Farmers shouldn’t bear all new inspection costs

It was no surprise when farmers learned recently that they would pay more in Canadian Grain Commission user fees.

The talks and meetings have been going on for years. Still, it came as a shock to the system for many farmers when they learned how much fees would rise.

Bill-45, which takes effect Aug. 1, is designed to change the fee structure at the CGC and eliminate the need for the federal government to make up the commission’s yearly funding shortfall.

The bill eliminates inward inspections in most cases, while raising outward inspection fees and shifting commission funding to 90 percent industry paid, and 10 percent paid by the federal government.

The added costs push the industry funded portion to an estimated $54 million per year, up from $38 million this year.

And should farmers have any doubts that they will be picking up the tab for the added costs, Wade Sobkowich of the Western Grain Elevator Association recently said: “When it comes to fixed costs, things that (grain companies) can’t control and things that are the same for each one of them as competitors, those tend to get passed through to farmers.”

Ottawa has been saying for years that these changes were in the works, and few in the grain industry would deny that changes were needed.

Eliminating costly and unnecessary inward inspections are one example of a positive change. Because terminals inspect the grain when it is unloaded from farmers’ vehicles, it is an unnecessary cost to repeatedly inspect the same grain as it moves between terminals within the country.

However, the new fees for outward inspections, those required for all grain shipped outside of the United States and Canada, need to be revisited.

When the new service fee structure comes into play Aug. 1, the charge for those inspections will rise to $1.60 per tonne from 51 cents per tonne, according to the WGEA.

The elevator association points out that third party inspection services do the same work for 40 cents per tonne, which is similar to what U.S. exporters pay to have their grain inspected.

The increase under the CGC fees could create a disadvantage if Canadian product becomes overpriced relative to its top competitors in the marketplace.

Offering foreign buyers the choice of CGC services or accepting third party certifications seems a logical and fair solution.

If the CGC can offer more and better quality services than private certifiers, then they should remain an option for those who prefer to go that route.

As well, it is unacceptable to suggest that farmers be the sole party responsible for picking up additional costs. Grain handlers, too, must assume a share.

There is also reasonable grounds to continue with some level of taxpayer support for the grain commission be-cause some of its work serves a general public good, especially the research laboratory, which involves work that protects Canada’s reputation for quality and safe grain.

A follow-up bill, now being pushed by the Canadian Canola Growers Association and other organizations, is intended to find more ways to lower grain handling system costs, among other things.

That initiative must be given proper priority and emphasis in government circles so that new efficiencies can be found and farmers can be assured they are not left shouldering more than their fair share of the costs.

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