The Saskatchewan Wheat Development Commission (SaskWheat) is seeking outside advice on how to deal with unrestricted surplus funds worth more than $31 million that have accumulated since the commission was created in 2013.
“The board (of SaskWheat) hears producers’ concerns with the surplus and has discussed this issue,” said Brett Halstead, a wheat producer from Nokomis, Sask., who currently serves as SaskWheat chair.
“The board has directed staff to contract an independent third party to review… the amount of SaskWheat’s levy and the funding requirements going forward,” Halstead added.
SaskWheat currently collects a levy of $1 for each tonne of wheat that’s sold in Saskatchewan.
The money is invested in key strategic areas including research, advocacy, grower relations and market development.
SaskWheat reported an operating surplus of nearly $6.2 million in the 2019-20 crop year, up from $5.8 million the previous year.
The organization had budgeted for an operating deficit of nearly $2.4 million, but higher-than-expected revenues combined with lower-than-expected expenses resulted in a $6.2 million excess.
That money contributed to unrestricted net assets valued at more than $31.8 million as of July 31, up from $25.6 million a year earlier.
During SaskWheat’s annual meeting, Halstead told wheat growers the organization is looking for ways to put excess funds to work.
Last year’s unexpected surplus was the result of lower-than-expected spending on travel and meeting costs related to the COVID-19 pandemic.
The pandemic also delayed some research activities that would otherwise have received SaskWheat funding, Halstead added.
In addition, levies paid by the province’s wheat growers were nearly $4 million higher than expected at $15 million.
Larger than expected plantings and good yields contributed to net levy income (levies minus refunds) of nearly $13.9 million, compared to $10.2 million budgeted.
Halstead acknowledged that SaskWheat’s unrestricted net assets are more than the organization would like to see.
He assured producers that the organization is ramping up its investments in wheat research and is continuing to look for projects and partnerships that align with SaskWheat’s strategic priority areas.
“We do think it (the surplus) is a little high and we’re looking for good investment opportunities to spend that surplus,” Halstead said.
But “your board will not spend money just to reduce the surplus.
“Part of having a third-party review on where our levy should be and what our funding requirements are going forward is so that we can make an informed decision and not just a quick decision ….
“We still want to invest properly in projects that are going to benefit producers ….”
Since its inception, SaskWheat has committed nearly $42.6 million to 161 research projects.
Total research commitments made in 2020 were the commission’s highest ever for a single year at more than $23 million.