Pulse fraud alleged

Pulse crops from the United States are being imported into Canada and sold illegally as Canadian peas and lentils, alleges the president of a major U.S. grain company.

Jeff Van Pevenage, president of Columbia Grain, said Canadian brokers, processors and exporters are buying U.S. green peas and green lentils in droves this year.

The statistics back him up.

“If you look at green peas, it really sticks out,” he said.

Canada imported 47,478 tonnes of U.S. peas through July of 2019 compared to 19,664 tonnes for all of 2018. The U.S. grows mainly green peas.

“Since when did Canada need more green peas?” said Van Pevenage.

It is a similar scenario with green lentils. Canada imported 39,582 tonnes of U.S. lentils through July of 2019 compared to 16,762 tonnes for all of 2018.

He said the reason U.S. pulses are flooding across the border is that they are facing higher duties than Canadian product in key markets.

U.S. peas are hit with a 25 percent tariff entering China versus no tariff on Canadian peas.

India has a 55 percent tariff on U.S. lentils compared to 33 percent for product out of Canada.

Chinese buyers who like certain varieties of U.S. peas for the snack food market have told Van Pevenage to ship their peas through Vancouver and call it Canadian product.

Columbia owns nine pulse processing plants, primarily in Montana and North Dakota.

Van Pevenage asked the Canadian Food Inspection Agency if it would be legal to ship U.S. product to Canada, blend it with Canadian pulses and call it Canadian.

He was told shipments containing any amount of U.S. pulses would have to contain a phytosanitary certificate identifying the origin of that product.

The CFIA confirmed that in an email to The Western Producer.

“If the shipment is a blend of both Canadian and foreign origin grain, then both countries of origin should be shown on the application,” said the agency.

“It should be noted that not all countries that import pulses from Canada require phytosanitary certifications from Canada and the CFIA does not issue phytosanitary certificates unless required by the importing country.”

Van Pevenage said he advised the CFIA of the huge volume of U.S. product entering the Canadian market and asked the agency to quantify how many phytosanitary certificates it had issued identifying shipments containing U.S. product.

“They just went stone cold silent on me. They would not respond to me anymore,” said Van Pevenage.

He said he also emailed Canadian Special Crops Association chief executive officer Gord Bacon about the issue and did not receive any response.

A spokesperson for the CSCA said it works with the CFIA to ensure members are aware of exporting requirements but she refused to comment on Van Pevenage’s allegations of fraudulent phytosanitary certificates.

“As an industry association, we do not comment on accusations or allegations made by members of the trade,” said Tracey Shelton.

Van Pevenage alleges that much of the U.S. product that has entered Canada has been re-exported as Canadian product.

“Certainly they’re not eating all these lentils and peas up in Canada,” he said.

He wants the CFIA to “crack down” on the practice because it is having a profound impact on Columbia’s business.

The CFIA responded that it is the responsibility of exporters to accurately identify the origin of grain exports when applying for phytosanitary certificates.

Van Pevenage estimates that 50 percent of the U.S. green peas heading to Canada would have been handled by Columbia if they weren’t being rerouted to avoid additional tariffs. And it is an ongoing problem.

“I had a manager send me an email yesterday who said, I’ve just learned over the last two weeks the Canadians have been down here buying a ton of lentils from us again,” said Van Pevenage.

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