Aug. 1 will mark the one year anniversary of CWB becoming voluntary, and for wheat and barley growers it has been a smooth transition to the free market.
It has also been a prosperous year of good crops, good quality and good prices.
However, the celebration of marketing freedom will be marked by a certain sting because on Aug. 1, farmers and exporters will pay significantly higher user fees for the services provided by the Canadian Grain Commission.
The federal government and our industry have cost shared the commission’s operations approximately 50-50, due in part to the greater public good provided through research and food safety.
However, the government is now lowering its contribution to less than 10 percent, while the United States, one of our major competitors, covers 37 percent of the cost of inspection services.
This means an average farmer who crops 5,000 acres, produces a tonne per acre and delivers most of it to the grain elevator will see costs jump from about $5,000 today to almost $7,200, an increase of 47 percent.
Many farmers won’t see the in-crease because it will be buried in the price they receive, but it will be coming out of their pockets, one way or another.
The commission provides essential quality checks for grain. The service helps ensure that the grain that goes into your daily meals is safe for Canadian consumers and is also an extremely important part of our trade and market access for global customers.
This food safety assurance, plus the jobs involved in moving, processing and exporting our grain, provide a substantial service to the Canadian economy far beyond the farmgate.
Farmers are willing to pay for our share of running the grain commission, but to manage those costs we need to see substantive modernization of the commission.
The government started the process last year by removing inward inspection requirements, which will save millions of dollars, moving producer security requirements to an insurance based model and having the grain commission monitor outward weighing at ports.
Grain Growers of Canada feel these steps were positive, but more change is needed to ensure that services are streamlined and reformed to meet today’s marketing needs.
In our view, there are three key pieces the government needs to act on this fall.
- The Grains Research Lab is a core division of the commission, which provides significant value to farmers, Canadians and our international markets. It must be adequately funded and staffed.
- The addition of value-added processors to the grain commission’s mandate would allow farmers the right of neutral grading, similar to what happens now at grain elevators.
- The governance model must have direct accountability to the farmers who will be footing 90 percent of the operating costs.
The reform process has begun. Listening to new voices will breathe new life into the grain commission and can only make it stronger and more vital, helping it adapt to changes that are happening today and tomorrow in our grain industry.