Tories decide to price their CWB policy

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This article was published 12/08/2011 (5486 days ago), so information in it may no longer be current.

The federal government is preparing to study the financial impact of a decision it has already taken to strip the Canadian Wheat Board of its monopoly on Prairie wheat and barley sales.

The revelation has led to more accusations that the government’s move, which could alter the prices farmers are paid, has been driven more by dogmatic principle than by evidence.

“This underscores everything we’ve been saying about this being based strictly on the Conservatives’ ideology,” Manitoba NDP Agriculture Minister Stan Struthers said Thursday.

“You would have thought, if this was based on any kind of a plan, that (the study) would have been done by now and would have formed part of their decision-making.”

Agriculture and Agri-Food Canada is preparing to spend between $500,000 and $1 million to have outside auditing firms look over the wheat board in two studies during the next two years.

The audits will tally the wheat board’s assets and liabilities and examine whether financial transactions have been accurately reported “in order to determine the potential financial impact of the repeal of the Canadian Wheat Board Act and the dissolution or winding up of the CWB,” according to department documents released Thursday.

Prairie farmers have been forced to sell wheat and barley through the board since the 1940s, when producers banded together to get better prices. The board of directors is largely made up of elected producer representatives. The federal government also appoints board members and federal legislation governs the agency.

The Conservatives have long promised to end the board’s monopoly and allow farmers to sell grain to whomever they choose, but were prevented from doing so until this year when they achieved a majority government.

Agriculture Minister Gerry Ritz, who was not available for interviews Thursday, has said he is simply giving farmers a choice to seek higher prices in an open market, one in which the board would have to compete. He plans to end the board’s monopoly by August 2012, and the plan is supported by many farmers.

But Struthers and other supporters of the board say it cannot survive in the open market because it has no rail lines, elevators or other big pieces of infrastructure. It would have to buy those facilities or buy access from its competition — grain companies that would have no reason to help the board.

Manitoba’s NDP government has been especially vocal in opposing the federal government’s plan, arguing the demise of the wheat board would result in hundreds of job losses at the board’s headquarters and at the Port of Churchill, where the board is the primary customer.

“A new organization might be created, but it would require a fair amount of assistance from the federal government for that to happen,” Allen Oberg, the board’s chairman, said from his home in Forestburg, Alta. “The wheat board has never had any physical assets because it’s never operated as a grain company; it’s merely a marketing agency.”

Oberg said the board has already done its own analysis of the costs of shutting down, using accounting firm KPMG. “The wheat board doesn’t cost the Government of Canada anything,” he said. “Now, the government is going to be stuck for costs of windup in the hundreds of millions.”

The costs, he says, would be typical of closing any large corporation — penalties for cancelling contracts, employee severance and payments for outstanding pension liabilities.

 

— The Canadian Press