WASHINGTON, D.C. — Americans want Canada to fix the discrimination U.S. wheat faces when American farmers try to deliver grain to Canadian elevators.
It’s an issue that arose repeatedly in discussions with American politicians, government officials and wheat industry representatives during the North American Agricultural Journalists annual conference.
American farmers want “a grading system that would make it fairer and a balanced approach in terms of our grains,” said U.S. Agriculture Secretary Tom Vilsack, speaking to NAAJ by phone from Vietnam.
“The current grading system has a tendency to undervalue American grain that is being exported to Canada.”
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His views were echoed by the U.S. chief agriculture trade negotiator and other Washington agriculture players.
Presently U.S. wheat can be sold to processors based on specifications, and much is. Grain can be delivered directly to processors, or sold on specs to Canadian elevator points.
However, uncontracted or unarranged farmer deliveries to elevators run into crippling snags that can devastate the value of the grain. U.S. grain delivered into the bulk handling system must be graded as feed, regardless of its qualities, and that includes wheat from the varieties Faller, Prosper, Glen and Elgin, which are approved and grown in Canada.
That’s the focus of American annoyance, because farmers growing the same grain in the U.S. and Canada are treated differently at Canadian elevators. However, the hundreds of Canadian farmers who have hauled to U.S. elevators generally find their grain treated the same as local grain.
“Right now obviously it’s an unfair advantage,” said Erica Peterson, the North Dakota Wheat Commission’s marketing specialist.
U.S. Wheat Associates’ policy director, Dalton Henry, said the problem will likely grow.
“I think you’re going to see more and more varieties that are registered in Canada also being grown in the United States,” said Henry.
Some of this problem would have been eliminated if Bill C-48 had passed last year. That would have updated the Canada Grain Act removing the requirement to label any U.S. wheat as feed. If a variety was registered in Canada, it would grade the same as grain grown in Canada.
When the federal election was called that bill died. Vilsack and U.S. agricultural trade negotiator Darci Vetter said they have raised the issue with Canadian government officials and federal Agriculture Minister Lawrence MacAuley, pointing out it’s something they’d like to see fixed.
“They have said they are looking at ways to address that in regulation,” said Vetter.
Henry said he had just received a letter from MacAuley saying that the government recognizes the need to update the Canada Grain Act and is examining the “work to date” on the issues.
U.S. Wheat Associates also wants Canada to fix another problem it perceives, which is the foreign designation on U.S. grain delivered to the bulk handling system, which they believe effectively segregates U.S. wheat, forcing companies to keep it separate from Canadian-grown grain.
That creates a situation similar to Country of Origin Labelling in meat, which effectively segregated Canadian origin livestock and shut down much trade.
“Yes, they can handle U.S. wheat, but because of these restrictions or requirements, they don’t handle U.S. wheat, even when there’s a price premium on the Canadian side of the border like we saw this past summer,” said Henry.
Nobody is accusing Canada of deliberately blocking access to U.S. wheat. Americans generally accept that the present impediments to elevator delivery are a hangover from the Canadian Wheat Board days and the elimination of its monopolies. Many regulations have been changed, but not all, and there are some unexpected snags.
That’s a viewpoint Cereals Canada’s Cam Dahl presents when talking to U.S. grain players. There have been major changes to variety registration, grain grading and especially marketing powers, so not everything has gotten done at once.
“These are actually enormous changes,” said Dahl about the CWB dismantling and grain management evolution.
“It’s a technical glitch . . . As time goes forward I think this is something that can be addressed.”
With a new government in power, any legislation to fix the situation will have to be introduced, since C-48 died. Vilsack, Vetter and Henry said they have raised the issues with MacAuley so that it is not forgotten in the blizzard of issues that the new government is having to catch up with.
“They have reached out to us very quickly after they came into office,” said Vetter, noting Prime Minister Justin Trudeau’s recent state visit to Washington.
“We have quickly established relationships there with them.”
Peterson said the border issue is not raging with American farmers now, and farmers have generally been more interested in delivering Canadian grain to U.S. elevators rather than the opposite, but that could change.
“Right now it’s not a big deal, but if the price situation changed, where it’s attractive for our producers to sell up there, that’s where the heartburn is,” said Peterson.
“They would not be able to take advantage of that.”
