The Canola Council of Canada, one of the largest agricultural industry associations in the country, is under pressure to adjust its priorities and get costs under control.
Some are even calling for it to merge with other oilseed organizations.
Ag industry leaders have told The Western Producer that oilseed crushers and grain elevator companies have become increasingly frustrated with the council, to the point that a couple of firms have contemplated leaving the organization.
The elevators and crushers, who are members of the council, are unhappy with the amount of levies they pay each year and the return on their investment.
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“It is about members’ sense of value from the canola council,” said president Jim Everson.
Everson confirmed that some members of the CCC are dissatisfied with the status quo and are asking for an overhaul.
“We are, as a council, having a review of our priorities at the council and our funding arrangements.”
The council has members from canola grower associations, grain handlers, processors and food manufacturers, who work together through the council to advance the growth of the canola sector.
Under the council’s funding model, grain companies who are members pay 23 cents per tonne of canola exported. Canola processors also pay 23 cents a tonne on their crush of canola seed.
In 2015, Canada exported 9.2 million tonnes of canola. Assuming 2016 levies were based on 2015 tonnage, elevator company contributions to the council would have been about $2.1 million in 2016.
In 2015-16, processors crushed 8.3 million tonnes of canola, resulting in a levy of around $1.9 million.
Canola growers also pay a levy of 23 cents per tonne to the council. Provincial grower groups, which are members of the council, pay the levy on behalf of farmers.
Based on annual report data for the provincial groups, grower levies to the canola council were $3.55 million in 2016, compared to approximately $4 million from the processors and elevator companies.
Crop science firms also fund the council, but their fees are smaller than the primary funders.
A grain industry representative said crushers and elevators want fewer commodity councils within Canada’s ag sector. It costs companies time and money to send reps to meetings for multiple organizations. More significantly, companies that export and crush canola must pay the council levies on both business activities. Those firms are likely paying hundreds of thousands to the canola council each year.
Some members want the council to merge with other organizations, such as Soy Canada and the Flax Council of Canada, to form a larger and more efficient oilseed council.
So far the canola council board has resisted that suggestion.
Everson said all members of the council are still focused on expanding the industry and reaching a production goal of 26 million tonnes by 2025. However, the organization needs to listen to the concerns.
“There is a changing economic environment out there,” he said.
“A magnifying glass is being applied to all organizations … making sure we’re making efficient use of the dollars that industry and producers provide to us.”
Prairie canola grower organizations acknowledged that commercial players rather than farmers are leading the push to revamp the canola council.
“This current round of changes is being driven from other parts,” said Langham farmer Doyle Wiebe, chair of Sask Canola, who noted that his members are generally happy with the council’s activities, especially its extensive agronomy extension work.
Greg Sears, chair of Alberta Canola, said his board had no problem with a re-examination of the structure and functioning of the council but suggested a merger isn’t something that should be rushed.
“It’s not in itself a bad idea, but there are a lot of complications in making a merger like that work,” said Sears, who farms at Sexsmith.
Allocating funding and resources for different regions and multiple crops could be a challenge.
“There’s quite a bit of hair on this issue,” said Sears.
“It’s not as simple as it might at first appear.”
Commercial interests have been raising concerns about costs and duplication between oilseed organizations for a number of years, and the issue appears to be coming to a head.
So far the discussions around revamping the canola council have been fluid, but concrete proposals may appear before the next crop goes in the ground.
“It’s sooner rather than later,” said Wiebe.
“Some things will likely happen that will be announced this winter some time.”
The Western Producer contacted a couple of grain exporters and canola processors for this story, but they did not provide comments.
