Farmers urged to take part in Grain Act review

Many producer groups say the value derived from the Canadian Grain Commission’s outward inspection service does not justify its cost, which is ultimately borne by farmers. | File photo

Some groups envision the grain commission being more focused on its role as a regulator than as a supplier of services

Canadian grain farmers have until the end of the month to make their views known on how Canada’s grain handling, grain grading and grain quality assurance systems should be improved.

Earlier this year, Agriculture Canada launched a public consultation as part of a review of the Canada Grain Act, federal legislation that sets out the objectives and responsibilities of the Canadian Grain Commission.

Submissions to the consultation must be received by April 30.

Jim Wickett, a grain grower from Rosetown, Sask., called the review “a once-in-a lifetime chance” for farmers to reset federal policies that impact farm profitability.

“This has been a really important priority for us,” said Wickett, who also serves as a director with the Western Canadian Wheat Growers Association (WCWGA).

“It’s been 40 years since this was really cracked open, so it’s kind of like a once-in-a-lifetime chance to set policy for the industry….”

Tom Steve, general manager of the Alberta Wheat Commission, agreed.

“From our perspective, we really see this as an opportunity to reinvent the functions and responsibilities of the Canadian Grain Commission,” he said.

“What is it that farmers want the grain commission to do and what are some of the things that they’ve been doing for a long time that are no longer required or could be better delivered by the private sector?”

The WCWGA and AWC both envision a revamped CGC that is more focused on its regulator role rather than a supplier of services that could be provided through the private sector.

“We feel that the CGC should move into primarily an oversight role, with services provided on a competitive basis through third party companies,” Steve said.

The elimination of mandatory CGC outward weighing and inspection services for bulk grain exports is an example.

Outward inspection of export grain cargoes has long been promoted as a way to ensure the quality and reputation of Canadian grain in the global marketplace.

But according to many farm groups, the value derived from CGC’s outward inspection services does not justify the cost of the service — a cost that is ultimately borne by producers.

By some estimates, roughly 80 percent of outbound grain vessels are inspected twice — once under contract by third-party inspection companies and once by CGC personnel.

In the 2020-21 crop year, outward inspection services on bulk grain exports cost the industry about $1.40 for every tonne that was shipped through a regulated export facility.

“When it comes to outward inspections, many customers and exporters are not looking for the CGC to provide that service at all,” Wickett said.

“Grain companies are already hiring (third-party inspectors like) SGS. They’re hiring Intertek. And they’re also hiring people at the other end where the grain is being delivered….”

Wickett said WCWGA members would like to see a leaner CGC that is more focused on protecting farmers.

Programming should be concentrated on the front end of the Canadian supply chain where farmers market their grain.

The WCWGA supports the retention of CGC’s grain services labs, as well as improvements to producer payment protection mechanisms and the modernization of the grain grading system.

According to some critics, Canada’s visual grain grading system no longer conforms with the way Canada’s grain is valued and sold to overseas buyers.

For wheat specifically, non-grading factors such as protein content and falling number are important value considerations for overseas buyers. But these factors aren’t considered in Canada’s visual grain grading system.

“A couple of winters ago, grain companies were using falling number to discount wheat… and the grain commission’s Subject to Inspector’s Grade and Dockage provisions did not apply because falling number is not a grading factor,” Steve said.

“In the coming years, we’re going to see more and more grain that’s being sold on a specification basis and if the only dispute resolution mechanism available to farmers is Subject to Grade and Dockage based on existing grading factors of the CGC, it makes that process much less effective.”

Modernization of grain grading factors and the incorporation of new technologies that more accurately determine the value of Canadian grain are critically important, added Wickett.

Exporters and line companies routinely use technologies to sell bulk grain and ensure that contract specifications are being met.

But at the elevator, where the ownership of Canadian grain changes hands, growers are paid according to an outdated visual inspection system.

“When Canada developed the visual grain grading that’s still the basis of the system we use today, nobody shook hands, patted each other on the back and then hopped in their cars to drive home because the car wasn’t even invented yet. The system is that old,” Wickett said.

“It’s time to bring new technology into this and to apply it to how farmers are being paid for their grain.”

The CGC’s producer payment protection system is another area of potential reform, Wickett said.

Some grain industry groups say the current system provides inadequate protection for farmers who deliver grain to a licensed facility but never receive payment.

“I think there really needs to be some investigation there to determine if we’re really getting the proper bang for our buck,” Wickett said.

“I think a really deep dive into that entire (producer payment protection) system needs to be done…. Industry hates it. And in the past, many farmers that have gone through it were lucky to get 60 or 80 cents on (each dollar they were owed).”

WCWGA would also like to see changes to the CGC governance structure and the way that CGC commissioners are selected.

Steve said the AWC has consulted with a number of other farm groups and is now putting the finishing touches on its submission.

In general, the commission will be advocating for changes that provide a greater level of protection for primary producers.

“What we would prefer to see is the CGC… ensuring that farmers are well protected in the country, when they’re delivering grain,” he said.

“We think there’s a significant role for the CGC to play in ensuring that farmers are protected — that they have the ability to access samples of delivered grain and have access to a legitimate and modernized dispute resolution system.”

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