How did the Canadian Wheat Board work, and was dismantling it a good or bad thing?
In: Economics
In short, the law prior to 2012 required all farmers to sell their wheat to the wheat board. The wheat board would then resell this wheat to actual customers. In a way, it was like a union for wheat growers and they have collective bargaining power when selling the wheat.
The benefit is that it simplified things for the farmers. They would always have a buyer for their wheat at all times during the year, so the flow was fairly stead and predictable. The wheat board as a collective unity could get better prices.
The negative is that it was mandatory and so did not allow the farmers to search the free market for a better price. It prevent the farmers from perhaps selling their wheat a better prices during certain peaks in demand. Similarly, it did not allow farmers to sell at a lower price to perhaps undercut a competitor.
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