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Article: Supply Management Threat
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SUPPLY MANGEMENT THREAT - Jon Radojkovic
The Canadian Wheat Board and the Dairy Farmers of Ontario have a lot in common. Both were formed by an act of government to make a level playing field for all producers so that farmers would benefit the most from a sometimes volatile market. This all may change soon as the Canadian federal government is trying to create a dual marketing system out west, sideling the CWB to an external role. And what is most troubling to DFO board member Bruce Saunders, of Chatsworth, is that the federal government is doing this without CWB's 85,000 members taking a vote on this matter.
"They (Conservative government) are consulting with one group only, the one that wants dual marketing," said Saunders.
When debate began in the House of Commons in June on Bill C-300, to create a dual market for wheat and barley (introduced by Gerry Ritz, a Conservative MP from Saskatchewan) all three opposition members made a clear link between the CWB and supply management, that is, once the CWB is eliminated the same arguments will be used to get rid of supply management.
Should milk, chicken, egg and turkey producers be alarmed in Ontario? Here's what a US trade magazine, Inside US Trade, that provides news about US policy making, has to say about this. " Canada's government has launched an effort to revoke the monopoly power of the Canadian Wheat board, something US producers, members of Congress and the Bush Administration have been trying to do for years at the World Trade Organization."
"What stops us from being next," asked Saunders.
The Canadian Wheat board was organized in 1935 as a pooled selling system that benefits farmers by ensuring a predictable cash flow, much like the DFO, formed in 1965, and other supply management organizations in Ontario. Both organizations were formed because both products on the open market were not giving farmers adequate returns for their labour and investments.
The US has been intent on challenging the 'monopoly' of the CWB over pooled selling of wheat and barley but the World Trade Organization ruled in 2003 that the Wheat Board was a producer marketing body and not a system for government subsidy. In fact Canadian CWB producers have almost no government subsidy while their American and European Union counterparts are heavily subsidized.
A dual marketing system or one side selling on the open market, within the dairy industry in Ontario would not work for the farmer, according to Saunders. "This would not benefit DFO members," he said. The price for dairy farmer's milk could not be set and an oversupply by those not in the DFO would lower prices drastically. In other words the processors of milk would buy from the cheapest source and then the large grocery chains would lower their prices accordingly, while keeping the same profit margin, thereby leaving farmers with the cut in prices.
There is in Ontario a dual wheat marketing system already. Because of this the argument for the dual system goes that this type of system already exists, where farmers have a choice between selling their wheat themselves, or through the Ontario Wheat Producers' Marketing Board and should be introduced out west. The Canadian Wheat Board acknowledges that Ontario farmers have more flexibility in choosing how to market their wheat, but point out this does not necessarily lead to higher profits.
Farm organizations have rallied behind the CWB. "The federal government does not have the mandate to weaken the effectiveness of the CWB," says National Farmers Union president Stewart Wells. Canadian Federation of Agriculture president Bob Friesen said the federal government is "putting the cart before the horse," because of its intentions of creating a dual system before farmers have even decided what they want to do.
Many western farmers were incensed when the federal Conservatives held meetings behind closed doors recently with only those that wanted the dual system, which also included those who would most profit by it, namely multi-national corporations such as Cargill, Bunge, Louis-Dreyfus and Agricore United. The fact is five giant companies control 80 percent of the world grain trade.
"How can anyone seriously think that a voluntary CWB, stripped of its export monopoly and uncertain of its ability to source the quality and quantities of grain needed to fulfill its sale commitments, will be able to effectively compete to-to-toe with these huge companies," said Terry Pugh, an NFU member.
Supply management farmers in Ontario are still what most other farmers point to as a way, and perhaps the only way, to achieve a stable and reasonable income from their work, something most other workers and professionals in Ontario, take for granted.
Saunders says the DFO board has not officially talked about the threat to supply management posed by the possible dismantling of the CWB, but unofficially it's talked about in the hallways and lunchrooms. "In a philosophical sense we (the DFO and CWB) are very related and we are monitoring the situation out west."
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