Thanks, Mr. Chair.
I appreciate your giving me the opportunity to speak.
The Canadian Wheat Board Alliance is a voluntary prairie-wide organization of grain farmers who recognize the value of collective marketing, the independent and impartial quality assurance provided by the Canadian Grain Commission, and the importance of public plant breeding.
Prairie farmers export approximately 70% of their annual production to the global market. In the absence of the single-desk Wheat Board, access to that global market is now controlled by four giant grain companies called the ABCD group: Archer Daniels Midland, Bunge, Cargill, and Louis Dreyfus. Freedom to market grain is myth. You either work through the four companies or you don't sell your grain. It's that simple.
Consequently, prairie farmers face several competitive disadvantages. Our average distance to port is 1,524 kilometres through the mountains, while the Australians have an average distance of 280 kilometres, largely downhill to port. This is very similar to the other major grain producers in Argentina and Ukraine. When you talk about market factors you can't change that. That is a disadvantage that we have to gain back in some other area. Prairie farmers no longer have direct access to end-use customers. Prairie farmers have lost their competitive advantage of supplying quality-assured grain. There's no more overseer of the entire system. Every grain company operates independently and information is not shared. Individual prairie farmers have no market power to deal with either the railway or grain company oligarchies.
Before some people start jumping on me, I will point out farmers don't have the right to organize. It was really interesting to hear the mining company lady sitting over there saying that the two largest fertilizer companies can combine to ensure their viability. I really find it indicative of the type of politicians we have in the arena we're working in right now that it's okay for large companies to work together, join up, not be competitive among themselves but when farmers want to do it, it's somehow seen as bad.
Most farmers also feel that the Wheat Board and its assets were unjustly seized from them. To clear the air, a full audit of that seizure needs to be undertaken as soon as possible. In the interim, we would call on the Minister of Agriculture to release the unredacted audit of the final year of operation of the CWB, which the former minister withheld from Parliament.
Your committee has asked what federal actions would assist Canada’s businesses in all regions and sectors to meet their expansion, innovation, and prosperity goals, and thereby contribute to economic growth in the country? We would answer this way: with the end of the single-desk CWB, prairie farmers lost the beneficial ownership of their wheat and barley from the farm gate to the end-use customer. In August 2015, Dr. Richard Gray, an agricultural economist at the University of Saskatchewan, explained the losses in 2013, 2014, and 2015 by noting that the increase in the basis that farmers lost to the beneficial ownership for their wheat and barley from the farm gate to the end customer amounted to $5.05 billion.
For people who don't understand what the basis is, it is the difference between the futures price of the grain and the price that what farmers get. Some people call it “spillage” or “tuckage” from the grain companies. In the Wheat Board era, it used to be in the $30 to $50 a tonne range. After the Wheat Board was destroyed, it went up as high as $170 to $270 a tonne. That money was extracted from farmers and went to the grain companies. That essentially meant the transfer of more than one-third of the end-use value of wheat and barley from Canadian farmers into the pockets of the international grain trade.
Protein premiums are in addition. If you grow good quality wheat, protein increases and with that increase you usually get an increase in price. The grain is worth more. That disappeared because there was no marketing of that. It was blended out for the grain companies' benefit and not the farmers'.
I'd like to make six recommendations.
First, give priority to funding a single-desk marketing agency for prairie grains. Historically, this type of organization has been shown by many trade challenges to maximize returns to prairie farmers and, consequently, to their communities.
Second, restore full funding to the Canadian Grain Commission to reclaim Canada’s quality advantage. This would provide customers, whether they are the customers of the giant grain companies now marketing prairie grain, or any future marketing board, with objective and impartial quality assurance.
Third, reduce the costs of inspection and handling by re-instating kernel visual distinguishability, or KVD, so buyers can see that they are getting good Canadian quality.
Fourth, the amalgamation of seed and agro-companies creates a clear conflict of interest that must be eliminated if we are to continue our long tradition of producing the highest quality wheat, barley, and other grains that are expected by our international and domestic customers. Therefore, we would recommend that all funding of new seed variety development be undertaken as a partnership between the prairie producers through the Western Grains Research Foundation and a fully funded Agriculture and Agri-food Canada, with all patent rights being held in trust by the crown for the sole benefit of prairie farmers.
Fifth, the continuation of the maximum revenue entitlement for the two railways is crucial to prairie agriculture. The MRE must include any expansion of interswitching distances. This is a really crucial point. The reason it's so crucial has to do with the policy on transportation within this country. I see some new MPs here and I see some older ones, but I don't think either is going to be able to answer this question: could somebody show me where the transportation policy is? There is none. I think that needs to be changed.
Sixth, given the implementation of our first recommendation, we would further recommend that the federal government nationalize the railway and grain facilities at the Port of Churchill to allow prairie farmers in the Churchill catchment area to once again capitalize on its financial advantages for that region. I think that's a crucial point. We now have a corporation that dictates to us, through some financial dealings that I can understand, that farmers in that area must pay an extra $30 a tonne to move their grain out because they decided to close the port because it wasn't beneficial to them. But it's beneficial to me; who represents me, the farmer?