Canadian grain growers need to follow two basic rules when they sign a grain declaration form.
They need to know what kind of grain they’re delivering and they need to declare it accurately.
According to the Canadian Grain Commission, most major grain companies have used commercial grain declarations for about a decade. But now, the declarations are law.
The commercial declarations require grain growers to specify the variety of grain being delivered, and to declare that the grain being delivered is an “eligible variety”. In other words, it must be a variety that can be assigned a grade, bought and sold commercially in Canada.
Essentially, the commercial declarations have helped to ensure that different varieties and classes of grain are properly handled and segregated for marketing purposes.
Many licensed grain elevators have been using commercial grain declaration on a voluntary basis since a grain identification system known as kernel visual distinguishability, or KVD, was eliminated as a condition of varietal registration.
But changes that took effect on Aug. 1, 2020 mean that grain declarations are now mandatory in Canada and are regulated by the Canadian Grain Commission.
Signed declarations are required for commercial deliveries of all official grains that are covered under the Canada Grain Act.
Failure to sign a form can result in fines of up to $6,000 to $12,000 for producers and $9,000 to $18,000 for companies that buy and sell grain.
The same penalties may be applied in instances where growers or grain handling companies make false declarations.
Remi Gosselin, a spokesperson for the CGC, said most growers who have been delivering grain into the commercial grain handling system are already familiar with grain declaration forms.
What’s changed is that the declarations are no longer just a contractual agreement between a grain company and a grower. They are now backed by law.
The changes were made after American grain growers complained that they were unable to sell American grain into the Canadian grain handling system, while Canadian grain growers could sell their grain into the grain handling system in the United States.
“As a consequence of the implementation of CUSMA (the Canada-United States-Mexico trade agreement) and changes to the Canada Grain Act, portions of those commercial declarations are now what we call statutory, or they become part of the regulatory system,” Gosselin explained.
“If U.S. producers deliver a registered variety in Canada, they are now eligible to receive an official grade (for their grain) but all of this is contingent upon the provision of a signed declaration form,” he added.
“It certainly removes one of the key concerns that U.S. producers had in terms of equitable treatment in both countries and, at the same time, from the government of Canada’s perspective, this concession was minor in nature.”
The intent is to allow U.S. growers to sell grain in Canada, while providing additional protections to Canada’s grain quality assurance system.
The changes should not have a significant impact on how Canadian grain growers conduct their business, although it will require them to sign a form and declare accurately the type of grain they deliver.
Producers will be required to sign one declaration form per year with each licensed grain elevator to which they deliver grain.
“We’ve tried to implement this with a great deal of flexibility … so some (elevators) … may have chosen to combine our (CGC) declaration form with their own existing forms. Otherwise, if grain companies don’t have their own form, they would be using ours,” Gosselin said.
Although the Canada Grain Act does contain provisions for penalizing growers or companies that fail to comply with the new order, Gosselin said the CGC’s enforcement efforts will be focused primarily on educating growers and grain facilities about their new obligations.
In some cases, elevators and other grain handling facilities that were licensed by the CGC were not using any declaration forms.
For those facilities and the growers they buy from, the declaration forms will be new
Oilseed deliveries to canola crushers, for example, will now require a declaration form to be signed, as will pulse crops delivered to licensed processors.
“It’s important for canola growers to know that the declaration now applies to sales made to canola crushers,” said John Guelly, chair of Alberta Canola.
“This change adds an additional level of liability that farmers need to be aware of,” added Todd Hames, chair of the Alberta Wheat Commission.
“Grain declarations have always been contractual agreements between the farmer and the grain company, but now we have a regulatory requirement that could result in legal ramifications.”
Ward Toma, general manager of the Alberta Canola Producers Commission, said the new regulatory requirements won’t likely result in any noticeable changes for the majority of commercial grain transactions.
“What’s new is that there’s now a new regulation that has mandated this … so these declarations have to be signed on all grain sales ….”
Being in contravention of the regulations can result in fines and penalties, he added.
“Before it would have been up to the grain company to enforce these declarations…. Now, the grain commission is in charge of enforcement so it’s taking that enforcement responsibility away from grain companies and putting it in the hands of the commission.”