I would certainly like to thank the committee for inviting me to speak to you today.
As many of you know, this is my second tour of duty at the helm of the Wheat Board. I took on the challenge of leading the organization at this crucial and controversial time because I thought I could make a positive contribution to the Wheat Board's operations and marketing efforts. I believe in the board and the important role it has in maximizing farmers' returns. I believe in the Wheat Board as a major world-class supplier of wheat, durum, and barley to the global grain trade.
I indicated at the time of my appointment that my intention was to stay out of the politics of the single desk. My focus as interim CEO was going to be, and has been, to sell grain and to make sure that the organization runs smoothly. I have not strayed from that original commitment, nor will I stray from it today. However, when factual inaccuracies about the Wheat Board's performance find their way into a public forum, I believe it is my right and duty to correct that information. One example of such an inaccuracy relates to the Wheat Board's business relationship with Algeria. And I understand that this is one of the main reasons why I was called before you today.
A number of parties, including some members of Parliament, have recently stated publicly and in printed material that the Wheat Board has been underselling the market for durum wheat. This information is not factual and appears to have originated from material circulated by the U.S. Wheat Associates, a long-standing critic of the Canadian Wheat Board.
Canadian Wheat Board directors have access to detailed sales information on a regular basis. Through this process, the directors can assure themselves that the Wheat Board is in fact obtaining fair value in relation to the values available to its international competitors. The mandate of the board is to maximize returns to producers and to develop strong and sustainable relationships with its customers around the world. By continually monitoring sales performance, the board of directors can determine whether CWB management is in fact meeting those objectives.
I would like to state unequivocally that sales of durum to Algeria have been made at competitive market prices that are not discounted or low. Our client in Algeria, the OAIC, has confirmed that fact, as do regular CWB sales reports that are reviewed by the board of directors.
There have also been accusations that the board is underselling the market compared to what is being achieved by Ontario farmers. It's been suggested that as of late January, an Ontario farmer selling hard red spring wheat with 13.5% protein would receive $5.50 per bushel, whereas a grower on the prairies selling number one CWRS would receive about $4.40 per bushel, approximately $1.10 less, as a final pool return. The implication is that this suggests poor performance by the Wheat Board. That implication is incorrect because of several errors in the comparison.
To begin with, the article compares a spot price, the Ontario price, to a pool value, which is the Wheat Board pool return outlook. This is a misleading comparison. A pool value is, by definition, an average of prices achieved over an entire crop year. In a rising market, such as we have experienced so far this crop year, a spot price is always higher than a pooled price. Is the Wheat Board selling wheat at those high Ontario values and returning those dollars to farmers? Yes. In fact, Wheat Board values are even higher.
The source of the spot price of $5.50 per bushel is not indicated, but it is undoubtedly a price at or near an Ontario mill. An appropriate comparison would therefore be the current price of, let's say, Saskatchewan wheat landed at an Ontario mill. On February 5, the Wheat Board offered eastern mills number one CWRS with 13.5% protein for $230.47 per tonne at Thunder Bay. Add to this freight charges of $25 from Thunder Bay to the mill, and the landed price equals $255.47 per tonne, or $6.95 per bushel.
The comparison, then, is between $5.50 per bushel of hard red spring wheat to the Ontario farmer and $6.95 to the Saskatchewan farmer. The truth, therefore, is the exact opposite of what has been contended.
The $6.95 per bushel would be added to the pooled payments that western farmers receive for wheat sold throughout the 2006-2007 crop year. However, if the farmer decided to price his wheat through one of the Wheat Board's producer payment options, he or she could have locked in prices right around the $240 per tonne mark. Backed off to a Saskatchewan location, this would have translated into returns of approximately $5.20 per bushel.
To make the comparison even more valid, the price available to the Ontario farmer would also have to be backed off for freight, cleaning, and elevation. Therefore, the posted price of $5.50 per bushel might in fact translate into a farmgate price very similar to what spot prices available through the Canadian Wheat Board are, and this is in spite of the huge freight disadvantage that prairie farmers face relative to their Ontario counterparts when serving eastern markets.
Making inaccurate statements about sales values and our relationship with specific customers is damaging to our business, and as a consequence is damaging to western Canadian farmers. This is about business; it's not a political debate. I believe very strongly--as the Canadian Wheat Board's entire board of directors believes very strongly--that any criticism of the Canadian Wheat Board should be based on fact, not on innuendo circulated by Canada's competitors.
The marketing of prairie wheat, durum, and barley is a business and a very competitive one. At the Canadian Wheat Board we believe that farmers' financial interests should come first. It's my sincere hope that in the future, efforts will be made to verify information of this nature with the Canadian Wheat Board prior to use and dissemination. Whatever political controversy surrounds the Canadian Wheat Board's single-desk mandate, it should not prevent the flow of accurate information between the Canadian Wheat Board and the federal government.
At this time, I'd like to make a few brief comments on our marketing efforts to date. As you may know, earlier this week the Canadian Wheat Board unveiled its price projections for the upcoming crop year at GrainWorld. While it's still very early, we're forecasting malting barley returns to be over $30 per tonne higher than the current year's prices due to tight supplies and steady demand. High-quality durum and milling wheat values are also up over the current year.
Shortly after being appointed to my position, I communicated with farmers that the Canadian Wheat Board was ahead of target in marketing wheat and barley. I'm pleased to say that's still the case. However, our ability to deliver on the sales that we've made is in serious jeopardy. I would be remiss if I did not mention to the committee the urgent situation we are facing as a result of the CN strike, which compounded earlier movement difficulties on CN and CP lines.
Since farmers are captive to Canada's two major railways, any significant delays in the system often result in farmers paying penalties for delaying the loading of ocean vessels. During the strike, farmers are paying a few hundred thousand dollars a day. What we don't see as a line item in our financial report is the damage these delays cause to the farmers' reputation as a reliable supplier of the high-quality product for which they're so well known.
When the CN strike first occurred, we very quickly urged the government to intervene and impose back-to-work legislation. When we make those urgent requests, we're not crying wolf. Stoppages like we've just experienced, combined with the ensuing delays that will occur as the system ramps up once more, are untenable for farmers. We need the government to look seriously at this issue.
That, Mr. Chair, concludes my comments. Thank you.
I certainly would welcome any questions that the members of committee might have.
Western Canadian farmers are just asking for the same opportunity that farmers across the rest of this country have. The committee has worked hard on some of those issues to grant that. I think of the recommendation that we made on KVD a few months ago in our report. It was interesting because it was relevant. Again the other day we had a report out of Saskatoon where plant breeders are saying, “That needs to go ahead or we might as well be setting our breeding programs aside”. So the committee has done some good work in those areas. We've all worked hard to make things work for farmers.
One area that we believe is important for farmers is the right to market their own products. And we've worked long and hard for western Canadian farmers to try to bring market freedom to them.
I want to give a bit of my history on this. I am a farmer in western Canada. We were farming in the early 1990s. We had a frost one fall, so the grain went from good quality to feed quality. The Wheat Board informed us that they really couldn't move that quantity of grain that we had on hand. So we started looking around, trying to find a place where we could market the grain. We were able to go to Great Falls and to find one of the big elevator companies there that would buy the grain. We began to make plans to move it across the border. We had to do the Wheat Board buy-back in order to do that. So you have to give the Wheat Board your sales information when you make those agreements. We did that. Then we got a call from the buyer in the United States saying “Sorry, we don't need your grain. We found a cheaper way to get it.” We actually watched trucks drive out of our own elevators locally and followed them across the border and watched them unload across the border in the United States. Now the price that we received was about 80¢ a bushel less than what we had arranged for ourselves.
So that really began, in lots of ways, to focus farmers on the fact that they could actually do their marketing as well as anybody else could do it for them. And in our area, it actually encouraged people to move into a lot of other crops as well. We used to just grow all wheat and durum. I would say in our area now, it's probably about 50% wheat and durum, and the rest are specialty crops. We grow just about everything.
I don't know the numbers. Mr. Arason today says we should trust him. I've heard for a long time from the Canadian Wheat Board that we should just trust them on their numbers and that everything is okay. I know the figures on only some of the sales, and I know there is a discount on them for farmers.
Our policy has been clear over the last few years: we want to bring choice to western Canadian farmers. We don't have any intention of eliminating the Canadian Wheat Board, in spite of the rhetoric that you might hear from other sides. There are people who argue that the board can't work in a voluntary system; it's just not possible. I just want to read a little something that someone wrote up for me. It's somebody who knows a lot about this.
It's hard to know what to make of the CWB's claim that they cannot survive as a voluntary marketing agency. It would appear that they are either insincere, incompetent, or ignorant: Insincere because they know better but aren't saying; incompetent because they truly can't figure it out; or ignorant because they are unaware that prairie farmers already accomplished this feat in the 1920s.
Consider this: In the 1920s, farmers had no fax machines, no cell phones, no computers, and no Internet. They had no paved roads, no large grain trucks, and...no super-B's. They owned no terminals, no rail lines and, as of yet, no elevators. Yet under these conditions, they decided to form a voluntary wheat cooperative known as the prairie wheat pools.
The very challenges that the CWB says it cannot overcome were confronted and solved by farmers in the 1920s.
No elevators? No terminals? No problem. Existing elevator owners recognized they would be passing up business if they sniffed at the pools. Deals were struck to move pool grain.
Open market price higher than the pooled price? No big deal. Multi-year contracts were the solution. And when challenged in court, the contracts stood up. Problem after problem--confronted and solved by prairie farmers. In the 1920s.
It wasn't until the combination of the 1929 stock market crash, falling commodity prices and bad business decisions by management that the pools went broke and had to be bailed out.... Until that time, they had been growing and handling over 50 per cent of the prairie wheat crop. It was a voluntary pooling system that worked.
The quote from Vernon Fowke in his book The National Policy and the Wheat Economy says,
The pools represented a producer-owned and producer-controlled alternative to the open market system for the disposal of Canadian wheat. They were the first cooperatives to aspire to this position in the Canadian grain trade.... From 1923 to 1931 the open market survived as an alternative channel for the disposal of Canadian wheat in competition with the pools.
I would say that it's dishonest to say that the Wheat Board cannot survive as a voluntary wheat-marketing agency. It's already been done successfully. If the Wheat Board can't keep up to farmers in the 1920s, then I would suggest that they really probably do have a problem.
We've moved to bring farmers choice. To do that, the minister has moved ahead with a plebiscite that has three clear questions on it. I think every farmer understands those questions. They're very similar to the questions that are used on the Canadian Wheat Board surveys. So when they do their surveying, they--
We have put in place a plebiscite with three clear questions. Farmers understand these questions, because they're virtually the same questions that the wheat board uses on their own surveys. Those questions are the following. Do you want to have the Wheat Board marketing all your barley? Do you want a system where you have choice in marketing, with the Wheat Board as one of those choices? Do you want a system where the Wheat Board is not permitted to market barley? We've sent those out, and people are returning them already. It's clear that they have an interest in participating in this plebiscite.
I should point out that the Canadian Wheat Board is a government entity. It exists because of government legislation. We were reminded of that a couple of weeks ago when Mr. McCallum in the House asked a question and referred to the Wheat Board as a government entity, so I think it's pretty clear that even the Liberals understand that.
Farmers and others know the Wheat Board exists because of government legislation, which is the Canadian Wheat Board Act. Some of the good news that farmers have coming is that on April 1, the access-to-information provisions are going to apply to the Canadian Wheat Board. I know there are a lot of people who are looking forward to that day, because they'll be able in some areas finally to discover what's been going on behind what they would see as a veil.
It's been our position that the Wheat Board must be focused on selling grain, not politicking, and we hope this is what they will do and expect it is what they will do in the future.
We have a discussion today about Algeria, and I want to talk about that a little, because Mr. Arason didn't tell quite the whole story. The U.S. Wheat Associates were not the ones who basically brought this forward. The whole discussion about Algerian grain prices came out of a December 17, 2006, article in an Algerian newspaper called La Liberté. I can make copies of it available to you. This is the one that's from the Canadian Wheat Board site; it's their translation. I just want to read from it.
According to the general director, Mohamed Kacem, of the OAIC, the bureau's choice of Canada as sole supplier is based on a number of objective factors that mean, and this is a quote:
Algeria gains a lot in every respect from this time-tested relationship that is built on confidence. It’s the Canadian government that guarantees the quality of the product, since it carries out the quality controls, emphasizing that selling prices in Algeria are carefully studied, since our country receives preferential prices, which save Algeria tens of dollars per tonne purchased. And quality monitoring allows Algeria to save over a dollar per tonne processed.
Further down it says:
However, the benefits of doing business with Canada do not end there: according to Kacem, Canada also provides technical assistance in the form of training for executives from the OAIC and the agricultural sector. In addition, the Canadian supplier pays the loading costs, and facilitations are offered with regard to the method of payment.
And this is a direct quote from him: “No other country offers us these advantages.” Clearly the Algerians are getting some sort of special deal.
We need to recognize four things, I think: first of all, that Algeria is getting a special dea--that's what was clear in the article; secondly, this special deal saves them apparently “tens of dollars per tonne purchased”; three, on top of the special pricing they get, the Wheat Board pays Algeria's loading costs; and fourth, they don't get the same deal from any other country but Canada.
I think farmers need to be aware of that. It's a good deal, apparently, for Algeria, but it may not be as good a deal for prairie farmers. But prairie farmers have no way of finding that out. Because these figures are hidden, there's no way we can determine whether it's a good deal or not.
I was struck by the fact that the Wheat Board had a number of their foreign customers line up to support the system. And when we see things like this, I guess it isn't a surprise that foreign customers would be happy to say we need to keep the system the way it is. In my estimation, as a western Canadian producer, this is just one more reason to give farmers choice in whether they want to deal with this system or not.
I'll think I'll stop there, Mr. Chair, and I'll be glad to answer questions.
:
Okay. I hope that doesn't come from my time, Mr. Chair.
Thank you, gentlemen.
Mr. Arason, you're in an interesting dilemma. You're the new CEO, appointed by the government, after the previous CEO, who had the full confidence of the elected board of directors, was fired by the government for being honest and spelling out the facts about the Canadian Wheat Board.
I will say, having seen you in the position previously, that we do have confidence in you as CEO.
The remarks you made are very worrisome, in that I think, as we've seen from the parliamentary secretary's statement.... You say in your submission to us today that a number of parties, including members of Parliament, have recently stated publicly and in printed material that the Canadian Wheat Board has been underselling the market for durum wheat and as it relates to Algeria as well.
Has the minister's office, which would include the parliamentary secretary, requested the proper information and documentation from you in terms of your pricing regime? I know that it has to remain confidential for commercial reasons, and it puts you in a bind that you can't go out there and actually publicly say what you receive, but has their office requested information from the Wheat Board? Or have you provided it?
Thank you for your evidence, gentlemen.
Mr. Arason, you're becoming President and CEO of the Canadian Wheat Board at a time when we're in the eye of the hurricane. It has to be said that the Conservative Party of Canada — and the Canadian Alliance before that — had determined long ago what it wanted to do with the Canadian Wheat Board.
I'll remind you a little of the history. There was a motion by Mr. Harper, the current Prime Minister, in 2002, when he was a member of the Canadian Alliance. In their election platform, the Conservatives had already stated what they wanted to do with the Canadian Wheat Board. There was also the appointment of this task force to which they appointed opponents to the Canadian Wheat Board as it was. Then there was the Order in Council that prevented the Canadian Wheat Board from justifying its existence and ensuring its survival. There was also Bill C-300, by our former committee chair, and the dismissal of your predecessor, Mr. Measner.
Then you arrived. There was a plebiscite. It goes without saying that the first ballots were recalled because it didn't go the way they wanted, for barley only, not for wheat.
So you were chosen, Mr. Arason. There must be a reason for that. I imagine you're in favour of what the government wants to do with the Canadian Wheat Board. Exactly what is the mandate you were given when you were hired?
:
I'm not challenging. It's just a comment.
Moving on, some of the comments you make are about the PROs, and most years.... I should preface this by putting on the record that I also am a farmer, but all of my farming career of 30 years was under the jurisdiction of the Canadian Wheat Board. Having lived through that—“lived” being the operative word—I think that I as well as Mr. Anderson have the common advantage of being able to pass a little judgment on what we actually received on our farms for our wheat and for our barley that went through the Canadian Wheat Board. Very seldom was it any higher than what the PROs were announced to be.
I have a couple of questions related to your comments. One is about the relevance of the whole argument about selling into Ontario. Very little wheat, I believe, comes off the prairies and ends up in Ontario. That would be one quick question needing just a simple answer.
In your comments, you say:
CWB's entire board of directors believes very strongly...that any criticism of the CWB should be based on fact....
I also agree that any support of the board should be based on fact. I like to think we've been very factual about the statements we've made.
I can't help but go back and wonder, when we see the kinds of letters that came to the board—in response to invitation, I'm sure—what a wonderful seller the Canadian Wheat Board was. I always like to go back to where I get the best deal too. I think that begs the question, how good a deal did they get? How poor a deal did Canadian farmers get?
I know we can't divulge those numbers. I want to share with you one question I asked of Stats Canada at committee this morning about sensitive factual numbers that Stats Canada uses in developing a trade strategy for Canadian companies. I asked, “What numbers, what sales figures do you get from the Canadian Wheat Board? Do you get actual, factual numbers to base all of your Stats Canada planning for the future on, for Canadian trade?” They said all they ever get is average numbers. That's pretty irrelevant to Stats Canada and pretty irrelevant to what we need as a value-added industry in this country.
My question to you, Mr. Arason, is this. At the time of your appointment the press was suggesting you were being paid more than your predecessor—a great job of negotiating, I guess. Can you share whether that is correct? And if so, and if you continue longer than you perhaps had thought you might to begin with, how is this compensation going to compare with Mr. Measner's?
:
I would say it's at least that, because a lot of the Ontario wheat goes into the U.S., into the cookie market, the cake market. It's a different type of wheat.
In terms of hard red spring wheat, I would say we are the major supplier into Ontario. We meet with the millers every year to plan our programs.
In terms of the issue you raised at the end, my compensation, yes, there was a lot of speculation about my compensation versus what my predecessor had been receiving. Actually, when it happened I negotiated with the Privy Council Office on what I thought was a fair compensation for taking on this job on an interim basis.
I did not have actual numbers on what the previous CEO received. That somehow got into the press, but what was reflected there and is in our latest annual report was a base salary. It did not include any benefits or other payments. When you take all that into account, the amount I'm receiving is less than what the previous CEO received for the fiscal year 2005-06.
As for going forward, I have no idea. That hasn't been determined.
:
What I would say, to reiterate, is that the prices are the prices. We have made prices available to the minister, and to be fair, those prices went just a week ago to the minister. We're awaiting his response to sit down and talk about it. So that offer is there.
I think there is a lot more that goes into relationships than just price. There is a long-standing commitment, an understanding of the market, technical support, quality assurance, the Canadian system. And this is more than just the Wheat Board. The Canadian system has a great reputation in the world for providing a quality product.
All those things help the customer in putting a quality product to their customers. And we have customers all around the world--I was just in China and Japan--who will tell you the same thing. The Canadian Wheat Board and the Canadian system are very good suppliers. Buyers get what they pay for, they pay well for that, they get what they want, and they don't have any surprises.
That's the reputation the system has built over the years, and it's one that has put money in farmers' pockets, and hopefully it will continue to do so, because it is a system approach. The Wheat Board does not own assets. We have to work with the industry and with the grain commission and with farmers to make sure that customers get what they want.
:
As I indicated earlier, there have been a lot of studies that have come up with various benefits related to the maximization or returns through the single desk.
I would say off the top that any organization, whether you'd be in the grain business or whatever, that had control of the supply chain would be in a better position to maximize profits. I think that goes without saying.
The issue is, in many respects, pooled prices versus spot prices; we've talked about that. I think if we'd seen prices falling in this year we'd have different comments being made about pooled prices versus spot. But really, as I said in the beginning, I'm there to run a business. I believe we're selling at good values throughout the year.
You have to pace your sales throughout the year. You cannot be opportunistic, because customers can't take all the grain at once. They need to have a steady supply, a steady flow of product. The reality is that's how the grain industry works, whether it's canola or wheat or whatever.
I really would just say that with the tools we have, with the customer relationships we have, with the sales force we have, we do a good job of getting a fair return and a good return for farmers.
:
Thank you very much, Mr. Arason and Mr. Anderson, for coming today.
Mr. Arason, there are just a couple of comments I allude to. One is—I am not sure who asked you—the amount of western wheat that gets shipped into Ontario, and it's significant.
By the way, I'm an Ontario farmer, and I have sold wheat, although that was six or seven years ago, I believe. Ontario sells its wheat to the U.S. at a high cost. It almost appears that it's able to replace that wheat with cheaper wheat from the Canadian Wheat Board.
On your earlier comments, I read some of your media messages about Algerian wheat sales, and I assume that you'd have no problem releasing that sales data to us, or at least encouraging the minister to do so.
There's one other question that I'll throw in with this. I couldn't help but be intrigued a little bit when you were talking about your wages in relation to your predecessor's. I probably wouldn't have got into this except that usually when you bring somebody in on a contract position, for a short time, it's inflated for that, and this seems to be the reverse.
For the public record, I'd be interested in knowing what exactly was Mr. Measner's salary. I don't know whether there were any perks with this job. Did he have a car? Did he have any memberships in fitness clubs, golf clubs, that kind of thing? I would also like to know if there was a severance package as well and what that dollar amount was.
:
On the comment around the philosophy of freedom of choice, I'm a beef farmer. I've done some cash cropping, but my main business is beef. As a beef farmer, whether I sell beef or grow beef in Ontario, New Brunswick, Newfoundland, or Alberta, I sell it on the free market.
If I'm in the berry industry, or the turkey or chicken industry, I am under supply management from coast to coast. If I grow soybeans, I'm in the free market system, coast to coast, but when it comes to barley and wheat and a few other crops, I'm under the free system of selling, except in one part of Canada.
You mentioned that you were also from producer roots—at least I believe I heard you right. When you compare the way other agricultural industry products are marketed in this country in the different sectors, whatever sector they're in and way of selling, they're consistent from coast to coast, but in the case of these, they aren't. Would you consider that, as a producer, to be right or fair, or seem fair? Do you have an opinion?
Mr. Anderson, you estimated the number of people who would like to keep the Canadian Wheat Board's single window at 20%.
I don't know where you got that figure, but I can tell you that we've been inundated with letters. We've seen Ipsos Reid polls, polls that are independent of the Canadian Wheat Board, as well as the results of the surveys by the Canadian Wheat Board itself. They show us something completely different.
In fact, what happened in Manitoba when the province decided to hold its own plebiscite on the question is equal to the best of the polls, in my view. We see that the vast majority of people want to keep the Canadian Wheat Board's single window.
In addition, a number of organizations representing thousands and thousands of farmers from across Canada are rising up against the present government's way of dealing with the commission.
This week, I like quoting Mr. Wilson, from the Western Producer. In the February 22 edition of that newspaper, he asked what I thought was a highly relevant question. He asked this:
[English]
“What happens to the Canadian Wheat Board if the monopoly is lost?”
[Translation]
The Canadian Federation of Agriculture, which is meeting in Ottawa this week said the following in a press release:
[...] no one has yet presented a viable plan for how the CWB can transition and remain strong [...]
Here we're talking about the eventuality of the single window being abolished.
There's also the Union des producteurs agricoles du Québec. I know that knowing that Quebec is concerned about this issue bothers some of my colleagues and even certain journalists in English Canada. I nevertheless think that they've outlined to you often enough the reasons why they're concerned with this.
There are two major collective marketing tools in Canada: the Canadian Wheat Board and supply management. The people from the Union des producteurs agricoles du Québec met with us, Mr. , other members and myself, to tell us about developments on this issue.
In a news release, the Union des producteurs agricoles said this:
[...] the voluntary marketing agencies — that's what the present federal government wants to introduce in place of the CWB — invariably wind up failing, since producers lose the dominant strength that enabled them to enjoy better selling conditions in the market.
That's a news release that I can send you, Ted, if you want. Mr. does not agree with the remarks of the Union des producteurs agricoles du Québec.
Mr. Anderson, I'd like to know whether you think all these factors are rubbish or whether they have some basis. Your government has a duty to explain what will happen if the Canadian Wheat Board ever became a single window.
My question is for David.
I don't know whether western producers feel bullied. In Quebec, the federation of grain producers gives grain producers a choice. They're free to market their grain as they wish, but they can also group together to market wheat for human consumption.
Could the Canadian Wheat Board show more flexibility toward those who produce specific grains, organic grains, for example, which are currently at a disadvantage because they aren't differentiated from other grains? Despite the specific properties of those grains, producers don't get the best market price.
We mustn't conceal the fact: grain varieties have evolved over the past 20 years, whether it's for making bread and cookies or in more specialized markets and niches. As a result of the way in which grain is currently marketed, these grains wind up in the elevators in the same way as grains of lesser value. That doesn't benefit producers. Could I have some information on that subject?
Thank you.
:
There are two things. One is that if we could open up the system in western Canada, we would have access to dozens more varieties of grain and dozens more opportunities to grow different products. I think that's why the committee recommended that the KVD system be set aside, so we do have those opportunities in western Canada that we have across the rest of the country. Ontario set that aside 17 years ago; their industry has bloomed because of that.
The second thing I have to say about that is organic producers in western Canada have been at a severe disadvantage because of our marketing system. Until this year, the Canadian Wheat Board has not marketed organic grain. The producers have gone out, they have made the sales, then they've had to make an arrangement through the Canadian Wheat Board to buy back their grain from the Wheat Board, and then make their sales. The Wheat Board takes a cut off the top for doing nothing.
This year, it's a big cut. A producer in my area said that over the last ten years that buy-back provision has probably cost him $1 million on his farm. He's growing organic grain, and they've been able to sell it, but every time he sells a bushel of grain a cut goes to the Canadian Wheat Board, and they have not been the ones who have been marketing the grain.
This year the Wheat Board decided they were going to start getting into marketing the grain, so they picked one of the organic certification outfits they liked to set up a pilot project. I had organic farmers tell me what happened then is they phoned the people who are buying from them, and these guys said the Wheat Board had phoned them and told them they were going to be selling grain this year, so they expected them to have to deal with that and be in competition with them. Farmers wouldn't mind being in competition with them, but they don't like having to pay them the buy-back as well as trying to compete with them.
Mr. Gourde makes a good point, but western Canadian farmers would love to have that opportunity. Organic would be a good place for the board of directors to make some exceptions; they can give no cost buy-backs and export permits. The organic industry is not so big in western Canada that it's going to threaten the Wheat Board at all. This is one area where they could really show some leadership, open things up a bit, and it would be an area where farmers would then begin to believe they are interested in working with them.
:
We will look at the transcript and see how you managed the time. I'm very unhappy about the way it has gone.
I do have one closing question to the secretary.
A few years back a committee that was studying agriculture made a recommendation to the House that we have a vote on the future of the Wheat Board. Some of us around the table were members of that committee.
The trouble I have with this whole business is that the government, rather than having an open vote, has a parliamentary secretary sitting before this committee saying that he and apparently the government are opposed to the vote. Does the government have a position to have an open vote on the Wheat Board, or does it have a definite program to see that the Wheat Board is closed?
In terms of his oath of office, could the parliamentary secretary say whether he represents an open vote where farmers can decide the future of their sales, or does he promote the concept that the Wheat Board should end in terms of being the sales agent for the many farmers in western Canada?
David, from my point of view, it's simply inconceivable that you as a parliamentary secretary can sit before this committee and advocate a personal point of view rather than representing the Government of Canada.
Mr. Chair, that is a very serious matter, which we, as a committee, have to address. Can he hold his office and advocate what the answer to that vote should be?