After winning a solid majority in recent parliamentary elections, Canada’s Conservative government has announced plans to introduce legislation later this year to end the wheat and barley export state trading enterprise controlled by the Canadian Wheat Board (CWB) for 76 years.

Agriculture Minister Gerry Ritz said the legislation would take effect in August 2012.

Many challenges lie ahead before such a change can be implemented. As its own leaders suggest, the CWB’s competitive position would be tenuous if it loses the single desk because it does not own grain elevators or port terminals. The CWB will fight hard to retain its monopoly.

U.S. Wheat Associates (USW) recognizes that change is never easy and some western Canadian wheat producers remain very concerned about a shift to market competition and the challenge of selling wheat and managing price risk on their own.

Yet, Canadian producers already market many other crops on an open, non-monopoly basis. Like the growing number of Canadian farmers who also want marketing choice for wheat and barley, USW has long advocated for an open wheat market in western Canada.  

“We are confident the entire global wheat supply chain would benefit from this significant change,” said USW President Alan Tracy. “In that environment, the market would respond more rationally to economic signals rather than react to trade-distorting monopoly pricing decisions.”  

In an open market, western Canadian wheat producers would see more choices and better prices as buyers compete for their wheat. International wheat buyers would also benefit as multiple sellers compete for import business. More competition would, in turn, spur more innovation and market transparency.

Ending the CWB monopoly would likely have a stabilizing effect in the world market because:

• There would be little or no impact on total exportable supplies from North America. The major grain companies that serve the supply chain in the United States and across many parts of the world are established in western Canada. Their names are familiar, with Cargill, Viterra, Richardson and ADM among them. They own the interior and export elevators in Canada and will compete to buy and sell grain.