In 2008, the Australian Wheat Board, still staggering from a scandal over kickbacks to Saddam Hussein, was stripped of its powers as the sole lawful bulk exporter of that country’s wheat. This left Canada as the lone developed nation with a legally protected “single desk” export buyer-seller—the Canadian Wheat Board. With a minority government in Ottawa, the board’s grip on Prairie wheat was unshakeable. But now Stephen Harper’s Conservatives have a majority, with the corresponding freedom to rewrite statutes. And they intend to take Canadian wheat growers down the same path as Australia.
The AWB’s monopoly was killed off with the support of the two biggest political parties in Australia’s proportional, bargaining-driven legislative system. The board—with the monopoly still intact—was taken private in 1999. But when the Iraq controversy exploded in 2005, the AWB was banned from dealing to a major customer as criminal and administrative inquiries ground on. Poor financial results turned ugly, and the crisis demonstrated that while a single desk may give growers leverage, it also crowds all the proverbial eggs into one basket.
That is precisely the source of contention in Canada, where board reform has been urged for decades by an enterprising minority of growers eager for marketing choice. Canadian Agriculture Minister Gerry Ritz wants to introduce legislation to eliminate the CWB monopoly this autumn and hopes to have a free-trade regime in place by August 2012. He faces tricky choices about how much vestigial regulation to impose on the Canadian wheat market (which exports 16 to 20 million tonnes in a typical year) and the transport system it depends on. He will also have to look at other functions of the wheat board, such as research, standardization and forecasting, and decide whether to leave them with the CWB, parcel them out to independent agencies, or let the market sort them out. The Australian Agriculture Department now funds these peripheral mandates by taxing wheat exports at 23 Canadian cents a tonne.
Full Article
Source: Macleans
The AWB’s monopoly was killed off with the support of the two biggest political parties in Australia’s proportional, bargaining-driven legislative system. The board—with the monopoly still intact—was taken private in 1999. But when the Iraq controversy exploded in 2005, the AWB was banned from dealing to a major customer as criminal and administrative inquiries ground on. Poor financial results turned ugly, and the crisis demonstrated that while a single desk may give growers leverage, it also crowds all the proverbial eggs into one basket.
That is precisely the source of contention in Canada, where board reform has been urged for decades by an enterprising minority of growers eager for marketing choice. Canadian Agriculture Minister Gerry Ritz wants to introduce legislation to eliminate the CWB monopoly this autumn and hopes to have a free-trade regime in place by August 2012. He faces tricky choices about how much vestigial regulation to impose on the Canadian wheat market (which exports 16 to 20 million tonnes in a typical year) and the transport system it depends on. He will also have to look at other functions of the wheat board, such as research, standardization and forecasting, and decide whether to leave them with the CWB, parcel them out to independent agencies, or let the market sort them out. The Australian Agriculture Department now funds these peripheral mandates by taxing wheat exports at 23 Canadian cents a tonne.
Full Article
Source: Macleans
No comments:
Post a Comment