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An ear of wheat is seen on the Canadian prairies near Lethbridge, Alberta, Sept. 7, 2011. (Todd Korol/Reuters/Todd Korol/Reuters)
An ear of wheat is seen on the Canadian prairies near Lethbridge, Alberta, Sept. 7, 2011. (Todd Korol/Reuters/Todd Korol/Reuters)

Canada's Wheat Board wars: The future of farming cut two ways Add to ...

At first glance, Bill Gehl and Norman Shoemaker have a lot in common. They both run family farms, they both grow many of the same crops and they live near each other in southern Saskatchewan not far from Regina. But when it comes to the future of farming without the Canadian Wheat Board, Mr. Gehl and Mr. Shoemaker couldn’t be further apart.

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They are just two of about 60,000 farmers who will be directly affected by the federal government’s plan to end the Wheat Board’s monopoly over the sale of all wheat and barley grown in Western Canada. But they offer a unique perspective on how the government’s move will affect their farms

PRO: Farmers in the driver’s seat

For Norman Shoemaker, scrapping the Wheat Board’s control means freeing farmers to arrange their own deals. “Farmers are going to be in charge of their own destiny,” he said.

For example, one the biggest crops on his 12,500-acre farm is malt barley, which is used to make beer and has been in strong demand recently. Currently, all of Mr. Shoemaker’s barley is sold through the Wheat Board, which he said can delay payments and complicate pricing. Without the board, Mr. Shoemaker could deal directly with malting companies and eliminate the middle man.

The end of the board would also mean farmers could fill smaller orders that the board, because of its size, rarely considers, he added. Farmers already sell their own canola, peas and other crops not controlled by the Wheat Board, so adding in wheat shouldn’t be difficult. Canola already rivals wheat as the largest crop on the Prairies. “We proved we can do it on that one, so why not wheat?”

Ending the board’s control would also bring new investment to Western Canada. Many farmers have argued that the Wheat Board discourages grain processing in the region because it charges processors a higher price than farmers would. As a result, while much of the canola grown on the Prairies is processed in Canada, most of the wheat and barley is exported. Regina-based Alliance Grain Traders Inc. has already announced plans to build a pasta and pulse processing facility in Regina, in part because the wheat board’s monopoly is ending. “I’m looking forward to selling to them,” Mr. Shoemaker said.

CON: Farmers would lose clout

Bill Gehl is so angry at the government’s decision to scrap the Wheat Board he’s leading protests against it. If the board is scrapped, “we will be going backward in time to a system in place 70 years ago when five or six multinational companies controlled our grain market,” he said from his 4,000-acre farm.

He said the Wheat Board gives farmers clout both in world markets, where it can push for higher prices, and in Canada, where it negotiates freight rates with Canada’s two railways. Mr. Gehl said he could market his own wheat, but why do it when 400 wheat board officials in Winnipeg will do it for him and every other farmer. “Just because someone has a computer and a BlackBerry doesn’t mean they can market their own grain,” he said. “At that point, I am just a price taker.”

Wheat is not like canola, he added. While canola is fairly uniform, farmers grow about 30 different types of wheat, depending on grades, protein levels and classifications. The board organizes grading, shipping and selling for each variety, often at premium prices. Without it, he argued, there will be pressure to drop varieties, meaning lower prices for farmers.

Durum is a good example of the Wheat Board’s importance, he said. Canada is one of the world’s largest producers of durum, a type of wheat used to make pasta. But it’s a small market, and if world supplies get too large, the Wheat Board can step aside, tell Canadian farmers to hang on to their wheat and wait for prices to rise. Under a private system, he argued, farmers would have to sell into the market at steep discounts.

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