Hermanson is the recently appointed chief commissioner of the Canadian Grain Commission.
It is truly a great honour for me to serve Canada’s grain producers as the chief commissioner of the Canadian Grain Commission.
My recent appointment as head of the organization comes at an exciting time in the grain sector, and more notably a time of change and modernization for the CGC.
As many of you have heard, the minister of agriculture and agri-food, the Honourable Gerry Ritz, introduced Bill C-39, an act to amend the Canada Grain Act to the House of Commons in December.
Read Also
Agriculture needs to prepare for government spending cuts
As government makes necessary cuts to spending, what can be reduced or restructured in the budgets for agriculture?
The Canada Grain Act is the legislation that enables the CGC to regulate the Canadian grain industry, preserve the integrity of Canada’s grain quality assurance system and ensure that farmers are protected and treated fairly.
Bill C-39 will modernize the CGC to make it reflect the changing needs of the grain sector. Most importantly, Bill C-39 reaffirms the CGC’s commitment to Canada’s grain quality assurance system.
The last major update to the Canada Grain Act occurred in the early 1970s. To put this in perspective, canola was not even a major crop at that time.
While change is not always easy, at times it’s necessary. Most grain sector stakeholders, including producers, have been requesting updates to the act for many years, and clearly the time has come to proceed with change.
The CGC must keep pace with the ongoing transformation of the Canadian grain sector. While historically Canadian grain has been exported as a commodity, it is now increasingly marketed to niche markets and domestic value-added enterprises such as livestock and biofuel processing.
In this new innovative environment, changes to the Canada Grain Act will provide producers with more opportunities and a more cost-effective grain quality assurance system.
Bill C-39 reflects the needs and the will of grain producers and the industry at large. It is built upon the recommendations of the House of Commons Standing Committee on Agriculture and Agri-Food and COMPAS Inc., which heard grain industry stakeholders and recognized a need for changes to the Canada Grain Act and the CGC.
Throughout these reviews, extensive consultations were held including eight public meetings across this country.
A clarification in the mandate of the CGC is being proposed in Bill C-39. This change will clarify that the CGC acts in the interest of grain producers in specific areas: delivery access to elevators and grain dealers, access to binding grain grading and allocation of producer cars.
In other areas, the CGC will operate for the benefit of all Canadians, including farmers.
Bill C-39 reflects the extensive changes within the Canadian grain industry. Over time, the western Canadian landscape has been transformed as the number of primary elevators has significantly decreased.
Because of grain company consolidations, much of our grain is now shipped from primary elevators to terminal or transfer elevators owned by the same company.
Currently, the CGC must inspect and weigh all grain received at terminal and transfer elevators. While these services have value, making them mandatory on every shipment imposes unnecessary costs on farmers.
That’s why Bill C-39 proposes to remove the mandatory requirements for inward inspection and weighing of grain shipments. Bill C-39 will require terminal elevators to allow for third-party inspections when requested by shippers.
The CGC will remain available to arbitrate grade disputes between shippers and terminals, should disagreements arise. This will ensure all stakeholders are given greater flexibility while still preserving their protection offered by the Canada Grain Act.
Bill C-39 also proposes to eliminate the CGC producer payment security program. The current system imposes significant hidden costs on farmers and cannot provide them with 100 percent payment guarantees. This change will present opportunities for farm groups and the industry to develop their own security programs that are more cost-effective and provide more consistent coverage.
It is encouraging to see that farmers and producer groups have already begun a debate on the development of alternative risk-management systems.
In addition, several other amendments are proposed in Bill C-39 to modernize the Canada Grain Act.
These changes will improve clarity, application and enforcement of current provisions. They are intended to reflect current industry practices while continuing to recognize the CGC’s important role in grain quality and quantity assurance and producer protection.
The CGC must be modernized to reflect the evolving Canadian grain sector. Despite these changes, the integrity of the grain handling system and the reliability of Canadian grain exports will be maintained.
Let there be no doubt, Bill C-39 will provide producers with a more cost-effective grain quality assurance system.
As chief commissioner of the CGC, I strongly support this legislation and reiterate this organization’s commitment to providing producers with value.
