Or face the end of food sovereignty in Canada
by Ken Larsen
• While the popular media is full of stories of globalization and its corrosive effects on local communities, most are unaware of the back-story when it comes to the Canadian Wheat Board. In the grain trade, globalization is not a new story. In fact, it pre-dates the settling of Canada’s west by over half a century. The Wheat Board was a uniquely constructive and successful response to globalization created in Canada’s west.
By the time our grandfathers and grandmothers were settling homesteads to grow wheat on the prairies in the early 1900s, the global grain market was already a mature, fully globalized market dominated by just five giant corporations. These privately owned companies, mutations of which still operate today and still control 80% of the tradable grain on the planet, were connected to international commodity markets and the world’s grain growing areas by the telegraph. Through the telegraph, stocks were traded and grain prices set instantaneously around the globe. Faced with these giant grain companies, western farmers found they were powerless to negotiate a fair price for their crops. Farmers saw the idea of collective bargaining through a single-desk Wheat Board as a way to have market power through cooperation and thereby get a fair price.
It was not until 1920s that the first Wheat Board was created. An agricultural depression began at the end of WWI and by 1920 speculation had essentially frozen the futures market pushing the international price of wheat to near zero. The west’s farmers faced financial ruin. Under strong pressure, Ottawa created the first Canadian Wheat Board to bypass the dysfunctional private market. This Board acted as the collective sales agent for the west’s farmers. It sold the crop in an orderly manner directly to customers bypassing speculators and the private trade. The Board was very successful at getting fair prices and was immensely popular among the west’s grain farmers.
Under pressure from private trade, then Prime Minister Arthur Meighen’s Conservative government removed the first single-desk CWB in August 1920. Prices in the west promptly collapsed and Canadian grain flooded into the US. To protect their own farmers, the US closed its border to Canadian grain and cattle in May of 1921. In response, Canadian farmers used their Wheat Pool cooperatives to set up a Central Selling Agency (CSA) in an attempt to create another wheat board. However, without government support they did not have the single-desk mandate needed to create the conditions for true orderly marketing to keep prices stable. Western farmers also defeated every Conservative MP in the west in 1921 and continued to lobby for the return of the single-desk Wheat Board.
By 1935, times were so desperate Conservative Prime Minister R. B. Bennett (a former railway company lawyer from Calgary) finally listened to farmers and passed the Canadian Wheat Board Act. Farmers continued pushing for the federal government to take the last step and proclaim the single-desk provision in the Canadian Wheat Board Act. Mackenzie King’s government finally did so in 1943, a little over 22 years after farmers lost their first Wheat Board and more than 43 years since farmers first began lobbying for a single-desk. The initial price for wheat set by the single-desk CWB was $1.25 per bushel, five cents above the private market. The single-desk was supported by all the Wheat Pools and every major farm group in the west. The single-desk finally gave farmers full control over their grain from the farm gate to the customer; the barriers of the private trade had finally been broken.
In 1998, amendments to the Canadian Wheat Board Act enabled farmers to elect 10 out of the 15 members of the Board of Directors. The CWB, which had always been farmer-owned, was now fully farmer-controlled. In every CWB election, 8 of the 10 directors have supported the CWB’s single-desk. The new directors took an aggressive role when it came to protecting farmers’ interests.
In an attempt to undermine the farmer-controlled organization, the two foreign owned railways slowed grain shipments to the coast during 1996 and 1997 costing farmers money for tardy delivery and lost sales. The CWB responded by successfully suing the two railways, winning $15 million in compensation from CP Rail and an undisclosed amount from CN Rail in 1999.
More significantly, Monsanto and other biotech companies started a process to introduce genetically modified (GM) wheat into Canada, the US and Australia. After consulting its foreign and domestic customers, the CWB opposed the introduction on the basis GM wheat was non-salable – nobody wanted to eat it. Ultimately, the proposal was withdrawn in Canada, but it is still in process in the US and is being re-introduced into Australia now that the Australian Wheat Board, which functioned similarly to the CWB, has been removed.
Trouble had been brewing since 1989 when Conservative Prime Minister Brian Mulroney arbitrarily removed oats from the Wheat Board. Private interests persuaded Mulroney to remove oats in the middle of the crop year, creating a $32 million deficit when the Board’s inventory plunged in value – a deficit that amounted to a windfall for private trade. Brian Mulroney went on to sit on the Board of Directors of Archer Daniels Midland (ADM), one of the five giant grain companies.
It was not long before other private groups were demanding the Wheat Board stop selling durum wheat, used for pasta, so they could process it on the prairies. Not unreasonably, farmers asked why they should effectively subsidize a private business by providing cheap grain. Coincidentally, in 1997, the National Citizens Coalition (NCC) found itself with generous funding to allow its then vice-president and later president, Stephen Harper, to attack the legitimacy of the Board with print and radio advertisements across western Canada. Farmers asked where the NCC was getting the funding for these efforts but Mr. Harper remained tight lipped.
Later, farmers again raised questions when the Commons Ethics Committee hearings held in 2007 heard testimony that former Prime Minister Brian Mulroney and Karlheinz Schreiber had a business arrangement in 1993, which Schreiber at least contended included pasta. Mulroney contended the arrangement was legitimate and private, created later based on a special position he took on the Board of Archer Daniels Midland.
Ten years before the hearings, in October of 1996 ADM was fined $100 million in the US for price fixing and two subsequent books based on those court cases documented how ADM financed farmers and other groups to advance its business interests in grain processing. Naturally, Canadian farmers wanted to know if the Mulroney-Schreiber pasta business included financing the NCC’s attacks on their Wheat Board.
By this time, Stephen Harper was Prime Minister. In November 2007, he appointed David Johnston, now our Governor General, then president of the University of Waterloo, to recommend a course of action. Johnston’s January 2008 report recommended conducting a commission of inquiry restricted to dealings between Mulroney and Schreiber pertaining to matters of legitimate “public interest” and not covered in other inquiries. Harper appointed Justice Oliphant to conduct the inquiry.
Justice Oliphant followed the Schreiber-Mulroney money trail on pasta and wrote: “I have concluded that, whatever Mr. Mulroney did respecting Mr. Schreiber’s pasta business, it was not done as part of the mandate he received from Mr. Schreiber on August 27, 1993. Any work done by Mr. Mulroney in respect of the pasta business was done on behalf of his friend and former colleague Mr. [Elmer] MacKay, as well as a friend of Mr. MacKay’s who was involved with Mr. Schreiber in the pasta business.” (Page 233, Chapter 6: The Agreement, Oliphant Commission Report, May 2010.) (Editor’s note: Elmer MacKay is the father of Peter MacKay, our current Minister of National Defence.)
Within days of the conclusion of the Commission, the Harper government ordered the extradition of Mr. Schreiber, over his objections, to Germany where he disappeared into the penal system.
Mr. Harper and the NCC’s obsession with pasta and where the NCC got the funding to spend so freely on its attacks on the CWB never became an issue before the Oliphant commission and remains a mystery to this day.
During the bi-annual CWB Directors’ Elections, private trade-friendly farmers were encouraged to seek Directorships on the Wheat Board, but farmers consistently rejected such candidates, at least in part thanks to the preferential balloting system. Using that system, farmer-voters are able to rank candidates from first to last. On a preferential ballot, if a voter’s first preference of candidate loses, the voter’s second choice comes into effect. This system ensures that, in elections with multiple candidates, no vote preferences are lost and the winner must have secured 50% plus one to win. Over the years, some contests have been simple two-person elections, but even in those cases, CWB single-desk supporters usually won.
Today, Steven Harper is the Prime Minister and on December 15, 2011, the Conservative- dominated Senate passed Bill C-18, legislation ending the Canadian Wheat Board single-desk and dismissing its farmer-elected directors. The Harper-appointed Governor General gave it Royal Assent the same day.
These actions were done in spite of a ruling by Federal court judge, the Honourable Douglas Campbell, that Agriculture Minister Gerry Ritz had broken the law by introducing legislation to gut the Canadian Wheat Board without consulting the farmer-elected Board of Directors and holding a fair vote among farmers to determine their wishes on the fate of the organization that they owned, controlled and paid for as the law stipulated.
With the passage of Bill C-18, Canadians have a Prime Minister who contends that following the law is optional for his government. Judge Campbell called this “an affront to the rule of law.” There have only been three times since the repatriation of the Constitution in 1982 when a government has implemented legislation the courts have determined is illegal; all three occurred under the Harper Conservatives.
On December 14, in an act of courage and integrity, the farmer-elected directors of the Canadian Wheat Board held a news conference in Winnipeg, announcing they would be challenging Harper’s arbitrary and unlawful use of executive power and would ask the courts to make the Harper regime follow the law. Since C-18 removed them from their elected positions, the elected-directors brought the challenge forward as individuals.
This news conference was reminiscent of another historic news conference held decades ago in Alberta. In 1929, a group of women, prominent among them Irene Parlby, a farmwoman from Didsbury, Alberta, announced they had successfully used the courts to establish that women were persons under the law. This established the basis for our modern system of individual rights. These women were heavily supported by the western farm community and Mrs. Parlby, as a Cabinet Minister in the United Farmers of Alberta government, had its full support.
Like the above-mentioned case, the results of the farmers’ challenge to C-18 will set the course for the future of Canadian democracy. By ignoring Judge Campbell’s ruling and implementing Bill C-18, Prime Minister Harper and his government have shown disdain for the rule of law. This is not how Canadian democracy should function. In his ruling, Judge Campbell quoted Chief Justice Fraser who wrote: “The detrimental consequences of the executive branch of government defining for itself – and by itself – the scope of its lawful power have been revealed, often bloodily, in the tumult of history.”
Farmers from western Canada are now fighting a battle by standing up for Canada’s traditions of community action, democracy and the rule of law. Court cases on this matter will be ongoing in 2012 and farmers could use your financial and moral support.
Donations for this critical court case may be made:
– To Friends of the CWB online at http://friendsofcwb.ca/j/donate
– Cheques may be mailed to The Friends of the CWB, P.O. Box 41, Brookdale, MB, R0K 0G0. – Donations may also be sent to the Canadian Wheat Board Alliance, Box 125, Hussar, AB, T0J 1S0. Please make cheques payable to Canadian Wheat Board Alliance, noting it is for court challenges. There is also a paypal donation button at www.cwbafacts.ca/donate/
For more information, see cwbafacts.ca. Ken Larsen runs a commercial-scale farm west of Red Deer, Alberta, using organic principles to grow barley, non-GM canola and forage crops. A long- time farm activist, he has participated in most of the major farm policy debates in western Canada over the past 25 years. He has numerous publications and articles to his credit and is an occasional commentator on CBC radio. He helped to found the Canadian Wheat Board Alliance.
The Alliance is a politically non-partisan organization of several hundred farmers focused specifically on the Canadian Wheat Board. Members of the Alliance recognize the advantages the Board brings to producers through the single-desk and price pooling, quality assurance through the Canadian Grain Commission (CGC), as well as the important role the CWB plays as an advocate for farmers in transportation, producer cars and on the world stage in trade disputes and negotiations. The Alliance draws memberships throughout the west.
1. Lieber, James B. Rats in the Grain – The Dirty Tricks and Trials of Archer Daniels Midland. Four Walls Eight Windows Publishing: New York, 2000.
Eichenwald, Kurt. The Informant. Broadway Books: New York, 2000.
2. Johnston wrote: “These are concerns about the integrity of high-level government officials. The key issue is the relationship between Mr. Mulroney and Mr. Schreiber that led to cash payments. An inquiry should not be a wide-ranging review of Airbus, Eurocopter, the Bear Head Project or any of Mr. Schreiber’s other dealings.” (Page 22, Report of the Independent Advisor into the Allegations Respecting Financial Dealings Between Mr. Karlheinz Schreiber and the Right Honourable Brian Mulroney, David Johnston, January 2008)