More cuts to CGC services advised

Fewer mandatory services | Producers’ cost will double under higher fee-for-service charges

Ottawa’s changes to the century-old Canadian Grain Commission last year are a good start but just the beginning, says a key prairie grain industry leader.


Changes in last year’s federal budget bill included ending mandatory inward inspection, but Richardson International vice-president Jean-Marc Ruest told an Ottawa conference Jan. 25 that the government should eliminate other mandatory services that cost farmers and the industry money.


Government critics have complained that CGC service cuts will hurt Canada’s grain quality reputation, but Ruest said more mandatory service cuts will not affect Canadian grain quality assurances.


“We want to pare back even further the services that are now mandatory,” he told a conference organized by the Canadian Agricultural Economics Society.


Ruest said export weighing certificates should be optional because many exports travel from Canadian grain companies to subsidiaries abroad and don’t need the government intervention.


As well, the mandatory services that remain should also be available from private service provider competitors if farmers or the industry want to go that route, he added.


Ruest argued that grain commission services now cost a 5,000 acre grain producer $8,000 a year. 


He said legislation that requires the commission to increase fee-for-service charges so it can become financially self-sufficient this year means the cost will double to $16,000 unless service costs are cut.


The cost of regulation in the Canadian grain industry “continues to be heavy,” he added.


“Regulations put Canada at a competitive disadvantage.”


However, Ruest did not limit his criticism to government regulation.


He said the industry has created too many associations and groups that claim to speak for it, often on a commodity basis. Messages to government and the public can be mixed.


“We as an industry have layered on too much cost,” said Ruest. “It is incumbent on us to reorganize ourselves in how we present ourselves.”


Ruest also revived the argument that while Canada’s wheat exports during CWB monopoly years traditionally used high quality as a selling point, emerging middle class consumers in developing countries may not pay a premium for high-protein wheat in the future.


“Growing world populations may not be looking for high quality grains for which we now receive a premium.”


Perhaps Canada should begin to concentrate more on higher-yielding but lower-priced, lower-quality grain that could be in more demand in the future, he added.

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  1. “Government critics have complained that CGC service cuts will hurt Canada’s grain quality reputation, but Ruest said more mandatory service cuts will not affect Canadian grain quality assurances.
”

    Changes at the CGC-
    Composite loading for outward CGC inspection.
    The move to oversight (not real time) from monitoring for outward CGC weighing.
    The elimination of inwards CGC inspection and weighing.
    The elimination of elevator weigh-overs {(audits) – where are the checks and balances?)
    The elimination of CGC weighing Dispute Resolution Settlement for weight disputes on rail car shipments.

    We don’t yet know the impact of these changes (elimination of services)- What type of quality and quantity issues will happen in the future? How will they be settled? What will the impacts be on Canada’s reputation? The impact on Producers?

    “the industry has created too many associations and groups that claim to speak for it”

    The CWB and CGC used to be a focal point for the industry and it appears there is a need to fill that void. Who represents producers? Are they representing producers effectively?

    “Growing world populations may not be looking for high quality grains for which we now receive a premium.”


    So will Canada continue to stand out as “the” exporter of high quality grains or just be one of the other guys in the equation?. Do we want buyers to think- Australian, American and Canadian what is the difference? Is there any? Is it better to stand out when marketing your grain or is it enough to just offer the generic.

    “Perhaps Canada should begin to concentrate more on higher-yielding but lower-priced, lower-quality grain that could be in more demand in the future, he added.”

    What do buyers want? Japan and the EU?

  2. Ronald on

    Canada`s reputation as one of the most reputable grain exporters in the world, will already be greatly damaged by the loss of federal CGC regulation throughout the industry.

    The loss-removal of CGC inward weighing and inspection services will hurt all players involved within the grain industry. Especially the producers and the customers. The grain companies will now be liable-responsible for any claims made by unhappy customers.

    To hear some producers screaming demands to remove CGC inspection services in a bid to save money is absurd and laughable.
    The grain companies will be forced to contact out to private industry in order to afford customers similar services and quality and quantity control that Canada`s farmers, grain companies and customers currently receive.

    Those costs shall all be passed onto the farmer.
    Those who foolishly cry for the removal of CGC outward inspection should be very careful what they wish for.

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