FARMERS' LAWSUIT
Wheat growers threaten to sue board

By Terry Meagher

A group of nine producers has taken the first step towards a class action suit against the Ontario Wheat Producers Marketing Board.

John Donor, of Richmond Hill, accusing the board of mismanaging the marketing of soft white wheat across the province, says the group has hired a lawyer. The class action suit will address the " systematic rape of producers" in a system supervised by the government, Donor says.

Donor says he's met with the ministry of agriculture who told him the best way to effect change is to propose grass roots resolutions at their annual meeting. That has been done, says Donor, but adds responsibility comes from the top down and isn't there. As a consequence, he and his group have also asked for an OMAFRA audit of the Farm Products Marketing Commission and how the wheat board conducts business.

The crux of the problem is price. The group wants to know why wheat farmers in Ontario are getting a lower price than farmers in the United States. Donor lays some of the blame at the feet of the Farm Products Marketing Commission. Its mandate is to keep things fair and square between processors and producers. Donor accuses the commission of not looking after the well-being of producers.

He says the commission has allowed the price to be dominated by the "Toledo bid price" which shields Canadian millers from the global marketplace, though there is some pressure from the Chicago Commodity Exchange. As a result, Ontario producers have been losing US$0.20 per bushel on wheat.

The commission has allowed the millers to set up a near monopoly, Donor says. The same people who own the mill in Toledo, own two major mills in Ontario, including the Nabisco mill in Niagara Falls.

Ontario's 16,000 producers plant close to one-million acres annually, with soft white wheat about a third of the total.

Chairman of the wheat board, Jaye Atkins, disputes Donor's claim that millers are getting a sweetheart deal, saying prices are run off world markets. The Toledo bid price is used but is adjusted by a formula. "The board can't react as quickly as some producers wish, because the board can't cherry pick, as an individual producer can," he said. The pool tries to get a better than average price. But he warns that "We're in the cookie cluster of Canada." Ontario producers could hurt their home market by being too tough, he suggests.

The board signed a two-year policy agreement last year because it had to supply some stability, he said. In hindsight, that hasn't been the best deal, he admits. If the market had gone the other way the board would have looked better.

A second member of the dissenting group, Bruce Pearse, of Sunderland, said that Weston made a 38 per cent profit last year while many wheat producers had negative returns. Though quantity assurance (an agreement to supply the baking industry a certain quantity) was struck down by resolution two years ago, he says it appears Ontario millers still have first right of refusal for all Ontario wheat. "The system is set up to favour processors," he says. The wheat board denies the accusation.

When asked about a cost of production formula, Atkins said he didn't know how much it cost to produce an acre of wheat. Donor counters that the board has to negotiate with an understanding of 

cost of production. Otherwise, wheat will be sold too cheaply, he argues.

Producers are also upset over marketing costs. While the price of wheat has dropped from $189 per tonne in 1989 to $109 in year 2000, the cost of marketing has risen from $33 to $41.

"That left a producer with $94. How can you sell below the value of corn?" Pearse asks.