Wheat groups grapple with cross border sales issue

Under current rules, American bulk wheat imports are not eligible for top milling grade prices even if the variety is registered in Canada

Two prairie wheat organizations are offering up different views on how the Canadian grain handling system should treat American-grown grain delivered to western Canadian elevators.

The Saskatchewan Wheat Development Commission (Sask Wheat) has urged Ottawa to launch public consultations before making any changes to the Canadian grain grading system or offering any concessions to American-grown wheat sold in Canada.

Sask Wheat’s position runs counter to earlier statements issued by the Western Canadian Wheat Growers Association, which has called on Ottawa to harmonize regulations to “ensure the free flow of wheat between Canada and the United States.”

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“Before any changes are made to our grading system, we need to have public consultations to figure out the consequences of adding more American grain to our system,” Sask Wheat chair Bill Gehl said in a June 5 news release.

“I think producers need to know what the ramifications to our shipping agreements would be and how American grain will fit under the MRE (maximum revenue entitlement, or revenue cap).”

Under current regulations, un-contracted wheat that is grown in the United States, trucked across the border and sold into Canada’s bulk handling system does not qualify for the same grades and prices that are offered to Canadian-grown wheat of the same variety.

U.S. growers can enter into production contracts with Canadian grain handlers that allows them to qualify for top Canadian milling grades and prices but only if the wheat being purchased is either segregated from other varieties or the production contract involves a wheat variety that is already registered in Canada.

Earlier this year, the WCWGA issued a statement suggesting that Canada’s existing regulations represent a trade irritant that should be addressed in hopes of avoiding retaliatory actions by the U.S.

In an April 28 news release, the WCWGA said it has been working with U.S. wheat groups “to urge the House of Commons to address open, cross-border wheat trade.”

The WCWGA and American wheat grower organizations have “long supported an open market and equalization of trade, which includes greater alignment and a more standardized environment for North American wheat,” the association said.

“The issue of the cross-border wheat trade is not new, there are options to remedy the irritant, and we call on the Government of Canada to move on this key issue and ensure the free flow of wheat between Canada and the U.S.”

Sask Wheat said modernizing Canadian legislation (such as amending the Canada Grains Act) could allow for improved trade relations. However, consultations should be conducted to ensure the integrity of the Canadian grain grading and classification system is maintained.

“The foundation of the system must remain in place so that end users of Canadian wheat continue to receive the high-quality grain they have come to expect,” Sask Wheat said.

“Before we make any legislative changes, we should know how this will impact Canadian producers and our relationship with our top export markets,” added Gehl.

Robin Speer, executive director of the WCWGA, said his organization has been working for some time with wheat groups south of the border in hopes of removing potential trade barriers.

“This issue is very much on the radar of the United States Department of Agriculture and the U.S. government,” said Speers. “We’re sending millions of tonnes of grain and oilseeds south, so if anything ever happened to that border, there would be huge problems for western (Canadian) farmers.”

Wade Sobkowich, executive director of the Western Canadian Grain Elevators Association, said his organization supported legislative amendments that were contained in Bill C-48, a federal bill that was drafted and debated but never passed into law.

That bill, introduced by the former Conservative government, would have allowed U.S. producers without a contract to grow varieties of wheat that are registered in Canada and sell their grain as eligible for the top milling grades to a Canadian grain handling company.

“We agree with that and we would support that revision,” said Sobkowich.

“We think that as long as the varieties being grown are registered in Canada … that they (should be allowed) to be grown on American soil and should be eligible for delivery for the top Canadian grade into the Canadian handling system.

However, Sobkowich agreed that any additional changes — beyond those proposed in Bill C-48 — should trigger a review.

“For example, if there’s a notion that non-registered varieties grown in the United States should somehow be eligible for top grades in Canada, we think there should be a proper review done to analyze the possible … (repercussions).”