The Canadian Grain Commission (CGC) should continue “to operate in the best interests of producers and Canadian grain industry an an independent third party to establish grain grades and standards.”
That’s one of 17 recommendations Keystone Agricultural Producers (KAP) makes in its submission to Agriculture and Agri-Food Canada (AAFC), which is seeking views on changes to the Canada Grain Act and the CGC, which administers it.
Why it matters: For 109 years the Canadian Grain Commission, under authority of the Canada Grain Act, has regulated Western Canada’s multibillion dollar grain industry. Views vary on how to improve the act to best serve farmers and grain companies.
KAP also recommends the CGC continue to provide outward inspection and that the federal government maintain exemptions to allow flexibility, in particular for bulk commodities, to support various commodities moving to markets.
“To maintain Canada’s international reputation for high-quality grain, the CGC must ensure all grain leaving Canada meets buyer specifications,” KAP’s submission says. “KAP supports the role of the CGC as the entity responsible for regulating Canadian grain handling. Producers are concerned that changes to the CGC’s role in outward inspection would limit the quality assurance and verification standards international buyers expect from Canadian products.”
The Saskatchewan Wheat Development Committee (Sask Wheat), Agricultural Producers Association of Saskatchewan (APAS) and National Farmers Union (NFU) have similar positions.
However, the Western Grain Elevators Association (WGEA) wants mandatory CGC outward inspection to end in favour of using inspectors from private companies certified by the CGC to ensure the quality of Canadian grain exports isn’t compromised.
In its submission the WGEA says 70 per cent of the grain its members export via ship is currently inspected by private inspectors, in addition to the CGC. The association, which represents Canada’s biggest grain companies, says inspecting grain twice is an unnecessary cost.
The Alberta Wheat and Barley Commission and Western Canadian Wheat Growers Association agree.
But KAP, Sask Wheat, APAS and the NFU see value in maintaining CGC outward inspection.
“In the 2019-2020 crop year, the CGC issued 20,150 documents, of which 2,465 were certificate finals, 8,146 letters of analysis and 9,499 statements of assurance,” KAP’s submission says. “The volume of requests for CGC certification demonstrates the significant value the CGC provides in assuring international buyers that Canadian grain is of the highest quality.”
KAP notes exemptions within Canada Grain Act regulations allows Canadian grain to be exported by truck without CGC outward inspection, and same for grain exported in containers.
“Recognizing the diversity of crops exported from Manitoba, exemptions or accommodations for unique sector requirements should be provided within any future amendments to legislation and policy,” KAP’s submission says.
KAP. like Sask Wheat, APAS and the NFU, wants the federal government to work with industry and the CGC to report weekly on import and export sales for all agricultural commodities.
KAP also recommends allowing producers to initiate the Subject to Inspectors’ Grade and Dockage process at any time from delivery to cheque settlement. Now it can only be done by the grain owner at the time of delivery. With more grain hauled by commercial truckers, farmers have less access to the option.
KAP recommends the CGC and federal government scrutinize potential producer payment security options, including an insurance-based model and a producer compensation fund.
Under the current program grain companies must post security to cover farmer liabilities.
That costs grain companies, as well as the CGC which administers the program. And sometimes the program fails to fully compensate farmers after buyers go broke before paying for grain.
KAP recommends that the CGC consider options to include feed mills in the Safeguards for Grain Farmers Program.
KAP also recommends the CGC investigate way to speed up falling number tests and to make results more accurate, and rectify the differences between UGMA and 919 moisture testers.
The CGC was created under the grain act in 1912 to work “in the interests of the grain producers, establish and maintain standards of quality for Canadian grain and regulate grain handling in Canada, to ensure a dependable commodity for domestic and export markets.”
The Harper government intended to revise the Grain Act but its legislation was derailed by the election in 2015.
In 2019 the current federal government started over, but the process was waylaid by the COVID-19 pandemic in early 2020.
In January this year AAFC began consulting the grain sector about possible revisions to the Act.
KAP’s 17 recommendations on the Canadian Grain Commission are:
- KAP recommends that the CGC continue to operate in the best interests of producers and the Canadian grain industry and as an independent third party to establish grain grades and standards.
- KAP recommends that the Canada Grain Act be amended to require primary elevators to keep one-kg samples of all grain deliveries until the time of cheque settlement, and to allow producers to initiate the Subject to Inspectors’ Grade and Dockage process at any time from delivery to cheque settlement.
- KAP recommends that the CGC increase sampling oversight and consider random elevator inspections to ensure sampling procedures are adhered to.
- KAP recommends that the CGC consider options to include feed mills in the Safeguards for Grain Farmers Program.
- KAP recommends that the CGC and the Government of Canada initiate a thorough analysis of potential producer payment security options, including an insurance-based model and a producer compensation fund.
- KAP recommends that the CGC review the variability of grain contracts and consider options for standardized delivery contracts to protect the interests of producers.
- KAP recommends that the CGC continue to provide vital information online to producers about licensed grain buyers and consider providing clarity for producers regarding grain sales to new facilities like value-added processors.
- KAP recommends that the CGC identify facilities that may be considered a license subclass and work with industry and affected subclass facilities to determine fair licensing requirements that would accommodate operational needs and provide payment protection for producers.
- KAP recommends that the CGC continue to provide outward inspection and that the Government of Canada maintain exemptions within the Canada Grain Act and Canada Grain Regulations to enable flexibility, in particular for bulk commodities, to support various commodities moving to markets.
- KAP recommends that the CGC investigate methods to standardize and increase testing precision and speed in the determination of a falling number.
- KAP recommends that the CGC investigate options to rectify the differences between UGMA and 919 moisture testers to ensure consistent test results.
- KAP recommends that the CGC mandate, at a minimum, yearly maintenance and calibration of grain company moisture testers by certified technicians.
- KAP recommends that the CGC implement a system of standardization and calibration for protein testers.
- KAP recommends that the CGC work with elevator operators and grain buyers to ensure all platform scales have clear displays to adhere to the transparency required by the Canada Grain Act.
- KAP recommends that the Government of Canada work with industry and the CGC to report weekly on import and export sales for all agricultural commodities.
- KAP recommends that the current system of variety registration remain as a stable, third party, peer reviewed, merit based, resource for CGC grain classification.
- KAP recommends that the CGC inform and educate producers about their rights within the Canada Grain Act and services offered by the CGC.