The Canola Council of Canada has slashed its budget by 40 per cent for the upcoming year.
The organization is revamping its priorities to be more effective and efficient in growing Canadian canola markets and production.
The changes, which include a shift in canola promotion, the council’s role in agronomy and funding, received unanimous support from the council’s board of directors. But is it enough to get Richardson International to rejoin?
That company stunned the industry a year ago by dropping out of the canola council, citing concerns about high membership fees, unneeded market promotion and a duplication of agronomy services.
As of last week Richardson hadn’t reviewed the council’s new priorities, but is willing to, company senior vice-president of corporate affairs and general counsel Jean-Marc Ruest said in an interview Dec. 7.
“If they (council) feel they have addressed those concerns and have a proposal they would like to make to us, we’ll listen… ”.
The canola council would welcome Richardson’s return.
“As a value chain organization our goal is to include as many of the real participants in our industry as possible,” council president Jim Everson said in an interview Dec. 5. “It is valuable to have them (Richardson) as funders and supporters of the council. But our responsibility as the canola council is to the whole value chain… and not just any one part of the value chain.”
Why it matters: Canola generates more revenue for western Canadian farmers than any other crop. The canola council is credited with contributing to canola’s success and is charged with keeping the success going.
Market access and boosting canola production remain top priorities, says the canola council.
The council will shift consumer-oriented canola promotion from established markets in the United States, Mexico and to Japan, to emerging markets in places such as South Korea, Vietnam and Thailand, in co-operation with the Canadian Canola Growers Association, Everson said.
The council will reduce duplication between its agronomists and those with private companies through the council’s new Sustainable Supply Committee.
The council is also integrating staff with Canadian Oilseed Processors Association, which represents Canada’s canola crushers, and providing administration for the Flax Council of Canada, Everson said.
The council and the Canada Grains Council are holding a joint conference in Montreal in March.
“I think that’s a more efficient use of our members’ time and availability,” he said.
The council also has a new funding model. In the past canola farmers, exporters and crusher paid a per-tonne levy. As canola production, exports and crushing increased, so did the council’s budget.
Now the council is setting its priorities and then the budget, which in 2019 will be reduced to $5.2 million, a cut of $3.5 million from the $8.7 million spent in 2018.
“The focus is on what job has to be done and what do we do to adequately fund that job,” Everson said.
Future budgets may vary slightly, Everson said, but not by a lot “so each of the members of the council will have a more predictable, uniform, levy forecast.”
Farmers will cover 50 per cent of the council’s core spending, as they have in the past, through a checkoff on the sale of canola collected by their provincial canola association.
The other half will come from canola exporters, crushers and life science companies, Everson said.
“Each will have a formula on how they share that investment between them,” he said.
“There will be tweaking here and there but this is a new alignment and we’re really confident this is what we need for the foreseeable future. We’ve got a realigned set of priorities and unanimity on the board about pursuing it and a very strong value chain on our board.
“We’re really confident we’ve got it right here and we’re going to move ahead.”
The council will continue in canola agronomy, but to reduce duplication will work more closely with private agronomists, many of whom work for companies that belong to the council, Everson said.
“We think it’s important to have people in Western Canada in touch with what’s going on, on the land, but we are going to be doing less of the outreach and direct communications work,” he said. “It’s just a matter of the resources we have to do it. What I’ve been saying is we are not likely to be walking fields with three or four producers if we can pull together a group of a large number of growers and commercial agronomy people also. Then it makes sense because you are transferring information to a larger group of people.”
Everson said there has already been some reduction in jobs the last 12 to 18 months through attrition.
“I think what we will do in the future is make sure that we are resourcing the association to meet those priorities,” he said.
Market access is at the top of the list, given 90 per cent of Canada’s canola production is exported, Everson said.
China has been pushing Canada to cut canola dockage, ostensibly to reduce the risk of blackleg disease from Canadian canola.
American tariffs recently slapped on Canadian steel and aluminium imports illustrate how vulnerable exports of any product are, Everson said.
Increasing Canadian canola production also tops the list because it’s needed to meet demand.
“Our board feels that’s a very important responsibility — something that’s equally helpful to the producer and the processor and the grain company,” Everson said. “Those companies are really investing in growth and to do that they really need a crop that’s healthy, maintained and growing.”
That’s part of the council’s agronomy mandate. But council agronomists are invaluable when responding to phytosanitary issues.
“We draw very heavily on our crop production team and its credibility to help us with these regulatory issues that come up where we need credible, science-based, objective analysis,” Everson said. “Somewhere around 15 to 20 per cent of the work our crop production team does is not aimed at outreach to producers, it’s aimed at our market access and regulatory agenda.”