Mr. Speaker, I would like to thank the hon. member for Malpeque for making this debate possible. These are difficult times for farmers, not only in the west but throughout Canada. This calls for rational thought and a spirit of cooperation.
For example, the threat to fire Adrian Measner, a proven CEO of the Canadian Wheat Board, because he happens to disagree with the Conservative government's platform, is wrong. It is equally wrong to stack the Canadian Wheat Board's board of directors with two new appointees, one who was fired from the Saskatchewan Wheat Pool and the other who has demonstrated an open hostility to the very idea of a Canadian Wheat Board or to any kind of government assistance to farmers.
We have seen the results of the Canadian Wheat Board elections. Farmers have spoken. Four out of five directors are strongly supportive of a single desk Canadian Wheat Board, with only 20% voting against it. Interestingly enough, the largest margin of victory for Canadian Wheat Board supporters came in the district overlapping the riding of the Parliamentary Secretary (for the Canadian Wheat Board) to the Minister of Agriculture and Agri-Food and Minister for the Canadian Wheat Board.
In District 1, Art MacKlen, a strong Wheat Board supporter, lost his seat by only 205 votes. There has been some suggestion that this may have happened because of the minister's interference in the elections; approximately one-half of farmers found themselves out of this election. In fact, the gentleman who was successful in District 1, Mr. Henry Vos, was himself not happy with this government interference.
As Mr. Ken Ritter, an elected director for District 4 and chair of the Wheat Board stated in his letter to the Standing Committee on Agriculture and Agri-Food last week, “Since the [Canadian Wheat Board] last appeared before the committee in the month of June 2006, the relationship between the federal government and the CWB has unfortunately not improved”.
This is due to a number of reasons: first, a July 27 meeting to which the CWB was not invited; second, an unbalanced and anti-Wheat Board task force; third, the minister's order in council restricting the Wheat Board's right to openly communicate with the farmers in the way it sees fit; fourth, changing the director election process in mid-stream; and fifth and most recently, the intention of the minister to fire Adrian Measner.
As Mr. Ritter states in his letter, “there must be a better way”. Why can the minister not meet with the board of directors and have an open and frank discussion on the board's future? The Canadian Wheat Board is not some kind of stagnant, top heavy bureaucratic monster, as some critics would have us believe. It is willing, in Mr. Ritter's words, “to grow and stretch and accommodate farmers who want more flexibility”.
For example, at a recent meeting the directors looked at changes that would actually allow small processors to purchase wheat and barley, for human consumption or export, directly from farmers. They also looked at the CWB's policy toward farmer-owned new generation cooperatives that are involved in value-added processing.
The Wheat Board, as we know, also offers a wide variety of producer payment options. Over 17,600 farmers are availing themselves of the opportunity to price their grain themselves through options such as the fixed price and basis payment contract. For this crop year, according to Mr. Ritter, the CWB is putting in place a pilot program called the delivery exchange contract, which would enable participating farmers to match delivery opportunity with their own individual business needs.
The point Mr. Ritter makes in his letter is that change should be a gradual process. These types of changes build on the strength of the Canadian Wheat Board without putting the organization at risk and, most important of all, appear seamless to customers so that the Canadian Wheat Board can be counted upon to continue the high level of service to which they have become accustomed. In effect, Mr. Ritter is calling for an evolution, not a revolution.
All we need to do is take a look at history in general to see that, in many cases, revolutions make life harder and sometimes completely unbearable. Our farmers have been through enough of the difficulties caused by the market and our competitors’ subsidies, especially the United States and the European Union. Up to now the economic effects of such a change have not really been studied or analyzed. However, it is more or less agreed that the Canadian Wheat Board, as we know it, will cease to exist if the single desk is taken away.
Let us take Murray Fulton’s report, for example. What are his conclusions? Here are a few of them.
First of all it will be extremely hard, if not impossible, for the Canadian Wheat Board to survive without a single desk mandate, and it will disappear in the end.
Grain handling and transportation will be comparable in Canada and the United States. But in the United States there is the U.S. Farm Bill, which shelters farmers from market forces. Our farmers, however, would be vulnerable on an open market.
The changes would also be irreversible. It would not be possible to have a free market and later decide or ask to restore the Canadian Wheat Board.
The government often talks about this new Canadian Wheat Board II, which will continue to exist.
Let us recall the facts though. The new Canadian Wheat Board will not automatically have access to the technical resources and personnel of the current CWB. It will be impossible to find the quantities of grain necessary without a grain-handling system. Independent farmers will thus be at the mercy of the grain companies in place. Furthermore marketing power will be transferred to the grain and railway companies. So the farmers will lose their political clout.
If there is no more Canadian Wheat Board, the rail rates will increase. At present the Canadian Wheat Board negotiates the best conditions with the railway companies, but they are not likely to be granted to farmers, and this will give rise to higher transportation costs for Canadian farmers.
Any changes to the present system must be well thought out and based on valid studies that deal with the economic impact on farmers and to Canada, and not political ideology. It is imperative that this takes place before any changes to the Canadian Wheat Board single desk marketing system be made.
As was pointed out earlier, we are in a very competitive international environment. It is no secret, and I and my party have said this before, that our competitors would like to see an end to the Canadian Wheat Board, just as they would like to see an end to supply management.
Underlying this debate, however, is a question that we often do not talk about, and that is of individual rights or the rights of the minority. The question is, should a small group of farmers have the right to bypass the Canadian Wheat Board and sell their wheat and barley on the open market? Knowing that this signifies a possible end of single desk marketing in Canada or the Canadian Wheat Board as we know it, or agriculture as we know it, does this group of farmers have the right to jeopardize the collective system put in place to sell grain on the world market, which the majority of farmers agree to? In my opinion and the opinion of my party, we believe that they do not.
It is easy to go to market choice, which most agree will see an end to the Canadian Wheat Board as we know it. This is why we need good, valid research to look at the effects of such an approach. In other words, to look at a long term vision. Will our farmers be able to compete on the world stage with prices, transportation and markets controlled by the major multinational grain companies, or will they be thrown to the wolves, so to speak, completely at the mercy of the major world players, with no one to stand up for them as they try to negotiate fair prices?
These are thoughts coming from someone who has thought about this, not some kind of left-wing radical talking against the multinational corporations. These are valid questions that I think all of us need to answer. That is why we need a gradual evolution that involves close cooperation between government and the farm-based Canadian Wheat Board.
Mr. Ritter and his board of directors have indicated a willingness to work with the minister to come up with a workable plan. Once this plan is formulated and shows the Canadian Wheat Board's vision for the future, farmers should then have a say. This is what we need, not another revolution.
With the time left, I would like to quote a bit from a letter that was written to the chairman of our agriculture committee by Mr. Ritter. It states:
At the CWB, we have followed the committee's work with great interest. Unfortunately, some of the information that has been placed before the committee has been less than accurate. The CWB would therefore respectfully submit the following for the record.
1. The president of the Western Canadian Wheat Growers' Association (WCWGA), Ms. Cherilyn Jolly-Nagel, indicated in her testimony that the CWB is not offering farmers the opportunity to capture the rally in wheat prices that is currently lending strength to markets. This is not the case. Opponents of the single desk like Ms. Jolly-Nagel often like to compare spot prices in the U.S. in a rising market with pooled values in western Canada. They raise this issue far less often when markets are falling and pooled values are above spot values...If opponents of the CWB's single desk compared the price of select winter wheat with appropriate protein levels to U.S. values, they would see that the two are close, especially when prices available under the CWB's Producer-Payment Options (PPOs) are used...it would follow that farmers would be using the Producer-Direct Sales (PDS) process to access those values.
Another point was raised. The witness stated in her presentation:
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.
This statement is wrong in two respects.
First, prairie grain growers are not discriminated against. They have as much right as Ontario farmers to decide how to market their grain. The Ontario wheat growers chose a free market through the elected members of their board. This decision was not made by the government. Western Canadian farmers, on the other hand, have always elected a majority of single desk supporters to represent them on the board. We saw that just a few days ago. In addition, the wheat producers in Quebec have decided to sell their milling wheat through a single desk system. Prairie grain growers would not be discriminated against unless they were unilaterally denied this right by the federal government.
Second, grain growers who want to sell their product themselves can do so through the direct sales process. This enables them to take advantage of all the premiums available in comparison with the prices that the Canadian Wheat Board could get on similar markets.
It was also claimed that the Wheat Board deprives western Canadian farmers of the opportunity to take full advantage of their skills as good marketers. This is a statement that is quite hard to defend in light of the growing popularity and extensive use of the Wheat Board's PPOs, 3.5 million tonnes committed to the program so far. Grain producers in western Canada now have the opportunity to lock in prices for their crops based on U.S. commodity prices.
The Western Canada Growers' Association often points out that a record number of wheat acres were planted in Ontario in 2006 and then makes the inference that the elimination of the Wheat Board single desk would somehow reverse the trend toward less wheat acres in western Canada.
A farmer's planting intentions are actually determined by a whole host of factors, including: soil conditions, the price of inputs, the price of alternative crops, and management considerations like crop rotation and availability of storage.
It should also be noted that, while it is true that the average wheat acreage in western Canada has decreased 18% from what it was 10 years ago, American farmers who have another system, who do not have a wheat board, have reduced the number of acres they seed to wheat by 21% over the same time period.
Other submissions attempt to blame the CWB for a total lack of investments in value-added infrastructure. Yet in summary, malting capacity in western Canada has tripled since 1985 and 75% of domestic malting capacity is now found in western Canada.
It is clear from the documents provided by the Wheat Board that the Canadian Wheat Board does not impede value-added processing and that it has actually supported real growth in both barley and wheat sectors at rates which compare very favourably to what is happening in neighbouring jurisdictions.
I have read some of the statistics and I have seen that our malting capacity is actually increasing, as is pointed out here, and that our malting capacity is not suffering. There are other reasons why a plant may want to locate in the United States and it has nothing to do with the fact that we have a Canadian Wheat Board.
Witnesses were asked how often oats and canola growers had been the subject of trade complaints from the United States. They claimed that crops not under a single desk system are safe from trade actions. This is definitely not the case, as the pork and beef industries know very well. The lack of complaints about crops like oats and canola has nothing to do with how they are marketed. The real reason is that these crops are not grown very much in the United States and there are no special interest groups pressing Washington to block Canadian imports.
An organic farmer from Saskatchewan complained about various aspects of the producer direct sales process. He said, for example, that he received a bill for having filled a direct sales order that was three times as much as what he had been told initially. The bill that he had received was an interim bill. Although the bill did not mention it, there were still interim payments and the final adjustment to consider.
As we move on and we look at these reasons and counter-arguments presented by qualified professional people in the Canadian Wheat Board, we can see that maybe we are moving too quickly. Maybe we have to stop, think and sit down with the democratically elected board of directors and go over some of these points.
We mentioned studies by the George Morris Centre, by Sparks and by Drs. Carter and Loyns, which were invoked by the House of Commons. We can see that the growth in the wheat processing industry as compared to expansions in oilseed processing. The former is a mature industry with several long established players. Therefore, it is not valid to compare it to the oilseeds sector.
The growth in value added processing in western Canada is said to be lagging behind expansion in other parts of the country or in the U.S., when the opposite is true. They say that the CWB is accused of distorting the domestic prices, when in reality prices to domestic mills are directly linked to U.S. milling prices. There is a failure to recognize that domestic mills, most of which are located in proximity to the U.S.-Canada border, are free to get their wheat from U.S. origins if the CWB wheat prices are too high.
The letter by Mr. Ritter states:
In summary, the findings of all three Alberta-backed studies lack credibility. As a result, their conclusion that the CWB does not provide Prairie farmers with added returns must be questioned. The existence of CWB premiums—a conclusion which both the KFT and grain studies reached—is, on the other hand, corroborated by a very unlikely source, namely the United States International Trade Commission (ITC). In its 2001 investigation into the CWB's behaviour in the marketplace, the U.S. ITC found that Canadian durum prices were higher than American prices in 59 of the 60 months that were examined.
Once again I would like to take the opportunity to thank the member for Malpeque for making this debate possible. It is a critical time in the history of farming in Canada. We have yet to form a long range agricultural policy. I know all parties are working on this right now.
In the meantime, I caution that we must proceed with caution. We should not throw something out that has been around for over 60 years because apparently there is an immediate market gain. What if there is a market gain today and tomorrow there is not? As the Fulton study report showed, this is irreversible.
Thank you very much for allowing me to speak on this very important matter.