EDMONTON - Alberta's beef producers already know what happens when multinational food giants dominate the market. Now, with the future of the Canadian Wheat Board in doubt, there are fears of diminished profits if U.S. grain buyers are left to do the same thing.
"If the federal government is able to kill the only real Canadian, farmer-owned marketing arm, which is the wheat board, then we would be faced with the same situation that the beef producers are now," says Stewart Wells, president of the National Farmers Union.
Canada's beef packing industry is dominated by two huge U.S.-based companies, Cargill and Tyson Foods, both with slaughterhouses in southern Alberta. Cargill also has one of the largest cattle herds in the country.
This allows the company to buy from itself to guarantee a steady supply of beef. Farm groups and producers say this tactic gives Cargill an advantage over ranchers trying to get the best price for their cattle.
In 2004, several farm groups pushed unsuccessfully for a law to forbid major meat packers from owning cattle to prevent them from using their own herds to manipulate prices.
The slaughterhouses argued that they need to own some cattle to ensure they have animals to fill their kill lines when ranchers choose not to sell to them.
Alberta Agriculture Minister George Groeneveld dismisses the possibility of this scenario happening in the grain market.
The fears are simply a throwback to a time when farmers were squeezed by grain barons hungry for profits in the days before the Canadian Wheat Board was established in 1935, he says.
"There's certainly some elder farmers out there that are still actively farming that have not forgotten what happened in the 1930s," says Groeneveld. "That was a different day and a different time."
Today's farmers are highly sophisticated in the way they track grain prices, he says, and many want the freedom to sell their wheat and barley outside the wheat board's monopoly.
"These guys are pretty sharp, they're on the computers daily with their marketing interest," Groeneveld says. "It's not as though they're getting blindsided because of lack of knowledge of what's out there."
But the head of Alberta's largest farm group says he's also nervous about what will happen if the federal Conservative government's plan to end the wheat board's monopoly over Prairie wheat and barley sales leads to the wheat board's demise.
"I believe that most farmers in Western Canada certainly do not want to see the wheat board go out of existence," says Rod Scarlett, president of the Wild Rose Agricultural Producers.
"Really, we're down to two major Canadian grain companies," says Scarlett, referring to Agricore and Saskatchewan Wheat Pool. "If we lose either one of them, our grain industry is really going to be dominated by international corporations."
Federal Agriculture Minister Chuck Strahl insists Prairie grain farmers are more likely to flourish once the wheat board's monopoly is lifted. He says this has been the case with the easing of marketing restrictions on other farm commodities, including beef and pork.
"Where farmers are losing their shirts is on board-controlled grain," Strahl says. "It's when (a commodity) comes out of the control of the board that real growth takes off."
The grain industry has rarely experienced the wild price swings that have occurred in the beef industry as a result of the mad cow crisis.
But profiteering in the beef industry has been widely publicized. Cattle ownership by Cargill and Tyson resulted in the firms getting $45 million of the $400 million in mad cow compensation from the Alberta government a few years ago.
Alberta Auditor General Fred Dunn said this drove down cattle prices and helped the companies triple their profits.
Art Macklin, a former wheat board director, cites recent examples of what could happen with grain prices if private buyers are left to dominate the market.
"We had a surplus in durum for the last two or three years," says Macklin, who operates a mixed farm in northern Alberta. "If the wheat board had not regulated the supply into that market, we would have driven down prices.
"That's exactly what will happen if the big companies control the market and we have a surplus," he said. "They will not manage supply for the benefit of producers. The weakest seller will then set the price."
