Cereals Canada: one voice for farm groups?

Cereals Canada structure


There was a time when farmers grew grain, sold it to the local elevator and that was that. Now, producers are expected to work with grain companies and life science corporations on objectives that benefit the entire grain industry, from farm to food processor. Most farmers acknowledge that collaboration is necessary, but some producers are worried that farm groups are losing their voices as the relationships become too close.
Cereals Canada, a group trying to link farmers, grain handling companies and life science corporations, has become symbolic for these new networks.
Some farm groups, like Sask Wheat, are pushing back. They haven’t joined Cereals Canada because they are determined to remain independent.
In a two-part special report, Robert Arnason and Ed White look at whether Canada’s cereals crop sector can unite, while balancing the needs of all parties involved in the value chain.

For Leo Meyer, writing the mission statement for a farm group is a simple task. Farm organizations, in his mind, exist for one reason: to serve the interests of producers.

“Whoever… is engaged with a farm organization, they need to realize that their constituency is the farmer,” said Meyer, who farms in the Peace River region of Alberta and is a Grain Growers of Canada director.

Now that the CWB marketing monopoly on wheat and barley has ended, Meyer said the need for an agency to serve farmers is more important than ever.

When the CWB was a government agency, it operated as more than just a grain dealer. It lobbied on behalf of farmers to the federal government and to other businesses.

To fill the gap created when the CWB’s role changed, new cereal crop commissions and associations on the Prairies built alliances with the various players in grain industry.

Cam Dahl, president of Cereals Canada, said the organization aims to smooth the way for communication between farm groups, grain companies and life science corporations, to help develop a united strategy.

“The goal is to increase the profitability of the entire industry…. That’s not going to be accomplished by (just) one part of the value chain.”

If Canada’s cereal sector is going to evolve and expand, it needs a group that can identify priorities and speak on behalf of the whole industry, Dahl said.

“If we can present governments with a common voice and a common message, it’s a lot easier to get things done.”

Meyer said it’s fine for all parties to work together to advance a particular cause like the cereal crop sector, but farm group leaders also should realize it is a fine line between collaborating with large corporations and being captive to their interests.

As an example, international grain merchants recently raised alarms about the declining quality of Canadian wheat, saying customers are dissatisfied and want to buy wheat from other countries.

However, few farm groups have publicly expressed concerns about the situation. If producer organizations are unwilling or unable to speak openly about a threat to Canada’s reputation, farmers will suffer the consequences, said Meyer, who is also president of the Alberta Oats, Rye and Triticale Association.

“There are people in the world, who buy millions of tonnes of grain, who say Canada isn’t the number one choice for quality supply for wheat. This is serious.”

The founding directors of Cereals Canada, including Richardson International executive Jean Marc Ruest, decided three sectors would have a similar say in the organization: producer groups, grain companies and life science/seed companies.

Dahl said the configuration ensures that Cereals Canada represents the entire value chain.

Several groups accepted the conditions and signed on. But the Sask-atchewan Wheat Development Commission has refused, and Sask-atchewan grows about 50 percent of the wheat acres in the country.

Bill Gehl, Saskatchewan Wheat Development Commission Chair, said the organization’s board has had discussions with Cereals Canada. He said they have issues “with the democratic structure of Cereals Canada” and have expressed those concerns in writing.

“When we receive some of those answers… we will cross that bridge.”

Cam Goff, who farms near Hanley, Sask. and chairs the Saskatchewan Barley Development Commission, believes producer groups must remain independent so they can challenge the grain industry or government.

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He said Sask. Barley plans to work with other groups to build a robust cereal crop industry, but said Cereals Canada isn’t a suitable partner.

“The grain companies and the life science companies, their goal is to make money for themselves… or for their shareholders if they’re a public corporation. Where they get that money is from farmers,” Goff said. “The problem with a organization like Cereals Canada, you’re almost overwhelmed by those… companies.”

Gehl said Sask. Wheat will co-operate with wheat commissions and associations in other provinces, but he’s not sure that Sask. Wheat can collaborate with grain elevator companies and also fully represent farmer interests.

He said his organization agrees with other players in the industry far more often than it disagrees, but when it comes down to fundamental issues, the organization has to be responsible to one master.

“We answer to Saskatchewan levy payers. It’s pretty simple.”

During the grain shipping crisis of 2014, dozens of vessels were lined up outside the Port of Vancouver, railways struggled to move a record crop to port and cash bids plummeted at prairie elevators. Despite the crisis, a few farm groups said little to nothing publicly about the calamity, Meyer said.

“When you had a completely collapsing wheat market… you would expect that a wheat commission in a province would specifically stand up,” said Meyer. “We saw that much more vigorously happen in Saskatchewan. They more independently and properly represented (farmers) than, in my view, we saw in Alberta.”

He added the silence was unacceptable because Western Canadian farmers lost billions in 2013-14.

“When farmers are affected in such a massive way… you need to have organizations that clearly go to bat for farmers. They can’t keep holding the hands of the minister. They can’t keep holding the hands of industry. They are being paid, by farmers, to do their utmost and make it very clearly understood that this (circumstance) is not acceptable.”

In 2014, Western Barley Growers Association issued several public statements condemning the performance of grain companies. In one release they said grain handlers “are not concerned with falling grain prices and the inability of farmers to ship their grain quickly.”

Doug Robertson, WBGA president, said it’s possible to criticize and maintain relationships with industry reps.

“We didn’t get much grief from the grain companies over those comments.”

Goff said Sask Barley has signed on to the Barley Council of Canada because producers have more influence in that organization.

The Barley Council, similar to Cereals Canada, plans to be a leader for all players in the value chain.

On its website, the Barley Council says “producers and industry members have equal representation at our board table.”

Brian Otto, Barley Council chair and a farmer near Warner, Alta., said the governance structure was less controversial than anticipated.

“As a producer, I wondered whether if our industry partners would accept the makeup of the board of directors, seven producer groups and seven from the industry,” said Otto, who has been a director on numerous boards, including the Alberta Barley Commission and the Western Grains Research Foundation.

“There was no objection… because it makes for a strong, national voice for barley.”

Otto said Canada’s barley sector benefits from a unified voice. It helps attract public and private investment for research or garner support for market development.

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Besides having an equal stake in the game, Barley Council directors can publicly object to the organization’s policy or industry proposals, Goff said.

“That’s crucial because farmers have to know that things aren’t a done deal,” he said. “We (farmers) can stand up and say: ‘No, this is not good for farmers. This is not the best way forward.’ ”

Cereals Canada also permits dissent, but has adopted a more formal policy.

“As a board member you’re supposed to accept the majority (decision),” said David Rourke, a farmer from Minto, Man., who represented the Manitoba Wheat and Barley Growers on the Cereals Canada board.

“But if you just can’t, if it’s a bad thing for your organization or your group, you can express that in writing to the board… and if you can’t resolve it around the board table, you’re free to (state concerns publicly).”

Rourke said he takes no issue with the dissent policy or the board composition of Cereals Canada.

He said Saskatchewan commissions may oppose the structure of Cereals Canada, but farmers need to talk to industry representatives.

“It’s a very powerful board. There are presidents and vice-presidents. Where else do I get a chance to sit across the table from Jay Bradshaw (of Syngenta Canada)…? Where else do I get a chance to talk to Jean Marc Ruest (of Richardson International) about basis levels…? If you’re not giving your point of view, they don’t even know where you’re coming from.”

Otto agreed, noting those conversations broaden a farm leader’s perspective, which promotes co-operation between producers and company officials.

“We all know our own industry. As a farmer, I know my farm’s business and my challenges… but my industry partners, the malt industry, the feed industry or the feed manufacturers, I don’t know the challenges they face.”

Rourke no longer sits on the Cereals Canada board but he hopes the Saskatchewan commissions sign on because their contributions are needed to defend farmer interests.

If they join and feel their concerns aren’t being heard or the group isn’t evolving to accommodate producer needs, they can always quit, Rourke said.

“What power does Cereals Canada (really) have? If farmers aren’t making money and the grain companies are making all the money, something is going to change.”

Cereals Canada: who’s in, who’s not

In:

  • Alberta Wheat Commission
  • Atlantic Grains Council
  • B.C. Grain Producers Association
  • FPCC (Quebec)
  • Grain Farmers of Ontario
  • Manitoba Wheat and Barley Growers Association

Out or not invited to join:

  • Saskatchewan Wheat Development Commission
  • Saskatchewan Barley Development Commission
  • Alberta Barley
  • Winter Cereals Canada
  • Manitoba Corn Growers Association
  • Prairie Oat Growers Association

Related stories in this Special Report:

How the Canola Council of Canada strikes a balance between industry and farmer advocacy

Consensus critical when determining course of action

Culture of respect key for oats

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Can farm groups partner with industry yet be independent?

  • Dayton

    Cereals Canada? It may have one voice but the average farmer won’t be heard. They need the token producer so it appear they have consensus, that’s it nothing more.

  • ed

    Cereals Canada could have fought hard to keep the CWB single desk but they not surprisingly completely dropped the ball on that one. One of the only price discovery mechanisms available to farmers since the thirties next to droughts or floods. These types of “Hey farmers, let’s grow our way out of price depressing gluts!” corporate embedded groups are just a covert way of promoting abject and sustained slave labor. Farmers can’t get a voice there and should make sure their check off dollars are recovered so that Cereals Canada can not inflict further harm to the producers. They have however got a golden opportunity right now to redeem themselves by helping to rebuild a stronger collective sale agency for farmers in the west in conjunction with the provinces of Manitoba and Alberta and perhaps soon Saskatchewan. It could have way more, if not all grains on such a sales agency which by the look of the wheat trial balloon experiment would almost immediately raise these grain prices at least 50% to as much as double. That would add quite a bit to farmers bottom lines on a forever basis. Sweet deal for farmers and certainly would make Cereals Canada look good for once. Let’s see how they do with actually doing something “for” farmers.