Mr. Speaker, it is a pleasure to follow my colleague from Beaver River. I would like to raise many of the same points but it is important that I have an opportunity to speak on Bill C-92, an act to amend the Canadian Wheat Board Act. The bill is very near and dear to my heart. It affects many of the people in my riding. The Peace River riding has a large and very dynamic agricultural community. We are watching with great interest what will happen today as the bill is amended.
By way of background, the bill amends the Canadian Wheat Board Act to change the pooling points on which the initial payments are based from Thunder Bay and Vancouver to points in Canada designated by regulation of the governor in council. The bill also amends the Canadian Wheat Board Act to establish a deduction from the initial payment that supposedly reflects the relative transportation cost advantages of each producer.
The way the system works now shipping charges are determined by the distance a farmer has to ship grain to its designated pooling point of Thunder Bay and Vancouver. In my riding of Peace River approximately 95 per cent of all the grain produced in that riding is shipped west to the Pacific coast although one of our designated pooling points has been Thunder Bay. This means farmers in Peace River and other farmers in the western prairies have subsidized part of the costs of farmers in the eastern prairies through the freight pooling system the Canadian Wheat Board has implemented.
My understanding of what is being proposed is a system of four catchment areas. Each area will have a different deduction for transportation to a new designated pooling point. There are few specifics in the bill so I can only speak to the larger concept of what is being proposed.
The changes will result in higher grain prices for farmers in Alberta and western Saskatchewan and lower relative grain prices for producers in eastern Saskatchewan and Manitoba once deductions for transportation are made.
It is thought that the bill which becomes effective August 1 will raise wheat prices in the west by an average of about $5 per tonne and feed barley prices by about $6 per tonne. Similarly prices in the eastern prairies will drop. This is part of what we call a rationalization that needs to take place in the total transportation industry and grain industry so that farmers can be effective, efficient and able to compete on the world market where they must compete. We must get transportation prices in line and this is a step in the right direction. It goes part way to addressing some of the distortions caused by the blanket pooling system and replaces it with a bunch of mini-pools.
However I have a problem with the whole concept of straight pooling no matter how it is done. As a farmer I do not want anyone to subsidize my freight costs. I certainly do not want to subsidize anyone else's either. I propose that we pay the real cost of moving our grain from point a , in my case the Sexsmith area, to Vancouver or Prince Rupert and let the producer who lives somewhere else pay his or her real costs.
I am opposed to any type of freight pooling system. My preference would be to move to an open user pay system where farmers can decide where they want to ship their grain and where the market decides how much it would cost.
The changes proposed in the bill seem to maintain the control the Canadian Wheat Board has enjoyed in past decades. Just as a bit of history, the board was established first in 1917 for the war period and then again in 1935 to ensure the orderly sale of grain when western Canada faced economic and environmental disasters. In its original form the Canadian Wheat Board was a compromised tool for increasing returns and stabilizing incomes. Participation by farmers was voluntary. I stress very clearly that it was voluntary. It was not the way it is now where it is compulsory on all export grain.
In 1943 when supplying food to Canada's allies once again became an important national goal, the participation of farmers in the Canadian Wheat Board became compulsory. Unfortunately that did not end when the war ended, although that is the time it should have ended.
The board's chief mandate is to market wheat grown in western Canada in the best interest of western Canada's grain producers. Its designated areas include the three prairie provinces and a small part of British Columbia. The board is the sole marketing agency for export wheat and barley and the main supplier of the grains for human consumption in Canada.
Canadian feed grains for domestic consumption could be marketed either through the board or directly through grain companies. The sales of the Canadian Wheat Board fall between $3 billion and $6 billion annually. The board is administered by a chief commissioner, an assistant chief commissioner and three other commissioners. All costs of the board's operation are paid for by western grain producers. It is a user pay system and will lead to the concept that we should have control over the board.
An advisory committee was touted in the House last year elected from the producer group. It would advise the board on policy but would have no real power. It is just an advisory committee. However it has a very important function; it was democratically elected.
I have run through a bit of the background because I want to point out that the Canadian Wheat Board did not always exist in its present form. There was a time when farmer participation was optional. I also want to lead into some other changes that are necessary to bring the Canadian Wheat Board into the times.
The Reform Party has been saying for a long time that commissioners to the board should be democratically elected. Producers should have a real say on how the board operates and what kind of power it has. Only if commissioners have to run on certain platforms in certain designated areas can producers truly have a say in the board's operation.
The government is willing to allow an elected advisory committee, which is what has taken place for the last several years. Why not extend the same democratic process to where it really counts, to the people who run the Canadian Wheat Board themselves, the commissioners? I would like to see a dual system of marketing so that it would be the same for export grain as we currently enjoy on domestic grain in Canada. That would mean there would be a Canadian wheat board type of system where farmers who wanted to pool would be allowed to do so and those who did not would be allowed to sell on the open market.
I would like to give two examples of situations that are nonsensical but exist because the board is not accountable to the people it is supposed to be helping. These two examples are of farmers who have been trying to diversify. The very thing we want is for farmers to diversify however both of them have been frustrated by the rigid structure of the Canadian Wheat Board.
First there is the story of Bob Numweiller, a Saskatchewan miller who lives close to the U.S. border. He wants to mill his own wheat, let me emphasize his own wheat, into flour and sell it from his farm. The board says he cannot do that. First he must sell his wheat to the Canadian Wheat Board. Then he can apply to buy it back but he must also pay the board's price and its administration fee even though he does not go through the Canadian Wheat Board. Then he has to wait a year or more to find out how much money he got for his wheat, his wheat, which he so-called sold to the board. It sounds like something which could have happened in Russia 20 years ago.
There is an absurd twist to the story. Now that the Canadian Wheat Board can no longer control imports because of the passage of Bill C-57 which brought us up to speed with the World Trade Organization, that farmer has discovered he can cross the United States border, buy American wheat and bring it back and mill it on his farm but he cannot mill his own wheat without going through this rigid structure. Something is obviously wrong.
Then there is the story of a farmer in my riding who is a friend of mine. He has gone on to diversify and has started to grow organic wheat. However the wheat board does not sell organically grown wheat. As such it has to be pooled with conventional grain where of course it loses all of its advantages and its distinctiveness.
The board deals in boat loads. There is not enough production at this time to fill a boat and it is too much hassle for the board to administer a container load, or so it seems. The question is: Is Mr. Schmidt allowed to do his own marketing? Only if he goes through the Canadian Wheat Board first. He has to do his own marketing but he has to apply to go through the board first.
Here are the steps he must take: First he has to go to his own local elevator to sell his grain on contract. The elevator writes out the sales ticket. Mr. Schmidt writes out a buy-back cheque for $36.94 a tonne. He also has to pay the elevator a $5 per tonne administration fee even though he does not use it. Now he owns his own grain. I have to emphasize that at this point he now owns his own grain. How absurd. He can sell it as he pleases. However he has to wait a year to get his original $36.94 per tonne back or he may not see it at all depending on how the pool did that year.
If he tries to bypass the Canadian Wheat Board he commits a criminal offence and must pay a penalty of $12,000 and spend two years in jail. What kind of a system do we have in this country? This gentleman has gone out and found his own market for a product which we are trying to encourage, organically grown grain, and the system which we use is inhibiting him and many other farmers who want to diversify.
Those are just two examples of why the Canadian Wheat Board needs an overhaul. I would start by ensuring that the commissioners are democratically elected by producers. After that the board would change its ways and meet the needs of the farmers of the 21st century in a hurry. Otherwise they would not be re-elected.
Today's new generation of commercial farmers want to substitute their management skills for the collective approaches which have dominated the system for the past few decades. They see new opportunities and hot new products such as organic grain. Using their own skills and their own comparative advantages they want to be free to grow new crops and market them themselves. That seems a reasonable approach to me and one which has to be worked out. Otherwise the Canadian Wheat Board will lose in the end.
My experience in my riding is that the farmers who are questioning the Canadian Wheat Board's approach to a single desk marketing agency are those of a younger age. Unless the board adapts they will be gone. These new farmers are not knocking on the government's door asking for new subsidies. All they are asking is for government to get out of their way to let them do business. I hope the government is listening.