Farmers for economic freedom

Updates from the Canadian Farm Enterprise Network, Canadian Farmers for Justice and the Prairie Centre. Several of the items appearing here originally appeared in an email list operated by Dwayne Leslie at http://www.prairielinks.com.

The rest love not freedom, but license

By Kevin Avram

It was the Englishman John Milton, who once said that only good men could love freedom. "The rest," he said, "love not freedom, but license." Milton, who wrote the epic masterpiece Paradise Lost, is considered one of the English language's greatest writers. He's been dead for several centuries, yet this simple and insightful truth that he put into words is as valid today as it's ever been.

It could be argued that Canadians who claim to love freedom fit into three broad categories.

The first of these categories is made up of people who see freedom as primarily being the absence of repression. In part, it was the reaction to repressive, authoritarian governments that birthed representative government and democratic societies. The flow of immigrants that have escaped from tyranny over the years also fall into this category.

The second category is made up of those who recognize and embrace opportunity. Genuine lovers of freedom recognize that liberty is the opportunity to use their God-given ability to excel, to be creative, and to build, develop, and turn ideas into a reality. The freedom to worship the Almighty, study, and work in a field of one's own choosing are deeply respected and embraced by such people.

Freedom lovers are developers. They build businesses, communities, strong families, and a strong nation. They are respectful of life. They are thankful for the benefits of citizenship. They understand and embrace responsibility. They are good people.

The third category is made up of the imposters. Like those in the first two categories, they claim to be proponents of freedom. Yet, they are not. Instead, they view freedom and free speech not as a means to do good, or to build in a responsible manner, but as a license to reject authority, morality, and propriety. They believe that freedom is a license to engage in reprehensible behaviour.

People who exchange freedom for license lean toward a type of moral anarchy. They deny the fact that morality and personal responsibility are what protect individual liberty and national greatness. Either through blindness, stupidity, or willful ignorance, they cannot see that the consequences of their own actions are destructive.

Some say that morality, responsibility, and proper behaviour cannot be legislated. They're wrong - half wrong anyway. Governments legislate morality all the time. It's true that a law cannot change a person's identity or the way they think. But it's also true that laws prohibiting theft, robbery, fraud, and a host of other evils are the practical expression of legislated morality.

It's important to note that people who truly do love freedom wouldn't commit these crimes even if there were no laws. They're good people - not because the law makes them behave in a certain manner but because that's the way they are. They really do love freedom. They're people who recognize that the purpose most laws serve is not to control good people, but to restrain the lawless - to hold in check those who deliberately do evil, as well as those who falsely believe that freedom and license are the same thing.

It's worth remembering that a nation which heads down a road that exchanges freedom for license, is a nation that will experience grief. The erosion of national virtue is a slow process. But in the same way that rain can make a rock smooth, and even wear it away, so it is that those who exchange freedom for license, if given the opportunity, can, and will, destroy the virtue of any great nation.

Kevin Avram is a former director of the Prairie Centre/Centre for Prairie Agriculture, and continues to sit as a member of the Prairie Centre's Advisory Board. He currently works as Projects Coordinator for the US organization, Americans in Motion, and makes his home in Grand Island, Nebraska

No ordinary trade dispute

By Craig Docksteader

The truly frightening aspect of the Americans' continuing insistence in challenging Canada's grain trade practices is that few people in Canada appear to be paying serious attention. Just ask any politician or agricultural leader about the matter and you'll pretty much get the same answer: "The Americans will never be happy no matter what we do... they're always complaining." And off they go, grumbling under their breath about having to deal with another supposedly groundless trade dispute.

But while a combative attitude of denial may have served Canada well in the past, the evidence indicates that this time, it likely won't cut it. In fact, there are growing signs that if we don't give ourselves a shake and take a second look at the validity of US concerns, we'll likely miss the opportunity to resolve the issue before it escalates even further.

Contrary to the assumption of many, the Americans' primary trade concern has a fairly solid foundation in reality and is not going to simply go away. That concern is the effect of the monopoly status of the Canadian Wheat Board.

The almost immediate response on this side of the border is to assume that if the Americans are taking issue with the monopoly it must be good for Canadian farmers. Not necessarily so. For starters, nowhere are the Americans concerned that the monopoly is resulting in Canadian farmers getting too good a price for their grain. In fact, it's just the opposite.

Many American cattlemen feel that the CWB monopoly gives Canadian cattlemen (not grain growers) an unfair advantage in the international marketplace by, at times, artificially depressing the domestic price of feed grains. The details are long, a little complicated, and argued back and forth, but this much is indisputable: While American cattlemen must buy their feed in competition with the world marketplace, Canadian cattlemen do not.

While the world price for barley matters a great deal to an American cattleman, it only matters indirectly to the Canadian. What matters to the Canadian cattleman is the price that the CWB is offering to pay for feed barley. With its monopoly on feed exports, if the CWB offers to purchase Canadian feed stocks at a higher price, the Canadian cattleman has to bid against that to get supplies. If the CWB offers to buy at a lower price, the price for Canadian cattlemen goes down as well.

This ability to artificially manipulate domestic feed prices concerns the Americans. It means that, at times, Canadian cattlemen have access to cheaper feed than their American neighbours, subsidized by lower returns to Canadian grain growers. Former CWB commissioner, Ken Beswick, suggested that in one year alone, this practice cost Canadian grain growers as much as $180 million in lost income.

The Americans' concern about wheat prices is similar. They're not complaining that the Canadian price is too high, but that the monopoly buying position of the CWB allows it to undercut the going market price. With a captive supply of product, the CWB does not have to earn its business and therefore operates without any commercial risk. It can arbitrarily set its prices low in order to gobble up market share. This cuts into returns for both American and Canadian grain growers.

Politicians and trade negotiators who think this issue is just going to go away are dreaming. This is no ordinary Canada-US trade dispute. For years, popular support for the monopoly has been slipping, as producers call for a voluntary CWB. Now we are witnessing the spectacle of our federal government trying to defend its international trading practices abroad while support for the same policy is crumbling back home.

The irony has not escaped the Americans.

Another kick at the can

By Craig Docksteader

It's been happening quietly, but the push is underway. Mark Hlady, a backbencher in the Alberta government has introduced a private members' Bill called the Alberta Wheat and Barley Board Act. Having passed first reading in late February, the Bill is expected to reach second reading before the end of March. That's when the debate will start in earnest.

In many ways it's an unusual Bill. For starters, what would Alberta want with another marketing board? Alberta is not big on marketing boards of any kind. In a study commissioned by the federal department of Agriculture which was released late last year, Angus Reid found that only twenty-six percent of Alberta grain farmers strongly favored using marketing boards instead of marketing their commodities on their own. The average support by all Alberta farmers was even lower, coming in at twenty-two percent.

Unlike most marketing boards, however, the primary purpose of this one is to increase the marketing options available to farmers, rather than diminish them. Under the new Act, Alberta grain farmers would be able to choose between selling through the Alberta Wheat and Barley Marketing Board, or the Canadian Wheat Board.

Currently, federal law requires that all wheat or barley grown on the prairies which is destined for export or human consumption must be sold by the Canadian Wheat Board. The only exception to this is to do a "buy-back". If a farmer has his eye on a better market, he can drive up to an elevator, "sell" his grain, and then "buy" it back again. But there's a catch. He buys it back at a higher price than he sold it for. And, he must pay all the costs to get the grain to port, even if it will never go there. Not surprisingly, few farmers utilize this option.

An Alberta Marketing Board would attempt to change this for Albertans. It is intended to operate with minimal administrative costs and would sell back to producers with only a small administrative fee. In addition, it would be subject to the Alberta Freedom of Information Act and would be automatically dissolved if the CWB ever became voluntary.

Precisely how far the proposal goes rests largely on how much support it gets from Alberta MLAs. If they send a unified message to Ottawa, the impact will be greater. If they end up squabbling over details the impact will be blunted. While some will undoubtedly have difficulty stomaching any kind of additional regulation in the grains industry, others are convinced that one marketing agency is better than two. The pros and cons will be debated extensively.

But the biggest obstacle to seeing the Bill become law, is the expectation that it will be declared ultra vires. That means even if it's passed by the Alberta legislature it could fail to become law because it conflicts with existing federal legislation. The rule is, when there's a conflict in an area under federal jurisdiction (such as exports), federal legislation trumps provincial legislation.

But whether the Bill becomes law or not, it could have a number of positive effects: It could raise awareness that the current system promotes the export of raw grain while discouraging value-added industries on the prairies; it could hilight the fact that Ontario's milling industry has grown while the prairies have been stifled by the CWB monopoly; it could draw attention to the fact that while Ontario has a provincial marketing board, it's forbidden on the prairies; and, it could reinforce the fact that the CWB should also be subject to Freedom of Information legislation such as the federal Access to Information Act.

The one thing it will do, is once again make the point that farmers want and need marketing choices. In the quest to see this become a reality, it's another kick at the can.

Finding common ground

By Craig Docksteader

In the midst of all the wrangling over Justice Estey's recommendations for the prairie grain transportation and handling system, there's one thing everybody appears to agree on: Competition is good.

There's significant controversy over changing the railway rate cap, eliminating the Car Allocation Policy Group, and taking the Canadian Wheat Board out of transportation and handling. But when it comes to the value of competition, there is only unanimous applause.

The Canadian Wheat Board agrees, the commodity organizations agree, the governments of Manitoba, Saskatchewan, Alberta and British Columbia agree, the grain companies agree, the left-wing academics agree, the right-wing academics agree, the rail companies can't deny it, and farmers support it: Competition is good because it gives you options, enabling you to be satisfied that you're getting the best value for your money. The result is greater efficiency, lower costs, better service and improved allocation of resources. A lack of competition, however, means somebody can take you to the cleaners and there's nothing you can do about it.

Concerns about this very issue have dominated the grain transportation, handling and marketing system from early on. As soon as elevators started being built on the prairies, producers found that the railways would not spot cars for them at points where an elevator already existed. The lack of competition in transportation left them captive to whatever the railway decided. Failure to resolve the issue eventually led to the first Royal Commission on transportation in 1899.

On the marketing side, rumours abounded of farmers getting shafted by grain companies. Without the communications infrastructure that we enjoy today, a farmer could leave home with a wagon-load of grain, only to get to the elevator and be informed that the price had dropped from the previous day when his neighbour hauled a load. At that point, his hands were tied. With no other marketing options, he could either accept the price being offered or take his grain home -- in which case he made the day-long trip for nothing.

In large part, it was the backlash against this lack of effective competition that played a dominant role in shaping the prairie grain industry: It gave rise to the cooperative movement as farmers banded together in an attempt to find protection; it set the stage for a prolonged romance with excessive government regulation, as producers opted for legislative solutions in the absence of viable competition; and it instilled a deeply-rooted fear of the open market into a good chunk of the prairie farming community.

In the controversy surrounding Estey's recommendations, it might be beneficial to recognize that there is more common ground than first impressions would suggest. Most farmers are really after the same thing. They want the best price for their product, a future for their farm and security for their family. They'd like to see some kind of return on their investment, and at the end of the day, have something to pass on to the grandchildren. The major differences are not about objectives, but how to achieve them -- about methods.

That's why consensus on the importance of competition is so significant to reforming the grain transportation and handling system -- competition is not an objective, but a method. Consensus on this issue provides a foundation from which to pursue constructive reform and a common basis upon which to evaluate the merits of proposed changes.

If properly implemented, introducing effective competition into the system has the potential to address the concerns of farmers on either end of the ideological spectrum. After all, neither dual-market advocates, nor defenders of the status-quo like being forced to do business with monopolistic corporations that can dictate prices to farmers.

Craig Docksteader is Coordinator with the Prairie Centre/Centre for Prairie Agriculture, Inc. "Where Do We Go From Here" is a feature service of the Prairie Centre.

Prairie Centre/Centre for Prairie Agriculture, Inc.
#205, 1055 Park Street
Regina, SK
S4N 5H4

Phone: 306-352-3828
Fax: 306-352-5833
Email: prairie.centre@sk.sympatico.ca

Farmer loses case over illegal export of wheat to U.S.

A Saskatchewan farmer, who argued that the federal wheat board's monopoly control over the export of wheat and barley in Western Canada is an abuse of his property rights, lost his case at the Manitoba Court of Appeal.

"We'll appeal to the Supreme Court and see what they have to say about it," said David Bryan on February 6.

"If the federal government can basically come in and trample on property rights any time they want to, what protection does that provide anybody?"

His fight is being funded by the National Citizens' Coalition, an independent citizens' group whose motto is: "More freedom through less government."

Mr. Bryan, 37, who farms in Central Butte, Sask., was arrested in 1997 for hauling his grain to the United States to sell it himself.

This is illegal. Under the Canadian Wheat Board Act, Western farmers who want to sell their wheat or barley outside Canada or even to another province, must sell it to the board, which pays a uniform price to all farmers.

If a farmer wants to export grain himself, as Mr. Bryan tried to do, he must buy his own wheat back from the board -- at market prices -- first.

In 1997, Mr. Bryan refused to do this. He was arrested and spent five days in jail. In 1998, he was convicted of breaking customs laws, fined $9 000, and given a two-year suspended sentence.

At the Court of Appeal, Mr. Bryan argued that the wheat board deprives him of his constitutionally protected right to control his own property, as set out in the 1960 Canadian Bill of Rights.

But the Bill of Rights has been largely superceded by the 1982 Charter of Rights and Freedoms, which contains no such provision.

"There is no constitutional dimension to the question before us," reads the judgment from the Manitoba Court of Appeal.

It upheld an earlier decision that the Canadian Wheat Board Act falls within the powers of the federal government to regulate trade and commerce.

"I think it sends a message that if you want to support property rights, don't go to the courts; elect a government that will do a better job of protecting property rights," said Ted Morton, a professor of political science at the University of Calgary.

Call for trade assault on wheat board by North Dakota

The North Dakota Grain Commission is calling on the U.S. federal government to mount an all-out trade assault on the Canadian Wheat Board at the next round of World Trade Organization negotiations.

In a strongly worded paper now circulating among Canadian farmers, the North Dakota Grain Commission accuses the CWB of needless price cutting in world markets, a practice the commission claims cuts Canadian farmers' revenues and increases pressure on them to seek better prices in the United States.

The paper, titled Grains of Truth About U.S.-Canada Wheat Trade, was released in February.

Citing data from Canadian and U.S. academics and agencies, it asserts that prices offered to farmers for spring and durum wheat have been markedly higher in U.S. border states than on the Canadian Prairies for the past 15 years.

The paper fingers two main causes. First, despite indirect transportation subsidies, Canada's grain handling system is plagued by much higher costs. Second, it accuses the CWB of underselling its competitors in world markets.

The CWB claims its control over the $6-billion-a-year Canadian grain export trade gives it the market power to increase world grain prices as part of its mandate to maximize returns to farmers.

"The board's effectiveness has been overrated," Neal Fisher, administrator of the North Dakota Grain Commission, said in an interview yesterday. "We have considerable evidence that in many markets where we compete against CWB wheat abroad, the CWB issues standing offers of 50¢ [US] per bushel less than comparable U.S. wheat."

The commission alleges the CWB's practices drive down Canadian farm-gate prices. The resulting cross-border discrepancy of up to $1.40 (US) a bushel (or 30 per cent) has prompted Canada to flood the United States with grain.

Canadian grain shipments to the United States are a continuing source of friction. U.S. farm groups repeatedly stage symbolic blockades at border crossings.

Now, said Craig Docksteader, executive director of the Prairie Centre for Agriculture, an anti-CWB research organization, U.S. opposition is shifting from "grassroots activism" to a more organized strategy to go after the CWB through legal channels. "The North Dakotans have accurately pinpointed the CWB monopoly as the key source of grain trade aggravations between the two countries."

"As we go forward in the fall WTO round, I think export monopolies like the CWB need to be looked at," said Fisher. "The EU's subsidy program is at least transparent. The CWB's is different; there's no price disclosure whatsoever, and that's something we need for free and fair trade."

The U.S. suspended its Export Enhancement Program in 1995, said Mr. Fisher, and is now trading grain fairly and openly. It's time Canada did the same.

Charlene Barshefsky, the U.S. trade representative, has said going after state trading enterprises is her top priority, and the CWB will be foremost on her hit list.

Canadian sources, however, downplay the threat. "The North Dakota Grain Commission's mandate is not necessarily to see free trade work," said Rick Steinke, the CWB's marketing manager for U.S. sales. "We are trading within the rules that have been set out within the Canada-U.S. and North American Free Trade agreements. We have no intention of changing our practices."

"The U.S. Senate has never been able to substantiate its allegations," said John Embury, press secretary to Ralph Goodale, the minister responsible for the CWB. "The CWB now operates similarly to the Americans' own system, so we think trade action would stand less of a chance now of succeeding than before."


The CFEN needs your help! The battle against the Canada Wheat Board can only continue with your support.

Canadian Farm Enterprise Network
Box 521
Central Butte, Saskatchewan
S0H 0T0
CANADA

Write the following and demand free market rights for Western Canadian farmers!

The Canadian Wheat Board
423 Main Street
P.O. Box 816, Stn. M.
Winnipeg, MB
Canada
R3C 2P5

Telephone: (204) 983-0239 / 1-800-ASK-4-CWB
Fax: (204) 983-3841

Email Address: cwb@cwb.ca

Ralph Goodale
Minister Responsible for the Canada Wheat Board
Department of Natural Resources Canada
21 - 580 Booth Street
Ottawa, ON
Canada
K1A 0E4

Telephone: (613)996-2007
Fax Number: (613)996-4516
Email Address: rgoodale@NRCan.gc.ca




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