The dismantling of the Canadian Wheat Board by the Stephen Harper administration is very troubling and likely will adversely affect our grain farmers.
To quote the late Tom Kent, who was an outstanding expert on government policy, “Most economists would acknowledge when there is anything near a genuine market mechanism with considerable numbers of buyers and sellers without collusion on either side and with reasonable access to knowledge of what is going on, then the result will be the most efficient production of what people want and can afford to buy, that is possible in existing social and psychological circumstances.”
Of course even then there could be market failures because of weather, or unanticipated technological changes or speculators who temporarily could alter prices.
What is key there, however, is that there are plenty of sellers, farmers, but much fewer buyers. The handful of buyers usually is very large United States organizations. Hence, what can an individual farmer do to ensure that he is getting the best price for his product?
Inasmuch as thousands of farmers are desirous of selling their crop and there only being two or three large buyers, the sellers are really in a trap.
Furthermore, farmers usually need cash to pay for their outlays; they cannot wait for the most auspicious time to market their production.
Hitherto, the buyer of Canadian wheat was the Canadian Wheat Board so farmers were able to wait for the best possible time to sell their production, centralized by the wheat board. It was more often than not well managed and led to better returns to farmers than if the selling took place on the open market.
Also, with many farmers anxious to dispose of their crop, they would be tempted to lower their prices. Some of the Canadian Wheat Board’s practices could be modified to permit farmers a bit more leeway, but that would be only marginal and would permit things to continue as normal.
Yet, Ottawa seems determined to end the wheat board’s crucial role. Still, there is an obligation on behalf of farmers to see if the government’s plan for such legislation was a good idea.
There was no reference to the plebiscite that was conducted by the wheat board.
Approximately 40,000 farmers participated. Of those 62% voted for the board’s continuing role, and even 51% of barley farmers supported that proposition.
Despite that, the Harper government said, “the game is over,” and the wheat board should gradually phase out its role in the post-monopoly era and “shrivel away.”
Not only was Ottawa ignoring the wishes of a majority of farmers to get the best price and fight off big buyers. Clearly, Prime Minister Harper’s anti-government bias has been carried too far.