Canadian Grain Commission valuable, but room for improvement

Patti Miller says the CGC adds value, but can always improve and that’s why a review is warranted

The Canadian Grain Commission (CGC) adds value to Canada’s grain industry, but it can always do better, says its recently retired chief commissioner Patti Miller.

“I wouldn’t have taken the job if I didn’t think there was value in the organization,” Miller said in an interview June 23.

Miller, whose career in agriculture spans 35 years, including the last 3-1/2 as chief commissioner, retired June 25.

“I think if anything I have an even better appreciation for what’s possible and what that organization can do and does do,” she added. “Even talking to groups that want to see really big, significant change they do also agree in the fundamental need for an organization like the grain commission.

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“But I also think we need always to be open to looking at better ways of doing things. That’s the conversation we’ve been having with the (CGC) team over the last three years.”

In March 2019 Agriculture and Agri-Food Canada first quietly announced a review of the Canada Grain Act and the CGC, which administers the legislation, but it’s on hold in the wake of the COVID-19 pandemic.

Why it matters: It’s expected the federal government will resume its grain act and Canadian Grain Commission review eventually. Both are important to ensuring Canadian grain quality and how Canada’s grain industry is regulated.

The Western Grain Elevator Association (WGEA), which represents Canada’s major grain companies, says it wants the option to use private inspection companies, accredited and overseen by the CGC, instead of being required to have the CGC inspect all bulk Canadian grain being exported by ship.

The National Farmers Union (NFU) fears grain companies want to weaken the grain act and the CGC to gain power in the marketplace, putting farmers at a disadvantage.

The CGC was created in 1912 after years of farmer complaints alleging ill treatment by grain companies and the railways.

The grain act states in part the CGC is there to “… 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.”

Miller said it would be inappropriate for her to express an opinion on what changes should be made to the act.

“But what I can say is there are some big, chunky areas that need review, that absolutely need review, and for sure having a different model for outward inspection and weighing and certificates strikes at the heart of what the CGC does, but I don’t think that you should be afraid of looking at it,” she said. “And when you’ve got a good part of the sector who wants to discuss it, it doesn’t help to say ‘we’re not going to change and we’re not going to look at it.’ But there are some pretty challenging issues in there…”

Not least of which is CGC funding.

Although the CGC is required to be self-funding in 1991 the Mulroney government froze CGC fees to give farmers a break during tough economic times. That resulted in a growing revenue shortfall, which successive governments had to make up. By 2010 CGC fees only covered about half its operating costs.

Higher CGC fees aimed at making the CGC self-funding again were approved by the Harper cabinet and took effect Aug. 1, 2013, as did cuts to CGC services made by amending the Canada Grain Act through the Jobs and Growth Act, an omnibus federal budget bill passed in December 2012.

WGEA executive director Wade Sobkowich says many customers buying Canadian grain prefer private grain inspectors. Paying twice adds unnecessary cost, he says.

“… fundamentally,
there is a role for the organization. I
don’t think anybody argues with that, it’s just how it gets delivered.” – Patti Miller.
photo: Laura Rance

In addition to funding, there are many issues to consider if the CGC’s role changes to accrediting private grain inspectors, Miller said. How does the CGC maintain its expertise in grain grading if it stops grading? What about the customers who prefer CGC grading? How would the CGC monitor and audit private inspectors?

To fulfil its statutory mandate to maintain quality standards for Canadian grain the CGC has grain standards committees representing farmers and companies.

“You need to have a standard on which the market can trade so producers know what they are delivering and what they are getting paid for, so customers know what the standards are,” Miller said. “I think the kind of research and testing and assessment that the grain commission does is invaluable…”

Farming is much different now than in 1912, Miller said.

“So that’s not to say there doesn’t need to be someone in there to set standards, but how those standards are maintained, how that order is maintained, how the integrity of the system is monitored, is something worthy of looking at because the market has changed and producers have changed,” she added. “So fundamentally, there is a role for the organization. I don’t think anybody argues with that, it’s just how it gets delivered.”

The CGC’s grain company licensing program tries to ensure farmers get paid for the grain they deliver. That means companies must post security to cover their liabilities, tying up funds, Miller said. There might be a cheaper way to provide that protection, she said.

Miller noted there are gaps in the CGC’s oversight. For example, the CGC doesn’t do outward inspection on grain exported in containers or grain exported directly to the United States by rail or truck.

“You might ask yourself ‘has the sky fallen?’

“You talk about the (CGC’s) Certificate Final and the importance of that. We do outward inspections, but many times it’s the third-party documentation that accompanies a vessel…” she said.

Change isn’t easy and shouldn’t be done just for its own sake, Miller said. But sometimes changes are needed because conditions change, she said. For example, farmers who disagree with the grain grade assigned at an elevator can ask the CGC to grade it. It’s referred to as ‘subject to inspector’s grade and dockage,’ but it must be requested by the farmer at the time the grain is delivered.

“How many farmers actually deliver their own grain now? So is there a better way to manage that flow? I think even the people who, as you described it, believe in the CGC from a nostalgic perspective, that nostalgia has a reason — the organization has provided value,” she said. “But even from their (farmers’) perspective, given changes in their own business models, are there things that they see that could be done better (by the CGC)?”

Miller is disappointed she won’t be with the CGC when the grain act review is finished.

“But there have been a lot of other good things done and I think the organization is in really good shape,” she said.

About the author

Reporter

Allan Dawson

Allan Dawson is a reporter with the Manitoba Co-operator based near Miami, Man. Covering agriculture since 1980, Dawson has spent most of his career with the Co-operator except for several years with Farmers’ Independent Weekly and before that a Morden-Winkler area radio station.

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