Agriculture Committee on May 14th, 2009

[Ian White]

That's my answer: in the next couple of years.

[Brian Storseth, Conservative, Westlock—St. Paul, AB]

The next couple of years?

[Ian White]

Could I answer the question, please, about the $226 million?

[Brian Storseth, Conservative, Westlock—St. Paul, AB]

I have one more question and then I'll give it to you guys, and Mr. Valeriote can ask. I don't mean to be short, Mr. White.

I would like to ask my last question, Mr. Chair, of the Prairie Oat Growers Association.

Would you consider that oats have been a success since they came out of the monopoly? Would you consider that change to be a success, sir?

[William Wilton]

Oats have been a tremendous success, but there are a number of factors that went along with oats being removed from the Canadian Wheat Board.

Going backwards, in 1988 there was a total drought in the oat-growing region in the United States. It forced the American millers to look elsewhere for oats. They came to Canada and they went to Europe; they went to Scandinavia. We're still living with that legacy.

The marketing of oats was removed from the responsibility of the Canadian Wheat Board. But shortly after that, for transportation rate concerns, transportation policy was changed to allow oats to be shipped directly from the gathering point on the prairies to the mills, rather than having to go through Thunder Bay.

One of the biggest issues with the success of oats in Canada has been the American Farm Bill program, which threw all the support in that program behind wheat, soybeans, and corn. Basically the American farmers, because of that farm policy, abandoned oat production.

If you eat oats as a human in North America, there's a 95% chance that they were grown within 100 miles either side of a line between Emerson, Manitoba, and Saskatoon, Saskatchewan. We are the suppliers of human consumption oats to North America.

[The Chair, Conservative, Larry Miller]

Thank you. Your time has expired.

We go to Madame Bonsant for five minutes.

[France Bonsant, Bloc, Compton—Stanstead, QC]

I like it when we talk about disputes over the loss of $300 million. In employment insurance, $54 billion has disappeared. So when we talk about $300 million that farmers have been deprived of, that troubles me, but you're not fighting for the lost money, because we know where it's going.

Mr. Storseth asked a question earlier which you didn't have a chance to answer. I'd like you to take the time to answer it because I know you have a message to send.

So, Mr. White, answer the question about the alleged disappearance of the $89 million that you wanted to answer earlier.

[Ian White]

The question I was wanting to answer was associated with the view that the CWB had lost $300-odd million. There's no question that the $89 million was an actual loss. The $220-odd million that is referred to, which we disclosed in our annual report, is actually an opportunity loss only.

The CWB sets a pricing pace benchmark each year, which is our own pricing pace. There are many ways of managing a pool and pricing it. What we have said is that we would have made more money if we had followed that pricing pace rather than a pricing ahead of the market, when there was a very large increase in the market early in the 2007 season.

[France Bonsant, Bloc, Compton—Stanstead, QC]

I'm trying to understand the role of the Canadian Wheat Board. You negotiate wheat, barley, and so on, at the world level or just in Canada?

[Ian White]

Wheat and malting barley at both domestic and international levels.

[France Bonsant, Bloc, Compton—Stanstead, QC]

That means that, if people want the Canadian Wheat Board to disappear, they'll have to negotiate in the global market on their own.

So farmers will have to pay for transportation and a lawyer to read the contract to ensure they aren't swindled in one way or another. They'll also have to travel to other countries to go and see with whom they can negotiate.

Is that what people in the west want?

[Ian White]

I don't know what the plan is. What would typically happen is that you would find a number of international trading companies become the buyers from the farmers and they would export it through to the international marketplace.

[France Bonsant, Bloc, Compton—Stanstead, QC]

It would be the Walmart of wheat—pardon my comparison. In other words, these companies would knock on your door and negotiate directly with farmers for access to the local market, but at their prices. That would mean that those international trading companies would go and negotiate directly with the farmer, the grower of that grain. Should that farmer wind up in a precarious situation, those international companies could fiddle with the world price, the bushel price. They could push it up or down because an international company carries weight.

[Ian White]

That's probably one way of thinking about it. The farmer in that environment would always have the opportunity not to sell and to try to find a better market. That's certainly inherent in a deregulated environment.

[France Bonsant, Bloc, Compton—Stanstead, QC]

Mr. Phillips, you said earlier that you had tried to organize the vote, etc. There were 14 recommendations. Are those 14 recommendations public, and would it be possible to send them to us?

[Richard Phillips]

It was an expert panel composed of one farmer from Alberta, one from Saskatchewan, and one from Manitoba. They went out and held hearings across the Prairies and they received letters and input. Out of that, they met and worked out these panels. We'd be happy to share that with the entire committee.

[France Bonsant, Bloc, Compton—Stanstead, QC]

Mr. Hill, I know that you're a farmer by training, and so on. Do you think it is more important for farmers to be members of a panel or a board rather than just representatives of a government?

Personally, if I wanted to sit on the Canadian Wheat Board, it would be difficult because I know nothing about it. So where is a government's expertise relative to that of wheat and barley producers?

[Larry Hill]

Certainly I think it's very important that producers are on the board of directors, because for the Wheat Board to be successful, producers have to see they own it. It's important they feel their voices are being heard at the table.

When it comes to experts, you don't get elected farmers who have the kind of expertise in the financial areas that we require. A recent board member who has been appointed, Mr. David Carefoot, has that kind of expertise.

[The Vice-Chair, Liberal, Mark Eyking]

Your time is up, Ms. Bonsant.

Mr. Richards, you have five minutes.

[Blake Richards, Conservative, Wild Rose, AB]

Thank you.

I thank all the witnesses for being here today.

Mr. Hill from the Canadian Wheat Board recently wrote a letter to the editor of the newspapers in my riding, or at least one was written under his name. It was in response to a March 27 press release that I put out calling for a dual marketing system for western Canadian wheat and barley producers. Based on that letter, there is one thing we can certainly agree on, and that is that our farmers are among the country's most innovative and industrious businessmen. Unfortunately, that's about where our agreement ends, and that is because I'm standing up for western Canadian farmers who are being severely hamstrung by the Canadian Wheat Board's monopoly.

Let me put it on record once again: this Conservative government will continue to stand up for our farmers. What our grain growers are telling me, through the farmers in my riding—through their calls, letters, and visits with me—and through the testimony we've heard from many producers here at the agriculture committee, is that the biggest obstacle to their competitiveness is the Wheat Board monopoly and their inability to get the best price for their crops as a result, and also their inability to gain profit though value-added processing.

We heard an example here today from Mr. Bender from the Western Canadian Wheat Growers Association. He stated today that year after year, returns through the Canadian Wheat Board are lower than those wheat growers would receive on the open market. We heard on March 24 from Rick Strankman, a director with the Western Barley Growers Association. He said the Wheat Board is not working for us. He went on to give us an example of a situation that he was dealing with directly, in which he was finding the Wheat Board getting in his way. He's saying he's being hamstrung by the Wheat Board in his ability to get the best price for his products.

We also saw recently a study from the C.D. Howe Institute that they released last November in which they indicated that over the previous three years the Canadian Wheat Board had been paying farmers up to $40 a tonne less than what comparable American farmers were being paid by private grain companies. That amounts to about $18,000 a year less per farmer than American grain companies would have paid for the same crops. That's $18,000 a year less per farmer that the Wheat Board was giving than they could have received otherwise.

It's clear to me that the Wheat Board is a severe hindrance to the competitiveness of our western Canadian farmers. What they're telling me is that it is probably the biggest hindrance to their getting the best price for their products, to be able to value-add and to get the best for their products.

My first question is to both the Western Canadian Wheat Growers and the Grain Growers of Canada. Would you agree that the Canadian Wheat Board monopoly is the biggest obstacle you face to your competitiveness?

I'll ask the other question too at the same time. I'll allow you guys to go first, but if there's time after that, I would like to demand an answer from the Wheat Board on behalf of farmers in my riding who are telling me that the biggest barrier they face is the Wheat Board monopoly and that they want a dual marketing system, so as to be able to get the best price for their products if that's what they choose to do.

I demand an answer from the Wheat Board on that specific point. I don't hear any farmers from east of the Manitoba border clamouring and calling to be let into the Wheat Board; yet I hear all kinds of farmers in the west asking for the opportunity to market their products the way they see fit, whether it be through the Wheat Board or through their own direct marketing.

[The Vice-Chair, Liberal, Mark Eyking]

Just to help you out, you've used up four minutes. You only have a minute left and you probably only have time for one answer.

[Blake Richards, Conservative, Wild Rose, AB]

Okay. Well, let me ask the folks from the Western Canadian Wheat Growers Association whether that is in fact the biggest barrier to their competitiveness.

If there is time, I'd like to have the Wheat Board answer the question I've asked them as well.

[The Vice-Chair, Liberal, Mark Eyking]

There's only one minute left, just so you know.

[Kevin Bender]

Thank you, Mr. Richards.

I would say it's one of the biggest. It probably is the biggest obstacle we face in terms of competitiveness, not just on our part as farmers, but even, as you mention, as a value-added industry. I think in an open market we would see a lot more malt, pasta, and flour development in Canada. That would spill over, back to us again. I think it would benefit the entire economy and not just farmers.

[Blake Richards, Conservative, Wild Rose, AB]

And so, speaking to the Wheat Board, you've just heard those comments. You've heard the other comments that I've given examples of, and those are just a few examples of many. Tell me how you can justify, especially when you don't hear eastern farmers clamouring to get in...? How can we not allow this choice to our farmers?