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SASKATOON, Saskatchewan (Reuters) - A court ruling that backs a government order blocking the Canadian Wheat Board from lobbying to keep its monopoly on grain sales undermines the board's authority to spend its funds as it sees fit, CWB Chairman Larry Hill said on Tuesday.
The decision by Canada's Federal Court of Appeal, handed down on June 23, overturned a lower court ruling that had struck down the Canadian government's 2006 order.
It marks the latest in a series of skirmishes between the federal Conservative government, which wants to end the CWB's monopoly, and the Wheat Board, which wants to retain it.
"Producers expect (CWB directors) to be in charge of the organization," Hill said. "...There is a principle at stake here."
Since 1998, the CWB has been led by a board of directors, most of whom are elected by Western Canadian farmers.
The earlier court decision found that Ottawa's order violated the board's right to freedom of expression, but the Appeal Court said the CWB's authority and rights were restricted by the Canadian Wheat Board Act.
"The Wheat Board is a creature of statute and, as such, it has no powers, rights and duties save those bestowed on it by (government legislation)," Appeal Court Judge Marc Noel said in his written decision.
The Wheat Board, one of the world's largest grain marketers, with revenue of C$8.4 billion ($7.2 billion) in the 2007-08 crop year, has a government-granted monopoly on sales of wheat and barley produced in Western Canada.
The federal Conservatives plan to eliminate the monopoly and allow farmers to sell their grain via the Wheat Board or other commercial buyers. However, with only a minority of seats in the House of Commons, the government has lacked the necessary votes to pass legislation needed to change the Wheat Board Act.
The Wheat Board wants to keep the monopoly, arguing that it can return higher prices to farmers that way.
Hill said he doesn't think the CWB has spent money since 2006 directly advocating in favor of the monopoly, but it does give farmers comparisons of CWB grain payments versus other market prices.
The CWB is analyzing the latest court decision and hasn't decided whether to appeal the ruling to the Supreme Court of Canada, Hill said.
Editing by Rob Wilson