CANADA

Prairie rebels

Ottawa cracks down on wheat smugglers

TOM FENNELL October 10 1994
CANADA

Prairie rebels

Ottawa cracks down on wheat smugglers

TOM FENNELL October 10 1994

Prairie rebels

Ottawa cracks down on wheat smugglers

David Sawatzky’s patience finally ran out. Last month, Canadian customs officials at the Manitoba-North Dakota border held up six grain trucks that the Manitoba farmer owned because they believed he was hauling grain illegally into the United States. Fed up, Sawatzky jumped into one of the trucks and drove it across the border. He immediately walked back, but was told he would be arrested if he tried it again. Sawatzky then retreated to his farm near Gladstone, Man., 130 km west of Winnipeg, and four days later the RCMP raided his home and seized his grain records. Under law, prairie farmers must export their wheat through the Canadian Wheat Board. But hundreds of them have been hauling grain illegally to the United States, where they can earn more than twice as much. And the revolt is spreading. Protesting farmers may send a convoy of trucks back to the border next week, and a rally is planned for Regina on Oct. 20. Said Sawatzky: “We have to act or there won’t be any farmers left.”

The stakes in the battle are high. The Winnipeg-based wheat board is a farmer-owned co-operative and has a monopoly on selling virtually all prairie wheat internationally. By doing so, it allows all farmers to take advantage of potentially lucrative foreign markets.

But if the rebel grain growers manage to convince Ottawa to open export markets to individual farmers, the board could be seriously undermined. In response, Canada Customs is stepping up inspections at the border and issuing fines of $100 per ton on grain being moved without proper permits. And when accused by Reform party agriculture critic Leon Benoit of treating farmers like drug smugglers, Agriculture Minister Ralph Goodale told the House of Commons last week that failing to enforce the law would be unfair to farmers who follow the board’s rules. “In a civilized and democratic society,” he said, “it is important that all the laws be obeyed, not just those with which we selectively agree.” But many grain producers believe they have a right to an open market—and are being thwarted by force. Andy McMechan, who farms 1,600 acres in southwestern Manitoba, said that on Sept. 22 two RCMP officers and two Revenue Canada officials searched his home for evidence that he was shipping wheat to the United States. Word quickly spread, and within hours of the raid, 70 farmers had gathered at his home to support him. But McMechan, who has sold wheat on the open market in the United States, said the government’s decision to step up the fight against smugglers will only bring more of them into the rebel camp. “If they [the po-

lice] come back,” warned McMechan, “they won’t be able to leave the place.”

Such frustration and anger is fuelled by flat international grain prices. Since 1985, the United States and the European Union have been heavily subsidizing their wheat farmers. As a result, the international price of top quality wheat has remained virtually unchanged—from $160 per ton in 1985, to $164 per ton last month. But at the same time, American farmers have shipped so much wheat abroad that domestic prices for grain in the United States have jumped sharply. As a re suit, a Canadian farmer with 1,000 acres of top quality wheat could earn as much as $80,000 more by selling his wheat directly to buyers in the

United States. And a growing number of farmers are set to cash in. Said Sawatzky: “There are a million bushels ready to go south.”

The shift to larger farms is also changing how farmers view the wheat board. Jim Pallister, who farms 10,000 acres 90 km west of Winnipeg, said larger farm operators are better able to absorb the cost of shipping their grain to the United States independently, and simply do not need the wheat board. As well, new information technology, such as satellite dishes and fax machines, allows sophisticated grain producers to contact buyers more easily. Said Pallister: “We sign a contract by fax and send a grain sample by courier.” Those advances may already be undermining the board’s ability to sell Canadian grain abroad, including an estimated 17 million tons this year. According to wheat board spokesman Brian Stacey, independent sales steal premium markets from the board, reduce the amount of money it can return to its members and ultimately cripple the effectiveness of the board. “Without question,” he added, “farmers would be worse off without the board.” Other supporters of the wheat board say the smugglers will eventually hurt all grain farmers by angering the Americans. Murray Bryck, a spokesman for the Reginabased Saskatchewan Wheat Pool, said that U.S. politicians will never allow thousands of western Canadian farmers to start hauling grain across the border. In fact, he said, it was illegal grain shipments that triggered a recent trade dispute between Canada and the United States, which in August resulted in drastic limitations on Canada’s U.S. grain exports. Said Bryck: ‘The United States decided it couldn’t trust us.” And thousands of farmers, it appears, no longer trust the wheat board.

TOM FENNELL