accountability Act in the near term, we also recommend that it no longer be subject to this scrutiny as soon as all government guarantees are removed and the farmers enjoy marketing freedom.
Conservative
The Chair Conservative Gerry Ritz
Thank you.
We'll move to our questions round. We'll again stay with the five-minute format, gentlemen. Is that okay? That's about all the time we have; the Senate has this room booked for an election of a chair.
Mr. Boshcoff, you have five minutes.
Liberal
Ken Boshcoff Liberal Thunder Bay—Rainy River, ON
Thank you, Mr. Chair.
In the interest of time, I'll ask my questions and then perhaps panellists will choose one they would like to respond to.
Last night Bill C-300 was resoundingly defeated in the House of Commons with all four parties voting to some extent against it, indicating that Parliament does not want the Wheat Board destroyed. We also are well aware that in the spring survey of farmers, 88% determined that the decision as to the future of the Wheat Board should be made by farmers themselves. Why would the minister still be proceeding unilaterally to do this in the face of his moves being so antidemocratic?
Earlier on--and I know that all of you were in the audience--it was indicated that all of you will end up facing the concern of trade challenges. It's going to happen inevitably, whether the demise of the Wheat Board occurs or whether it continues. The prime lobbyists cheering the demise of the Wheat Board are in the United States grain lobby--in effect, your competitors. In fact, one newspaper article indicated that the Conservatives would be destroying what the U.S. has been trying to destroy for the past 12 years. Maybe one of you who has strong feelings about that could respond.
It was also in the agricultural and farmer media, press and otherwise, that it's now become common knowledge that the destruction of the Wheat Board would eventually lead to the slippery slope of tax on supply management in some form or another. As representative farm groups, you must be getting this type of communication from different organizations; it's not just one group trying to identify this.
The fourth point is that no matter where you are on this side of the issue, we have seen people fired from their jobs, we've seen the muzzling of free speech, and we've seen interference in voter registration, with thousands of people being denied the right to vote. There is the concern with freedom of the media, freedom of the press, freedom of free speech and those types of things in western Canada, which you are the representatives for. The rest of the nation probably hasn't had the attention to this, but it seems to be growing; other people seem to be concerned about the chronic muzzling by the minister.
The fifth point I would like to make is that Ms. Holm talked about the diminution and eventual eroding of the grain infrastructure in terms of rail cars and the ability to move in quantity to compete. I myself represent the Port of Thunder Bay. We are also concerned that dissolving the infrastructure would only lead to greater monopolies by mega-multinational corporations, as opposed to independent operators. If we are truly, as you represent, many independent smaller farmers, the concern from Parliament last night--and the reason the vote was so strong--was the fear of losing more farmers to bankruptcy, the fear more farms would be squeezed out by the megacorporations.
There are five of you; there are five questions.
Conservative
The Chair Conservative Gerry Ritz
We actually have five minutes for the whole question-and-answer session, Mr. Boshcoff, and you used up four minutes and 30 seconds to get your questions out. Written submissions would be fine, folks. If you need copies of those questions from Mr. Boshcoff, we can get them for you out of the Hansard record so that you can give us written submissions on them. Unfortunately, there isn't enough time. Does anybody want to try, in 30 seconds, to make...?
Go ahead, Ms. Jolly-Nagel.
President, Western Canadian Wheat Growers Association
I'll give it a go.
You mentioned the destruction of the Canadian Wheat Board. I can assure you that the wheat growers will have no part in the destruction of the Canadian Wheat Board. We are adamant that the Canadian Wheat Board must remain as a viable, strong, and competitive option for farmers.
I agree with your statement that the decision must be made by farmers themselves; however, I'm a farmer, Carole is a farmer, and Boyd is a farmer, so why do we have to decide? Why is this one decision on the marketing of just wheat and barley have to be decided as a collective whole? I'm sitting in front of you saying it's not working for me, and regardless of what every farmer out there believes, I should be allowed to step out of that.
Conservative
Bloc
André Bellavance Bloc Richmond—Arthabaska, QC
Thank you for being here.
We're beginning to see that there's no unanimity on this issue. That's why it's important to have this debate. If I understand your various statements, especially yours, Mrs. Jolly-Nagel, the debate is between individual freedom and collective freedom. There's some truth in saying that others shouldn't decide for you. Unfortunately, things do not always work as one would wish and one has to take account of the fact that we are all members of the same society. I'm referring it to society in general, even though we're speaking of the producers of Western Canada.
Stating that the majority cannot decide for the minority means that there's a problem with our democracy. We're being told that Quebec has decided to have a single marketing system for wheat. In Ontario, they have another system. There is choice. In Western Canada, you have the Canadian Wheat Board. The debate that has begun -- and my colleague Mr. Easter has even tabled a motion relating to the choice that should be made by the Western producers -- relates to holding a referendum. You are opposed to this idea because, according to you, if there is a mixed system such as the one proposed by the Conservatives, everyone will choose his or her camp and everyone would be happy. However, the concrete examples that we know have demonstrated that a voluntary collective market simply doesn't work.
Ontario has chosen one system and Quebec has chosen another. People in Western Canada want to have the right to choose. Don't you think that the real issue is related to choosing if there should be a Canadian Wheat Board or not? Don't you agree that the best way to choose in a democracy is to hold a referendum?
Organic Farmer, As an Individual
There is already a dual marketing system in place. I gave you the number of people who already bypass pooling and board marketing. For instance, a feed mill can come to our farm, buy grain, take it back, make feed out of it, and export it with a Wheat Board licence. The Wheat Board could have chosen to tell the feed mill it couldn't buy directly from the farmer. The Wheat Board could have said, “I'm going to buy the grain from the farmer and then sell it to the feed mill.” Instead, the Wheat Board lets the feed mill bypass the board completely.
You need an export licence when you export, so a lot of feed mills right across the country are going out and buying grain directly, bypassing the board. Millions and millions of bushels are already bypassing the board, yet I understood in your comments that it would destroy the board. It hasn't. It's happening now. They totally bypass Wheat Board pooling and marketing.
When we went to the Wheat Board and said we wanted a permit they gave us one. We don't go through the pools. We don't go through their marketing. We get a licence just the same as Quebec does. When Quebec or Ontario want to get an export licence to sell their products, they have to apply to the board. They get a licence and they export.
I told you about my barley. I applied to the board, got my export licence, and went across the border. When Mr. Charles applied they said, “No, you can't have a licence. You must sell it to us.” So some people are getting licences and other people are not. That's what you call dual marketing, and it's happening right now. It's just that perhaps you're not aware of it.
Conservative
The Chair Conservative Gerry Ritz
Any redirect, Mr. Bellavance? You have 30 seconds.
No. Okay, we are going to move on.
Mr. Miller, five minutes, please.
Conservative
Larry Miller Conservative Bruce—Grey—Owen Sound, ON
Thank you very much, Mr. Chair.
I have a lot of questions, and I'm going to make them very brief. Most of them, if not all of them, are going to require yes or no answers, so I hope you can help us out there.
There is just one thing I want to mention, Mr. Chair. I would like the comparison numbers that Ms. Jolly-Nagel talked about. She mentioned a figure of $46,000 lost. I would just like to see those numbers, because that's kind of contrary to some of the stuff we've heard. So if we could have them at a later date....
One of the questions I have is that the National Farmers Union has said that things haven't changed in wheat marketing and wheat production in the industry in the last 70 years. Do you agree or not?
President, Western Canadian Wheat Growers Association
[Inaudible--Editor].
Conservative
Larry Miller Conservative Bruce—Grey—Owen Sound, ON
Thank you.
I'm also a farmer, by the way. I've sold wheat under the Ontario board. I'm currently a beef farmer as well.
I hear from beef farmers in my riding and from relatives and friends I have in the west--and they say this tongue in cheek--that they want to see that the Wheat Board is kept in place because it keeps the price of barley down. Have you heard any comments similar to that in your part of the country?