New Publication Summarizes Complaint with Canada’s Wheat Monopoly

A decision is near in a precedent-setting trade case that pits American wheat farmers against Canada’s monopoly wheat marketing board, the largest single exporter of wheat and barley in the world.

The U.S. Trade Representative is to make a formal determination on the matter of a North Dakota Wheat Commission trade complaint against the Canadian Wheat Board by January 22, 2002. The case originated in September 2000 when the commission filed a petition on behalf of North Dakota’s wheat producers asking the USTR to investigate and take action against anti-competitive policies of the Canadian Wheat Board. The petition, which was filed under Section 301 of the Trade Act of 1974, has the backing of national wheat and farm organizations.

As part of a larger effort to educate policymakers and government officials about the need to discipline Canada’s wheat trading practices, the NDWC recently released a new publication titled “Monopoly: Only Fun When It’s a Game.” The publication outlines NDWC concerns with the Canadian Wheat Board, provides statistics on the production and trade of U.S. and Canadian wheat, and describes the remedies being sought. The information piece is
downloadable from the commission’s web site at www.ndwheat.com/in/index.asp.

The NDWC complaint against the CWB centers on its unfair price discrimination. “As a government-sanctioned monopoly, the CWB has privileges and protections that cannot be duplicated in a free enterprise system,” points out Neal Fisher, administrator of the state wheat commission. Examples include government-guaranteed initial payment to producers, a system of price pooling, price secrecy, preferential transportation legislation and regulations, and a closed domestic market, all of which enable the CWB to engage in price discrimination.

“Without its government-sanctioned lock on wheat purchases and sales combined with these special government-granted privileges, the Canadian Wheat Board would not be able to cut its prices and offer under-valued long-term contracts to capture market share around the world,” Fisher explains.

The “Monopoly” publication contains graphs that illustrate the dramatic loss of U.S. market share to the CWB for hard wheat in the Philippines and Guatemala and for durum wheat in Algeria and Venezuela.

The NDWC is asking government officials to enforce U.S. trade laws by taking action to end the unfair practices of the Canadian Wheat Board.