Western grain farmers face most challenging year ever

Hey there, time traveller!
This article was published 03/01/2012 (5057 days ago), so information in it may no longer be current.

WILL Prairie farmers pray for rain this year or pray that it stops? Will global grain prices rise or tank? There are always uncertainties for growers entering a new year.

 

But if there is one thing western wheat and barley producers can count on in 2012, it’s that their industry will be under a legal cloud. Court decisions could dictate how they market their grain and, to some extent, even how much they earn.

“It may be one of the most challenging years for the grain industry that we’ve seen in our lifetime,” Doug Chorney, president of Keystone Agricultural Producers, said Monday.

Before Christmas, the Harper Conservatives passed a new law, Bill C-18, to end the Canadian Wheat Board’s sales monopoly, effective Aug. 1. Eight farmer-elected directors who controlled the wheat board’s operations were turfed when the bill became law. Ottawa now effectively calls the shots at the CWB’s headquarters on Main Street.

But those same eight directors will be in Court of Queen’s Bench in Winnipeg Jan. 17 and 18 arguing for an injunction to stop the implementation of the law and restoring the CWB monopoly, until a legal challenge on the validity of the new Marketing Freedom for Grain Farmers Act is heard.

Also this year — a date has yet to be set — Ottawa will appeal a December Federal Court of Canada ruling that Agriculture Minister Gerry Ritz broke the law when he introduced Bill C-18 last fall without first consulting the wheat board or holding a vote of Prairie farmers.

The court cases could determine whether the wheat and barley Prairie farmers plant this April and May is marketed through the wheat board or the private grain trade.

And even if Ottawa’s new legislation survives all challenges, it won’t be clear legal sailing for the federal government. A group called the Friends of the Canadian Wheat Board is contemplating a class-action suit against the Harper government over the removal of the monopoly. The Friends, an organization comprised of farmers, former CWB employees and other supporters, claim Prairie growers stand to lose $500 million a year in returns if the wheat board loses its single desk.

“In all likelihood there will be a lawsuit,” Friends spokesman Bob Roehle said Monday. The decision to proceed will likely be delayed until after this month’s Queen’s Bench hearing, he said.

Also uncertain is what kind of marketing role — if any — the wheat board would continue to play once its marketing might, the single desk, was removed. Ottawa has said the agency will still be in the grain-selling game post-Aug. 1. But it has provided few details on how it would successfully function. The CWB has no grain-handling assets other than 3,400 rail cars.

Farmers are worried what will happen to key grain research and marketing initiatives in Canada without the wheat board steering funds their way. A strong CWB also played a lead role in fighting — and generally winning — battles against U.S. protectionist forces that erected barriers to Canadian wheat and barley exports. Who would carry the ball in future trade battles?

Another issue eating at farmers is who will bear the costs that will inevitably arise from downsizing or mothballing the CWB. There’s speculation a third to one-half of its 400 employees could be laid off within a year.

Farmers on both sides of the debate are making it known they don’t want to be on the hook for staff and other downsizing costs. They’re worried Ritz will be pressured by federal Treasury Board officials to dip into this year’s grain-pool accounts or a $120-million farmer-financed contingency fund to pay such expenses.

“Producers should be given the money that is theirs, and any costs associated with this political decision should be paid for by government,” said Chorney, whose organization has not taken a stand for or against maintaining the CWB monopoly as its members are divided on the issue.

Kane farmer Bill Toews, one of eight former elected CWB directors challenging the validity of Ottawa’s new wheat board legislation, said the now-federally controlled CWB may hold off on staff downsizing until it gets a clearer idea of the legal lay of the land.

larry.kusch@freepress.mb.ca