Newsroom
2007
Federal Court hearings to begin on CWB barley issue
July 24, 2007
Winnipeg – Hearings begin tomorrow morning at Federal Court in Calgary on whether the government’s plan to remove farmers’ single-desk marketing system for barley on August 1 is legal. The hearings, which start 9:30 a.m. MDT on July 25, are expected to run over three days with a decision expected at a later date.
The CWB has applied to have the introduction of change by regulation declared unlawful or beyond the federal government’s jurisdiction. The CWB application argues that the ultimate decision to remove grain from the single desk is reserved to farmers. It also argues that only Parliament -- not the government by itself -- can make the changes required to implement farmers’ decision.
The intent and effect of 1998 changes to The CWB Act was to make the CWB a farmer-controlled enterprise accountable to western Canadian farmers, who now elect a majority of its governing board. The CWB’s application, its written arguments, the affidavit of its Chief Operating Officer and 53 exhibits, have been posted at www.cwb.ca.
Controlled by western Canadian farmers, the CWB is the largest wheat and barley marketer in the world. One of Canada’s biggest exporters, the Winnipeg-based organization sells grain to over 70 countries and returns all sales revenue, less marketing costs, to farmers.
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For more information, please contact:
Maureen Fitzhenry
CWB Media Relations Manager
Tel: (204) 983-3101
Cell: (204) 227-6927
In a nutshell
- Amendments to the CWB Act in 1998 transferred operational control over the CWB from the federal government to western Canadian wheat and barley producers. Key among these amendments was Section 47.1, which ensures that the ultimate decisions over grains marketed through the CWB single desk rests with farmers. This section established that wheat or barley could be removed from the single desk only through legislation enacted by Parliament, preceded by consultations with the CWB board of directors and a majority vote of producers in favour of removal of the grain.
- Since its election in 2006, the current federal government has embarked on a policy to implement a voluntary marketing structure for board grains, which would result in elimination of the CWB single desk. In early 2007, the government issued to farmers a non-binding, three-option questionnaire on barley marketing, with one option based on the questionable premise that it is possible for the CWB to survive in an open market without the single desk.
- The government’s March 28, 2007 announcement that it would amend CWB regulations to remove barley from the single desk on August 1 has had and continues to have a significant negative impact on the CWB’s ability to effectively carry out its mandated operations on behalf of farmers. This is harming farmers financially. Farmers bear the financial burden of CWB losses, since its operation is entirely funded by proceeds related to the sale of producers’ grain, with all profits returned directly to them.
- The CWB twice asked Minister Chuck Strahl to end the market uncertainty that has occurred since his March 28 announcement by delaying implementation long enough to enable the government and the CWB to obtain legal clarification of the government’s process.
- The Minister’s own task force envisioned that changes to barley marketing would be carried out via Parliamentary legislation and recommended an implementation date of February 2008 in recognition of transitional challenges.
- The CWB’s value for farmers is derived directly from its single-desk structure, which enables farmers to sell all their wheat and barley (for export or domestic human consumption) as one – giving them market power to leverage returns. For barley, this value is estimated by economists at $60 million per year. The CWB owns no grain-handling facilities such as elevators or port terminals and has no other significant physical assets. This fact effectively prevents it from transforming into an open-market grain company capable of competing with established corporations.