August 15, 2012 7:52AM

Canadian Wheat Board Loses Monopoly Powers

Reform has finally caught up with one of North America's longest-entrenched socialist institutions, the Canadian Wheat Board. From the 1940s down through the first of this month, farmers in western Canada were legally forbidden to sell their wheat and barley other than through the official board, which by abolishing competition between farmers was supposed to assure fairer and higher prices. (Technically the Board enjoyed a "monopsony," which is what economists call a monopoly over buying something as distinct from selling it.) Farmers have complained for years that the board not only behaved arbitrarily and was hard to deal with but also that it often paid less for grain than farmers in nearby American states like North Dakota were getting. The board continues to exist, but stripped of its compulsory powers it will need to persuade growers to trade with it voluntarily. Economist David Henderson, who lived in a Manitoba farm community as a kid, has more.

The battle to free the farmers was long and fierce -- the left-leaning New Democratic Party (NDP) and National Farmers Union greeted the August 1 decontrol with undisguised bitterness -- and no one played a more central role in the victory, or put more political capital on the line, than Canadian Prime Minister Stephen Harper. Per the CBC,

Harper has a long history of supporting the farmers who fought the wheat board. In 2001, he wrote a review of a book on that battle, calling the wheat board an "oppressive monopoly" that used "legal bullying" against farmers.

Harper and Agriculture Minister Gerry Ritz were at the farm to mark the first official day in which prairie wheat and barley farmers can sell their products to whomever they choose.

Harper is also pardoning a group of farmers arrested under the old law. Last fall, I had the chance to meet Saskatchewan Premier Brad Wall, another key backer of the reform, and a couple of his aides at a free- market gathering out West. When he heard I was with the Cato Institute, Wall said he'd long been a warm admirer of the Institute's work. With good ideas as with other good things: "first the blade, then the ear, then the full grain in the ear."