February 15, 2012 / 5:38 PM / 8 years ago

Farmers sue to regain control of Canadian Wheat Board

WINNIPEG, Manitoba (Reuters) - Several farmer organizations that support the Canadian Wheat Board’s grain marketing monopoly are launching a court action aimed at restoring farmer control of the board and collecting C$17 billion ($17 billion) in damages for farmers.

The lawsuit, launched by the law firm Sack Goldblatt Mitchell LLP, will present constitutional arguments to try to remove the CWB from government control, and collect damages farmers may incur from the board’s weakened market clout, the Friends of the Canadian Wheat Board group said on Wednesday.

The move follows the launch of a similar, C$15 billion class action by Saskatchewan lawyer Tony Merchant last month. That suit does not attempt to change who controls the CWB.

The Conservative government passed legislation in December ending the CWB’s marketing monopoly over Western Canada’s wheat and barley for milling or export as of August 2012. Once the law passed, the government took control of the board by removing eight farmer-elected directors.

The farmer groups’ case is based on 1998 amendments to the previous law governing the Wheat Board, which ensured farmers elected most of the CWB’s directors, said Anders Bruun, a lawyer who is also working on the suit.

The implications of that law are that farmers have the right of association to collectively market their grain, and also the freedom of expression through the directors they elected, Bruun said.

A court will first decide in a few months which of the two class actions to certify, and the lawsuit itself may take several years to decide - which could make rebuilding the grain monopoly impractical, Bruun acknowledged.

Within a few years, the government may still control the Wheat Board, or the CWB might have moved to a different ownership structure with farmers holding shares, or another grain company might have acquired it.

“It’s feasible in a scenario like that, that a court would rule - since they can’t order anyone to do the impossible - that they would settle for money damages instead,” Bruun said.

The latest court action comes with the Canadian grain industry waiting eagerly for a Manitoba court to rule whether it should suspend the law ending the Wheat Board’s monopoly while deciding whether it is valid. Such a ruling could jeopardize forward-delivery contracts that some grain companies have signed with farmers for the next harvest.

In December, a Federal Court judge ruled Agriculture Minister Gerry Ritz broke existing law by not allowing a farmer vote before moving to end the CWB monopoly. However, the judge also said that the ruling did not affect the government’s new legislation.

In an emailed statement, Ritz dismissed the latest lawsuit.

“It’s unfortunate that a small group remains adamant that farmers can’t market the crop they pay (to) plant, spend months to grow and tirelessly harvest. Marketing freedom is now law and farmers are moving forward, rightfully contracting their wheat and barley for August 1, 2012.”

Four grain farmers, one representing each western province, are the plaintiffs in the most recent lawsuit. It is supported by several farmer groups - Friends of the Canadian Wheat Board, the Canadian Wheat Board Alliance, Producer Car Shippers of Canada, the National Farmers Union, and eight former CWB directors.

Reporting by Rod Nickel; editing by Rob Wilson and Peter Galloway

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