Canada’s largest agribusiness has pulled its funding from three of the country’s national oilseed organizations.
Richardson International is no longer funding the Canola Council of Canada, the Flax Council of Canada and Soy Canada.
“We don’t think we got the value out of it,” said Jean-Marc Ruest, Richardson’s senior vice-president of corporate affairs.
The company was spending more than $1 million a year funding the three organizations.
Richardson had been discussing its concerns over mandate, structure and governance with the organizations for two years and didn’t get the response it was hoping for.
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“We’ve now discussed it long enough, and we feel strongly enough to say that we can’t continue down this path anymore,” said Ruest.
He said other grain and life science companies have expressed similar concerns.
Jim Everson, president of the canola council, said all of the council’s other funders continue to support the organization.
Exporters such as Richardson spent $2.2 million funding the canola council in 2016, crushers paid $1.96 million, grower groups $3.54 million and life science companies $520,000. The numbers for 2017 are not yet available.
Everson said the 2018 budget has been reduced to reflect the new funding reality.
The outcome for the flax council was worse. It closed its Winnipeg office and fired its staff.
One of Richardson’s concerns surrounds the canola council’s extensive work on agronomy when the private sector already has their own agronomists working in the countryside.
“Is there an element of duplication that should be looked at?” said Ruest. “Saying that they can do something doesn’t necessarily mean that they should be doing something.”
The council spent $1.16 million on its agronomy research program in 2016.
Ed Rempel, director of Manitoba Canola Growers, said he is disappointed with Richardson’s decision and doesn’t buy the company line about the council duplicating agronomy services.
“Here’s the counter to that. Their agronomists are generalists. Our agronomists are specialists. Big difference,” he said. “We spend a lot of time and money developing those people into canola experts. We don’t want generalists.”
Rempel also wonders why a big grain company can’t afford to spend slightly more than $1 million on levies when they likely offset that through the basis they charge farmers.
“Who do you think is paying the freight for the exporter portion, anyway?” he said.
Another pet peeve for Richardson is why the canola council devotes so much of its resources to market development for a well-established, 23 million acre crop that is known around the world.
The council spent $4.7 million on market development and market access in 2016. It is by far the biggest expenditure for the organization.
Everson said the council intends to review its strategic priorities this year.
Ruest said Richardson hasn’t shut the door on funding the council in the future if certain changes are made.
“If ultimately they decide that they want to reconsider and reform, we’d be happy to take a look at it at that point,” he said.
Another thing Richardson wants to see is the formation of one national oilseed council so it doesn’t have to send people to three different sets of board meetings.
“The same issues are being discussed at multiple tables by the same people,” said Ruest.
The commodity groups rejected the merger idea. He said the smaller organizations felt they would be swallowed up by canola, while canola worried that its substantial resources would be diverted to prop up the smaller crops.
