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Farmers don't own Wheat Board they built, grew and loved says top court

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Image: Flickr/TJMartins

With some help from my friends (lawyers Anders Bruun and Ben Piper) I argued a case before the Federal Court of Appeal yesterday. The Court ruled from the bench; the result was mixed but more of a defeat than a victory.

Among other things, the case was about money.  An awful lot of it -- over $17 billion.  That is actually a realistic estimate of the value of the Canadian Wheat Board that has been destroyed by the Harper's government's decision to get rid of the Board's marketing monopoly for wheat and barley and to fire all of the directors elected by the farmers to sit on the Board.

With the benefit of the market power the monopoly afforded, a smart farmer-controlled Board had built an international brand for Canadian wheat that allowed it to claim a very nice premium in the market -- somewhere between $600-800 million a year. It also allowed the Board the leverage to negotiate favorable supply chain arrangements with the rail companies and international grain conglomerates so that grain could be moved efficiently to markets.

While the Wheat Board still exists, it has been run by Harper appointees since Dec. 2011 and has no marketing power. Last summer, the failure of supply chain logistics to move a bumper wheat crop to market cost farmers an estimated $4 billion.

The court was dealing with motions to strike a proposed class action brought on behalf of grain producers seeking compensation for the value of the Wheat Board the Government had taken and will now either sell or wind down.

At the center of the case was this question -- can the Government simply take the assets, which include the enormously valuable goodwill the Board built, from the farmers who paid for and built those assets, and do so without paying the farmers for them?  The Court said yes. Why? Because according to the Court the farmers weren't "shareholders" and had no proprietary interest in those assets.

The reasoning is this: Unless grain farmers can prevent others from taking advantage of an institution they built, or can sell that interest to others, they cannot claim a property interest in the institution and assets they built and paid for. As the court found, the law simply won't protect co-operative forms of ownership or the generous impulse of those who invest and create to benefit the community.

There is much that is egregiously unjust about Harper's decision to destroy the Board, including his failure to hold a vote among grain producers before the fundamentally changing the Board's mandate as the Wheat Board Act required.  Two years ago, the Federal Court of Appeal found that parliamentary sovereignty trumped that statutory requirement.  Now the court has found that farmers have no right to be compensated for the assets the Government has taken from them.

There is much to the history of the Canadian Wheat Board, and the agrarian socialist movement from which it sprung, that should be better known and celebrated. From those same roots sprouted the CCF, and many of the fundamental social reforms that define this country. Many of these are still with us today, but the Canadian Wheat Board will soon not be among them.

I began by saying the result in court yesterday was mixed. That is because one aspect of the proposed class action has survived -- a claim for damages based on the mismanagement of funds by the Government-appointed Board.  While it will do nothing to revive the Board, the case should impose some small measure of accountability on the Government and its appointees. That prospect provides some, albeit small, comfort.

Image: Flickr/TJMartins

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