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Editorial: Interests aligned?

Canada’s major grain companies — through their industry voice the Western Grain Elevator Association (WGEA) — have come out swinging against a discussion paper that puts analytical testing on the table (see Allan Dawson’s front-page story).

The Canadian Grain Commission has been reviewing whether falling number and tests for the mycotoxin deoxynivalenol (DON) would serve the grain industry and farmers better than the current visual inspection system. They asked for industry feedback.

Right now fusarium-damaged kernels are used to estimate DON levels, but the correlation between the two is imperfect and it appears to change from year to year. DON is, at high enough levels, toxic to livestock and humans.

The falling number test would measure the suitability of wheat for bread making. Under the current system wheat is inspected, at the time of delivery, for sprouting, which is caused by the enzyme alpha-amylase. The enzyme breaks down starch in the kernel to sugar to provide a ready energy source for the sprouting kernel, but makes for a lousy loaf of bread. The test creates slurry and measures how long it takes a plunger to fall through it, which provides a more precise value.

Many parties have touted this sort of analytical testing as a better route than the more subjective world of visual inspections. It’s the difference between the hard statistics of baseball and the more ethereal world of ‘artistic impression’ seen in figure skating.

Proponents of such a shift paint it as a straightforward choice. Rather than hoping you and your local elevator agent saw eye to eye on the quality of your grain, there would be a simple test. Shades of grey would be removed from the equation and a smoother and fairer-for-all business relationship would emerge, the broad strokes of their claims run.

Left largely unspoken is the natural suspicion that some sellers have that the grades in elevators will subtly favour the companies doing the grading, rather than the farmers selling the grain.

The fact that there are occasional grading disputes is a surprise to no one. One of the grain commission’s primary reasons for being is to be the impartial adjudicator.

In a submission to the CGC, the grain companies painted a different picture. They say the grading changes would be a solution in search of a problem.

They point out that the marketing system is already meeting the specifications of end-users, meaning adding the new grading factors would serve little purpose. They went so far as to describe it as a “zero sum game” in their submission.

They painted a picture where the required testing infrastructure would cost $54 million to build, and an additional $30 million a year to operate. Boiled down to farm gate numbers, that would add up to an additional cost of $1.54 a tonne, or four cents a bushel, WGEA claims.

It might be easy to say the companies just don’t want to incur that expense just to acquire a higher — and some would say onerous — level of accountability.

However, some farm groups are asking questions of their own, including the Keystone Agricultural Producers here in Manitoba.

KAP’s main concerns appear to revolve around whether or not there are unknown and unintended consequences bundled up into a well-intentioned effort to bring clarity and consistency to the grading system.

It is claiming there has been a “lack of analysis” around the concept, and especially wonder how often it would result in a grade change, and ask what the financial impact would be to producers. KAP goes on to describe itself as “… wary of supporting this concept…”

That skepticism is echoed by the Alberta Wheat Commission, which also wonders if the net result might be more downgrading and lower prices to producers.

Tom Steve, AWC’s general manager, noted that the falling number test has been used more widely in that province in recent years, due to wet harvests in central Alberta and the Peace River district. However, he added the tests were being done after wheat has been purchased which means farmers are in the dark as to how — or even if — FN is affecting prices.

“The lack of transparency is a concern to us,” he told the Co-operator.

It’s a good thing to have this discussion as an industry but gaining a fuller understanding of all the possible implications is very important. Analytical ‘black box’-style testing has long been proposed for the Canadian grain industry.

But making these sorts of wholesale changes does represent a fundamental shift that could have a profound disrupting effect.

Best to take the time to understand the implications now.

The outcome to this discussion could affect how your grain is valued. Don’t be left on the sidelines as these important decisions are made.

About the author

Editor

Gord Gilmour is Editor of the Manitoba Co-operator.

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