During his 25 years at the Canadian Grain Commission, Fraser Gilbert never had to test grain for schwarzbesatz.
Now, as manager of agri-services for SGS Canada Inc., that’s one of the services he provides to Canada’s grain industry.
“I’d never heard of it until a year ago myself,” the former CGC chief grain inspector said with a laugh as he signed off on an invoice on a couple of vessels heading for Europe.
Schwarzbesatz is the European term for miscellaneous impurities in grain. Testing for European specifications is one of the niches that SGS has established as it tries to gain a foothold in Canada’s grain industry.
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It’s not an easy task. When Canadians think about grain inspection services, they think of the grain commission, the government agency that is virtually synonymous with Canada’s grain quality control system.
“For the last 70 or 80 years there has only been the Canadian Grain Commission, so people have that mindset,” said Gilbert, who joined SGS in 1997. “It’s tough for them to think, ‘let’s give SGS a chance’.”
That means one of the biggest challenges facing SGS Canada is to make its name known.
“Usually when people know we’re there, they give us a try,” he said in a telephone interview from Winnipeg. “It’s just a matter of getting the word out that there is an alternative.”
In the abbreviation-infested world of agriculture, the initials SGS may be new to many grain farmers in Western Canada.
But SGS (Societe Generale de Surveillance) Group, headquartered in Geneva, Switzerland, is the world’s leading provider of testing, verification and certification services, in fields as diverse as agriculture, mining, insurance, vehicles and health care.
It has operated in Canada for more than 50 years, with major agricultural inspection facilities at Vancouver and Montreal and a presence at other grain ports. It has 480 employees in this country. The Winnipeg inspection office, with a staff of four, was opened last year.
Grain shipped through licensed facilities such as terminal elevators must be inspected by the grain commission, according to the Canada Grain Act, although others aren’t precluded from also inspecting it.
To date, most of SGS’s grain business in Canada has involved exports of special crops. It also provides analysis and documentation for inter-company trading in Canada, and inspects samples submitted by producers, dealers or processors.
But SGS has grander plans, saying the CGC should limit its activities to regulation and setting standards, and leave the job of verifying commercial sales and contracts to private inspection agencies.
In a letter sent to the the grain trade last winter, Gilbert criticized the grain commission for failing to acknowledge that the time has come to inject competition into the grain grading and quality assurance system.
“This will afford the Canadian grain industry the same benefits derived from a competitive environment that are experienced in other grain producing countries,” he wrote. “In essence it should reduce the overall cost of quality assurance.”
Gilbert said last week that SGS charges an average of 25 to 30 percent less than the CGC for comparable services like grading, weighing and inspection.
He said the company set its fees below the commission’s to make people notice.
“We think in the long run we get their attention by providing superior service, but there has to be a carrot to begin with and usually it’s the dollar,” he said.
CGC president Barry Senft said any cost comparison must take into account that CGC fees also cover other commission services like laboratory work, grain standards and producer protection.
He said if the commission’s proposal to set up a separate quality assurance fee is approved, then CGC inspection fees would be comparable to SGS.
“When we compare the costs of services, we need to be doing that with apples to apples,” he said.
While SGS is hoping for more privatization of inspection services, Gilbert said even with the status quo the company expects to expand its business, find a profitable niche and become a major presence in the grain industry.
He said some shippers request SGS certification because the company is seen as neutral, with no interest in the commodity being shipped.
By contrast, the commission, as a government agency working closely with the Canadian Wheat Board, might be seen by some customers as having an interest in promoting the export of Canadian grain.
“We’re not saying they’re biased or slanted, but they are not a truly independent third party as we are,” said Gilbert.
Senft said he has never heard comments like that from grain buyers.
Gilbert said more customers are buying grain on the basis of specifications that might not be applicable to Canadian standards.
That’s where an internationally known company such as SGS, with operations in almost every major grain trading nation, can do the job, he said.
