Barley Monopoly Again
A judge has struck down the federal government’s proposal to eliminate the monopoly of the Canadian Wheat Board on barley exports. The current system has all barley exports brokered through the board on their pricing schedule. You cannot determine the price through normal market discovery, you must be a price taker off the board. This is mind blowing to me because it limits the ability to sell to who you want and for what price. It takes away our control. There is no international arbitrage because the board is the only one that can export grain.
I am amazed that in a country with democracy, free trade and anti-trust laws, we would allow a monopoly without any consideration for normal market functionality. Canadians are smart enough to sell inside the country, but too stupid to sell outside the border? It is a double standard. So why do people support this? Proponents believe the board is the most efficient at getting high prices and the only one with Canadian farmer interests in mind. I really struggle with that logic. When the decision was first made to break up said monopoly, the price of barley increased over 50 cents a bushel in less than a week. If a company screws their customer, they are replaced with someone who doesn’t.
I believe a market functions best with pure competition, no external interference and no oligopolies and monopolies. This is part of Canadian law. Supply and demand determine a price. The government should only function as an intermediary to ensure this can happen and comply with Canadian and International law.
The Canadian Wheat Board is just a player in the international market. The international market place has millions of products traded without government interference, so why would the grain market be any different? If the government wasn’t there, they would be replaced with someone else to arbitrage the market internationally.
As a skeptic of government interference in the marketplace, I often think of a joke I heard not long ago.
What are the 3 biggest lies in the world today? I will respect you in the morning, the cheque is in the mail and I am from the government and here to help! ! !
Trent Adams
Comments
Very well said Trent!
Leave a Comment