Good morning. My name is Wendy Holm. I'm a Canadian agrologist, resource economist, and farm journalist.
I want to say at the outset I have absolutely no partisan interest in this issue. My concerns are those of an agrologist, and to say I'm alarmed is an understatement. This is why I'm here today, and I thank this committee for the opportunity to speak.
First my credentials. I'm an agrologist with over 30 years of professional standing in Canada. I'm past president of the B.C. Institute of Agrologists, former director of the Agricultural Institute of Canada, B.C. agrologist of the year 2000, and recipient of two Queen's medals in 1993 and 2002. As a resource economist, I have expertise in economics, competition policy, trade policy, industrial organization, and the effects of regulation on private sector performance.
As a farm journalist, I have 12 years of published columns under my belt, monthly columns. Because of this, I feel I am qualified to give a professional opinion of the policy implications of the recent actions by Canada's new government to destroy the central selling desk authority of the Canadian Wheat Board, the only entity that stands between farmers and the interests of concentrated market players.
Other witnesses before this committee have documented in length the importance of the Canadian Wheat Board to prairie agriculture. I myself have devoted four columns to this subject since February. One, “Dual Desk is Code for Disaster” just won the Frank Jacobs bronze award for press columns at the Canadian Farm Writers' and Broadcasters' Awards in Winnipeg.
Dual desk selling will destroy the power of producers in the marketplace. With the Canadian Wheat Board gone, an estimated $800 million in benefits to western grain producers are rising directly from the Canadian Wheat Board single desk selling authority will flow from the pockets of producers in the western Canadian communities they support to the coffers of the large grain buyers and their shareholders. The real question is why is this government flying in the face of logic and politics to deliver a campaign promise to destroy the Canadian Wheat Board? When in doubt, follow the money.
The large multinational grain companies have had it in for the Canadian Wheat Board since the mid-1980s. Understandably so, since the Wheat Board confers over $800 million in benefits to farmers, benefits that would accrue to the companies themselves. The Americans have been pestering Canada to get rid of the board too, for similar reasons. They want to high-grade their lower-quality grains with quality Canadian product and have access to our freight systems.
In April 2002, following a meeting with top U.S. trade officials, North Dakota Wheat Commission chair Maynard Satrom assured growers the common objective of both the U.S. government and U.S. wheat producers is the ultimate reform of the monopolistic Canadian Wheat Board. Two weeks later, in Senate testimony, the U.S. Department of Agriculture argued that the special privileges of single-desk sellers gave “unfair advantage” to Canadian Wheat board farmers, adding that American grain should be able to freely compete with Canadian grain for Canadian rail shipments. Complaining that the practices of the Canadian Wheat Board restrict U.S. access to our market and make U.S. producers less competitive on world markets, the USDA called for “fundamental reform” of organizations such as the Canadian Wheat Board to permanently assure that U.S. producers are treated fairly in the world market.
In March 2003 an unsuccessful WTO challenge was launched, and again in May it was appealed and again was unsuccessful. It argued that the Canadian Wheat Board has a longstanding history of creating and developing a competitive advantage for Canadian farmers in wheat markets around the world. What is wrong with that? Exactly what they should be doing is giving farmers a comparative advantage. According to the Canadian Business Resource, their status as the only seller of western Canadian wheat and barley positions the Canadian Wheat Board to earn premium prices for farmers on annual sales of over two million tonnes of grain to more than 70 countries. All revenue, less marketing costs, is returned to about 85,000 prairie farmers. The Canadian Wheat Board has a proud reputation for high-quality products, reliable supply and delivery, and unparalleled customer support. A privately held member cooperative, the Canadian Wheat Board ranked number 95 in this year’s list of the Financial Post’s FP 500 companies, just behind SNC-Lavalin, Saputo Inc., and Canfor.
For the Canadian Wheat Board, dual desk selling is a whistle stop away from gone. Multinational competitors with deep pockets will bid away grain in the short term, and the Canadian Wheat Board will starve to death. Once gone, grower premiums of $30 to $45 per tonne that farm economists attribute to the Wheat Board will disappear forever. But the damage will not stop there. The collapse of the Wheat Board will have a domino effect on the rest of the prairie grain economy. Without the Canadian Wheat Board, the producer car system will disappear, as short-line railways that rely on producer car shipments will also disappear. Independent grain handling facilities that are today supported by the Wheat Board's overseas marketing connections will quickly disappear in a market dominated by transnationals. Highways will further deteriorate, as farmers have no option but to haul grain longer and longer distances to larger and larger elevators. Canadian grain will become generic and be mixed with the grain of other countries, lowering prices to western Canadian grain farmers.
With the top four firms controlling 73% of world grain markets and the top five controlling an 80% share, with six major North American rail companies controlling freight rates and car access, this is not the time to weaken the power of farmers in the marketplace.
In response to this threat, the vast majority of western Canada grain farmers, together with Canada's major general farm organizations, have stepped forward.
On the one hand we have the Americans, the multinational grain companies, and the Harper government trying to dismantle the Canadian Wheat Board, and on the other hand we have Canadian farmers, farm organizations, and the Canadian public trying to stop them. Harper knows that if farmers voted in a plebiscite, as required under section 47.1 of the Canadian Wheat Board Act, the single desk authority of the Wheat Board would remain intact.
The publicity on this issue has, I suspect, forced Harper to overplay his hand. Muzzling the directors of the Canadian Wheat Board so that they cannot defend farmers' rights under section 47.1 and changing voter rules mid-election in an attempt to influence the outcome in the government's favour would raise concern even in a third world country. Perhaps the new government doesn't know this, but such tactics are not acceptable in Canada.
I'd like to close today with a story that I think illustrates much of what I have said here.
As an agrologist, I went to Saskatoon on July 27 to stand with Canada's farmers in support of the Canadian Wheat Board. I felt that they were right, and that professionals should come forward and say so. When I had my two-minute turn at the mike in the Vimy bandshell in the park, I encouraged other agrologists to come forward in support of the Canadian Wheat Board and the right of Canada's farmers to make this decision. I saw it as a professional responsibility.
That afternoon I sat in a packed room and listened to farm leaders from across Canada defend the Wheat Board and the clout it gives to farmers. Later that afternoon, Chuck Strahl emerged from the invitation-only meetings he had been having across the street--with those who agreed with the Harper government's views on the Canadian Wheat Board--to hold a press conference.
I attended as a freelance columnist with the Western Producer, and asked the minister whether his government was prepared to implement dual marketing without a supporting vote of producers and in violation of section 47.1 of the act. I then returned to B.C. to write my column.
That Monday, I was about to file my August Western Producer column when I received a phone call from my editor, Barb Glen, who seemed shaken. She said they'd received a call from Chuck Strahl's office--and from one other person--suggesting that my presence at the rally indicated bias on the part of Western Producer. My monthly column, which had appeared on the op-ed page the second issue of every month for the past 12 years....