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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