The Western Grains Research Foundation is losing a key source of its core funding, and that is leading to a dramatic shift in the type of research it will be managing in the future.
The foundation had been receiving 30 cents per tonne from the wheat portion and 50 cents per tonne from the barley portion of the Western Canadian Deduction.
That deduction expires July 31.
Many of the provincial wheat and barley associations will be increasing their checkoffs by the amount that was being collected in the deduction and taking over the varietal development and other work that was being managed by the WGRF.
Executive director Garth Patterson said the foundation will be taking a $7.5 million hit to its annual revenues.
He is budgeting for $9 million in total annual revenue going forward.
That doesn’t include extraordinary funding such as when the railways exceed their maximum revenue entitlements, which can’t be counted on as a stable source of funding.
To put that in perspective, the WGRF had $23 million in revenue in 2016 and $29 million in 2015. Those two years were unusually high due to railway overages.
The foundation started managing the wheat and barley checkoff in the mid-1990s when there were no wheat and barley commissions.
The checkoff has helped pay for the $148 million invested in research projects since 1981, making the WGRF the largest producer funder of research in Canada with more than 250 active projects.
He said now that there are associations in each of the prairie provinces, it is logical that they collect and dole out the check-off dollars as they see fit, similar to what the canola and pulse groups do.
“It didn’t make sense to flow the money through us, and we understand that,” said Patterson.
The WGRF boad has created a four-year transition plan through 2020 to adjust to the new funding reality.
One of the main components of the plan is that the WGRF will develop and lead a new integrated crop agronomy research cluster.
“We see that as a leadership role we can play because we’re a multi-crop organization and we cut across Western Canada,” he said.
Research topics will include crop production systems, pest monitoring and management, nutrient management, crop adaptation to climate change, soil health and genomic tools.
There will also be more support for intermediate acreage crops that don’t have a lot of resources, such as corn, soybeans, fababeans, sunflower, mustard, canaryseed, oats, flax and winter cereals.
The WGRF has other sources of funding to draw on to fund such work, primarily the interest earnings from its $130 million endowment fund, which generates $7.5 million per year.
Another $6.7 million comes from sources such as third party administration fees and rail revenue overages.
There is also a wheat reserve fund of $34.6 million, a barley reserve fund of $2.7 million and wheat and barley royalties of $1.9 million per year.
That money will allow the WGRF to meet its funding commitments to Agriculture Canada and university wheat and barley breeding programs through 2020, ensuring there are no funding gaps in those programs as they set up new agreements with the commissions.
It will also be spent on funding the new wheat and barley research clusters, which will be led by the commissions.
Another component of the transition plan is committing $28 million of endowment fund money to fund 150 research projects on a multitude of crops.