CWB 2.0 backs out of directors’ court challenge

A court challenge of the new law ending the Canadian Wheat Board’s marketing monopoly proceeded in a Manitoba court on Friday, while the government insisted it was full steam ahead on its market-opening plans, and grain handler Viterra began offering forward contracts.

Eight now-former farmer directors of the Canadian Wheat Board (CWB), who had launched the court challenge along with the CWB, pursued their case as individuals even though the board is now under federal control and has pulled out of the case.

Legislation ending the CWB’s 68-year-old marketing monopoly on sales of Western Canadian wheat and barley next August became law late Thursday, allowing Ottawa to take control of the board from farmers who oppose the Conservative government’s plans to create an open market.

The farmer directors continued to be represented by their lawyer in the court hearing.

"Now on vacation"

Agriculture Minister Gerry Ritz told a news conference at Balgonie, Sask., east of Regina, that the farmer directors’ roles ceased to exist with the passage of the bill. "They’re now on winter vacation," he said.

The government legislation provides for the removal of the eight farmer-elected directors, leaving the CWB in the hands of five government-controlled appointees.

"This feels damn good," Ritz said. "It’s been a long time coming."

For the first time since 1943, farmers, grain handlers and millers can now sign forward contracts for next year’s western grains without using the CWB.

Despite lingering legal uncertainty, Canada’s biggest grain handler, Viterra, immediately started offering forward contracts on wheat, durum wheat and barley.

"Viterra anticipates that the industry, farmers, customers and the economy will see significant benefits as further transportation and logistical efficiencies are realized in this positive new environment," CEO Mayo Schmidt said.

CWB CEO Ian White issued a statement saying the organization still exists and would soon be announcing new pooling and cash programs for the next crop year.

"Amid all the change, one thing remains the same: the CWB will market farmers’ grain. We will work to achieve the best prices for farmers and superior service for customers in Canada and around the world," White said.

Canada’s second-biggest grain handler, Richardson International, will wait until at least after Friday’s court appearances to offer forward contracts, said Jean-Marc Ruest, vice-president of corporate affairs.

On Wednesday, the CWB and its farmer directors filed papers in the Manitoba court asking it to strike down the law on the grounds that the old law required a farmer vote before changing the marketing monopoly.

A Federal Court last week had said Ritz had breached the law in not holding a farmers’ vote, but it did not strike the law down, nor was it asked to do so.

The Friday court hearing in Winnipeg was on a motion asking the court to suspend implementation of the law until a decision is reached on whether to strike it down.

The motion asks that the suspension be retroactive to the moment the bill was signed into law. If that is granted, then the farmer directors, including chairman Allen Oberg, would in theory be reinstated.

If the suspension is granted, however, Ritz said the government would still proceed with plans for the revamped CWB.

Asked later if it was his government’s practice to ignore court decisions, Prime Minister Stephen Harper said: "No, it is not."

He added that he certainly did not expect such a ruling.

"Lack of certainty"

Farmers have vigorously debated the value of having a marketing monopoly for at least 20 years.

"I am personally looking forward to the freedom to choose where I sell my first load of wheat and barley," said Alberta farmer Stephen Vandervalk, president of the Grain Growers of Canada.

Others have long said that marketing freedom comes at the cost of collectively selling grain for the best price through the CWB.

The court case leaves farmers feeling like they’re in limbo as they plan next year’s crops, said Doug Chorney, president of Manitoba’s Keystone Agricultural Producers.

"There’s a lot of concern about the lack of certainty," he said. "Whether they’re for the board or against the board, I haven’t heard of anyone around here signing contracts yet."

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