The Canadian Grain Commission is quietly conducting a major review of Canada’s grain grading system.
In the fall, the commission formed a Grading Modernization Consultation Group comprising representatives from grain companies and producer groups to review all aspects of grain grading in Canada.
There was no news release or public notification that the review was underway. The commission said it is an internal process involving the standards committees.
One of the primary thrusts of the review is to consider moving from a subjective grading system to more of an objective one involving tests and numerical values assigned to factors such as falling number.
Tom Steve, general manager of the Alberta Wheat Commission, said it is a natural evolution for buyers to pay for grain based on specifications rather than the number-based grading system.
In fact, it’s already happening at some elevators.
“We need to move to a system where the value that the farmer gets needs to match what the commodity is actually being sold as to the end use customer,” he said.
Steve said a lot of wheat crops last year received rain at harvest and looked awful, but the falling number met specifications and farmers should have been rewarded for that.
He applauded the commission for undertaking the review, but wishes it would have made it a more public process with input from a broader spectrum of the grain industry.
Wade Sobkowich, executive director of the Western Grain Elevator Association, said there is a reason grain companies buy based on numbered grades and sell based on specifications.
“It’s an organized way to purchase grain in the system versus buying on specification with a different value for every permutation of specifications that might come forward,” he said.
Sobkowich said the WGEA hasn’t taken any formal position on the issue, but many challenges would have to be overcome in moving to a specifications-based grading system.
For instance, end use customers buy grain based on factors such as falling number, while companies buy it from farmers based in part on sprout damage.
That is because sprout damage provides an indication of falling number without having to invest in an expensive lab for testing samples.
Sobkowich wonders if farmers would be willing to pay for a system that requires testing when there will be no more overall value for the grain they deliver, just a redistribution of how they are paid.
Commission spokesperson Remi Gosselin said it is unlikely that the numbered grading system will disappear altogether.
“Where grades continue to make sense, they will continue to be applied, but there are some areas where we could work in more flexibility,” he said.
“While international trade of grain is increasingly based on specifications, most grain companies and producers support the grain grading system because it makes it easier to segregate in the bulk handling system and it keeps costs lower.”
Gosselin said the review, which is in its early stages, is much broader than just the subjective-objective issue.
“Many aspects of the grain grading system have been identified as requiring attention,” he said.
For instance, there will be a review of sampling procedures, the definition of commercial cleanliness and an exploration of fusarium damage and its relationship to end-use functionality.
“This review is about ensuring that the grain grading system continues to be relevant,” said Gosselin.
The review will take two or three years with recommendations presented to the standards committees, which will ultimately determine if changes should be made.
Steve said that timeline doesn’t sit well with his organization.
“Our preference would be to accelerate that,” he said.
Former National Farmers Union president Stewart Wells doesn’t see any problems with reviewing the grading system.
“I don’t think there is anything to be nervous about with a review as long as people are paying attention,” he said.
Wells said there is no question that the grain companies are paying attention.
“(They) are keenly aware and have highly skilled and highly paid lobbyists that are working on these files every day,” he said.
The only thing Wells doesn’t want to see is a gutting of the grain commission and a shifting of power to the grain companies.