Grain market deregulation: a case study of the Canadian and Australian wheat boards

• Author: Albert Boaitey
• Date: 01 August 2013
• Published date: 01 August 2013
• DOI: http://doi.org/10.1002/pa.1467

■Academic Paper

Grain market deregulation: a case study of

the Canadian and Australian wheat boards

Albert Boaitey*

Resource Economics and Environmental Sociology, University of Alberta, Edmonton, Canada

The recent deregulation in Canada’s grain marketing sector with the resultant removal of the Canadian Wheat

Board’s single-desk status presents a useful case for policy and institutional analysis. This paper presents a compar-

ative analysis of the Canadian case using deregulation in Australia as a reference. Case studies of deregulation in

the two countries are presented, and the different approaches are compared. This is to predict the likely trajectory

along which the Canadian Wheat Board may evolve. Copyright © 2013 John Wiley & Sons, Ltd.

INTRODUCTION

State trading enterprises (STEs) with export sales

monopoly power have been popular in Canada,

Australia, New Zealand and Argentina, marketing

commodities such as wheat, barley and dairy products

(Alston and Gray, 2000). For wheat, the Canadian and

Australian wheat boards were key players in the

global wheat trade jointly accounting approximately

30 per cent of wheat exports from 1993 to 2000

(Worden, 2004). Historically, the two organizations

were regarded a s near sister, STEs ha ving had simi lar

characteristics, that is, price pooling, cost pooling and

grain quality control (Cater and Wilson, 1997).

Over the last three decades, however, there has

been a trend towards deregulation as a number of

STEs in the grain marketing sector have been

privatized. The Canadian Wheat Board (CWB) is

the most recent case of deregulation of a major

STE in the global wheat market. Until the recent

removal of its single-desk status, the CWB exercised

single-desk selling authority over the marketing of

prairie wheat and barley for domestic consumption

and exports (Furtan, 2005). The enactment of the

Marketing Freedom for Grain Farmers Act 2011

marked the formal commencement of the process

of full privatization or possible dissolution.

This change has instigated heightened activity in

Western Grain Handling and Transportation System

(WGHTS). Expectedly, a number of studies (Boyd,

2011; Mussell et al., 2011 etc.) have attempted to assess

the implications of this structural transformation and

the possible trajectory along which CWB could evolve.

A less examined yet relevant dimension of the ongoing

discourse is the extent to which CWB’scurrent

transformation compares with that of previously

undertaken by the Australian Wheat Board (AWB).

Similarities in history, structure and functional

characteristics notwithstanding, the AWB is at least

two decades ahead of the CWB in terms of reform.

The evolution in the former jurisdiction has been

noted to present a useful model for the process of

deregulation of STEs in other countries (McCorriston

and MacLaren, 2007).

This paper therefore, analyses the post-CWB era,

through the lenses of the AWB. Case studies of

deregulation in the two countries are presented,

and the different approaches are compared. This is

to predict the likely trajectory along which the

CWB may evolve. The specific questions addressed

include the following: What are the differences and

similarities in policies implemented in the two juris-

dictions? and What were the (possible) outcomes?

The rest of the paper is organized as follows. The

second section presents a review of the literature on

*Correspondence to: Albert Boaitey, Ph.D. Student, Resource

Economics and Environmental Sociology, University of Alberta,

Edmonton, Canada.

E-mail: boaitey@ualberta.ca

Journal of Public Affairs

Volume 13 Number 3 pp 282–287 (2013)

Published online 3 June 2013 in Wiley Online Library

(www.wileyonlinelibrary.com) DOI: 10.1002/pa.1467

Copyright © 2013 John Wiley & Sons, Ltd.