cropshere Funding halted to Flax Council of Canada when canola council merger talks failed
The SaskFlax annual general meeting was full of mixed messages.
There was plenty of talk about the glorious opportunities awaiting the crop in the food sector.
There was also talk about the serious financial struggles facing provincial and federal flax organizations.
The biggest bombshell came when Brian Johnson, chair of the Flax Council of Canada, announced that the council was closing its Winnipeg office after 32 years and looking for new ways to fund the organization.
“Over the last few years the flax council has been struggling as the size of the crop drops,” he said.
Flax acres have been cut in half from about two million acres in the late 1990s to one million acres last year. Fewer acres mean fewer levy dollars to fund the organization.
There was also pressure from the organization’s major industry funders to form a national oilseed council in conjunction with the Canola Council of Canada.
Johnson said the idea of forming a joint council was “thoroughly discussed” but in the end it was rejected by the canola sector.
“They wanted to maintain the structure that they have,” he said in an interview following his presentation.
The inability to form a national oilseed organization resulted in some of the flax council’s larger members pulling their funding, necessitating cost cutting measures.
In addition to losing financial support from major players in the Canadian grain industry, there was the ongoing problem of some smaller exporters and processors refusing to pay the voluntary levy.
“We’ve always had an issue with companies that have not wanted to contribute,” Johnson said.
“There has always been slippage there.”
The council will continue operating as an entity but one with no office, no president, no agronomist and no administrative assistants.
It will be run by an executive committee that meets on a weekly basis, and one person will be employed to answer phones, maintain the website and conduct other daily activities.
“We are going to continue and we will restructure, we will come up with a funding model that works to keep this operation going,” said Johnson.
Flax still wants to collaborate with canola in some way. Other ideas being explored are a more affordable levy that elicits participation from all companies in the industry as well as possibly garnering contributions from end users.
SaskFlax chair Shane Stokke said losing the council’s Winnipeg office and its associated staff leaves a big void.
“The exporters are going to need some kind of voice somehow,” he said.
It is also a blow to the industry’s market development and promotion efforts.
SaskFlax will pick up some of the slack. It is already doing market promotion on food flax in North America and China, but it doesn’t have the resources to venture beyond those key markets.
SaskFlax will also be filling another gap. The organization is hiring a new staff member this year that will be responsible for research and agronomy.
“This is a big step for our organization. SaskFlax has only had an executive director and one office personnel since the organization started,” said Stokke.
SaskFlax executive director Wayne Thompson said the council did a lot of work accessing federal government programs, another area that needs to be addressed.
The funding problems are not limited to the national organization. Eric Fridfinnson, chair of the Manitoba Flax Growers Association, told delegates the association is exploring amalgamation with four Manitoba commodity groups.
He said the crop is losing ground to soybeans in the province, dropping below 70,000 acres last year, the smallest he can remember.
Fridfinnson said small crops like flax have a difficult time operating with a tiny budget.
“We do have a danger of too large a percentage of our actual budget just being taken up by administrative overhead,” he said.
A final decision on the proposed amalgamation will be made at the association’s annual general meeting in 2019.
Stokke stressed that despite all the structural changes happening at the provincial and federal levels, he is optimistic about the outlook for flax because Health Canada approved a health claim for the crop in 2014, which has opened up markets in the food sector.
“The opportunities for flax in the next five to 10 years are pretty phenomenal,” he said.