December 16, 2011 / 12:16 AM / 6 years ago

Canada Wheat Board bill becomes law, Ottawa takes control

OTTAWA/WINNIPEG (Reuters) - The Canadian Parliament gave final approval on Thursday to a government bill to end the Canadian Wheat Board’s 68-year-old grain marketing monopoly, allowing the government to take control of the board from farmers who oppose its plans.

Legal challenges, however, threaten to leave farmers and the grain industry in limbo into the New Year.

The Senate easily passed the Conservative government’s legislation to end the CWB’s monopoly on sales of western wheat and barley for export or milling next August and allow farmers to sell those crops to whomever they choose.

Later on Thursday, Canada’s governor general gave the bill royal assent, making it the law.

The Wheat Board has already asked a Manitoba court to declare the legislation invalid and will be in court on Friday morning to ask for implementation of the law to be temporarily suspended until the court decides whether to strike it down.

The board is seeking to build on a Federal Court decision last week that declared that Agriculture Minister Gerry Ritz had breached existing law by not consulting with the Wheat Board or holding a farmer vote before introducing the legislation.

That Federal Court ruling did not kill the bill, but the Wheat Board has now asked the Manitoba court to do so.

With the bill becoming law, the eight farmer-elected directors are removed from the CWB board, leaving it controlled by five government appointees.

Some now expect the government to try and pull the CWB out of its court case, leaving the former farmer directors to lead the challenge as individuals.

The bill would allow grain handlers, millers and farmers to sign forward contracts for 2012 crops, but the legal uncertainty has left all three groups hesitant to move.

Canada is the world’s biggest exporter of spring wheat, durum and malting barley, which fall mostly under the board’s monopoly.

Western farmers are fiercely divided over whether to keep the monopoly, although the Wheat Board’s non-binding poll this summer showed most farmers want to keep the system for wheat and a slight majority favor the monopoly for barley.

The government has discredited that vote and the Wheat Board has called for Ottawa to hold its own farmer plebiscite to settle the issue.

Editing by Miral Fahmy

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