Levies on top of levies is worrisome trend

We have a confusing hodgepodge of crop checkoffs, and it’s only going to get worse.

The CWB monopoly created a handy way to deduct wheat and barley check-off money. It came off producers’ final payments, negating the need for point-of-sale deductions.

Point-of-sale deductions will begin after Aug. 1 and the money will ultimately go to the Western Grains Research Foundation, the Canadian International Grains Institute and the Canadian Malting Barley Technical Centre.

These organizations do great work and most producers understand their value. The checkoff will remain mandatory but refundable. However, the flow will no longer be as simple.

The federal government plans to turn over administration of the levy to the Alberta Barley Commission. Interestingly, the barley commission uses Levy Central in Saskatoon to collect its own levy on barley, and it will likely be Levy Central that collects the new point-of-sale levy.

Alberta already deducts a barley levy, so the new point-of-sale barley levy will be 56 cents a tonne on Manitoba and Saskatchewan barley but only four cents a tonne on Alberta barley.

So what is Levy Central? Operating out of sight to most producers, it is run by the Agriculture Council of Saskatchewan. About a dozen commodity organizations use Levy Central’s services because it’s far more efficient for one organization to deal with grain buyers on the various levies.

So if the plan proceeds as expected, the new wheat and barley levy will be collected by grain buyers and passed to Levy Central, which will in turn pass it along to the Alberta Barley Commission, which will in turn divvy it up between the three research and market development organizations.

The barley commission will be responsible for handling producer refund requests.

The plan is transitional, with change expected within five years. The government is trying to tread lightly. After all, this is farmer money. However, a decision has to be made on how funding is going to flow after wheat and barley marketing is changed.

Meanwhile, wheat producers in Alberta have set up their own provincial wheat commission and there are discussions in Saskatchewan and Manitoba about doing the same. That means two levels of checkoffs on the same commodity. All the money is going to worthy causes, but it’s another hand in farmers’ pockets.

Most of the other commodities have provincial levies and there seems to be little hope of bringing these under one umbrella.

Each prairie province has its own canola levy. Mustard has a levy in Saskatchewan, but the roughly 25 percent produced in Alberta is not subject to a levy. Alberta mustard producers get a free ride on the research work funded by Saskatchewan mustard producers.

Some of the levies are based on a set amount per tonne. Others are set at a small percentage of the gross sales value.

It’s confusing and there is duplication of administration, but easy solutions are elusive. Provincial levies have been established with the support of producers to fund research and market development.

Australia has one centrally administered levy on all commodities. It’s higher than what Canadian farmers are paying, but collection and administration are simplified. This is often held up as a model for what Canada should adopt, but we’re a long way from going that direction.



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