Cereals Canada and the Grain Growers of Canada (GGC) want inspectors from private companies to replace the mandatory inspection currently done by Canadian Grain Commission (CGC) staff on Canadian grain exported by ship.
Their positions are in submissions to Agriculture and Agri-Food Canada AAFC, which is reviewing the Canada Grain Act and the CGC’s role in administering it.
Both groups note that at least 70 per cent of grain exported by ship now is exported by both private inspectors hired by grain companies and CGC inspectors, required by law to assure grain quality and Canada’s reputation.
The groups want the CGC to certify and oversee the private inspectors to ensure continued quality control.
“The mandatory nature of the official CGC inspection and weighing system, combined with this commercial need for third-party services also means that in many cases there is unnecessary duplication of effort and cost,” Cereals Canada says in its submission.
“The direct costs associated with these double inspections, at just 70 per cent, were valued at roughly $34 million in 2018-19.”
Cereals Canada, which represents the cereals value chain from farmers to exporters, says all its members except one supports its submission. Although not named, that member is the Saskatchewan Wheat Development Commission (Sask Wheat). It argues in its submission maintaining mandatory CGC outward inspection is necessary to preserve Canadian grain quality.
That view is shared by the Saskatchewan Barley Development Commission and Agricultural Producers Association of Saskatchewan.
Sask Wheat also says Saskatchewan alone accounts for nearly 40 per cent of Canada’s total crop production, 47 per cent of Canada’s total field crop area, 54 per cent of the value of Canadian grain exports and almost 50 per cent of all licensed primary and process elevator storage capacity.
Since most of the CGC’s revenue comes from fees collected from grain exporters for outward inspection services much of the difference should come from the federal government, especially to cover CGC services deemed a public good.
The Canadian National Millers Association (CNMA) makes the same argument, noting that other government agencies that oversee Canada’s grain sector — Health Canada (HC) and the Canadian Food Inspection Agency — are funded totally by government.
“The commission plays vitally important roles in providing the foundation for consistency of end-use performance of cereal grain varieties that are registered for production in Canada and eligible for milling classes of cereal grains,” the CNMA submission says.
The CNMA also wants the Food and Drug Act harmonized with the grain act to eliminate inconsistencies when dealing with naturally occurring toxins that sometimes show up in grain.
CNMA says it’s not opposed to private inspectors, but since it expects some customers will still want CGC inspections that option should remain.
“This will require that the commission continue to have qualified personnel available for this purpose,” the submission says.
The GGC’s submission supports retaining the CGC’s mandate to work in the interest of farmers.
“GGC is not comfortable with expanding this mandate without a clear understanding of the business case or the resulting role of the commission,” its submission says. “GGC is specifically concerned with scope creep — i.e. non-regulatory functions — and the dilution of producer protections.”
The GGC, which represents a number of provincial grain-farmer organizations, says it is concerned with the CGC’s governance structure
“GGC members strongly support a new, modern governance structure for the commission — one which drives accountability, provides strong leadership and direction to stakeholders and staff, and ensures regional and value chain perspectives,” the GGC’s submission says. “The new structure should also incorporate the producer voice and ensure that perspectives from both Eastern and Western Canada are built into the structure. Beyond this, GGC is not currently in a position to recommend a particular structure but would like to examine the options with government, through the review process.”
Several other organizations have suggested replacing the three government-appointed commissioners that oversee the CGC with a board of directors and CEO.
Others want the current system retained.
Farmers are increasingly frustrated by grading subjectivity between licensed facilities and barriers to their producer rights and want it addressed in the grain act, the GGC submission says.
“These concerns threaten to undermine CGC standard setting and guidance function and, more largely, erode producers’ trust in the grain quality system.”
The GGC supports changes to the current producer payment security program to increase efficiency and to reduce program costs for licensees and producers, as long as producers continue to be protected from the bankruptcy or non-payment of a licensee.
“GGC would like CGC modernization to include discussion about potential alternatives, including a fund-based mode, and the appropriateness of the CGC in providing this role,” its submission says.
The GGC also wants to see more market information gathered.
“More timely insight into exports and vessels lineup would improve transparency and empower producers to make better marketing decisions,” the submission says.
Cereals Canada wants the CGC to review Western Canada’s wheat classes with a view to reducing them. There are 10 now but three — Canada Western Red Spring (68 per cent), Canada Western Amber Durum (23) and Canada Prairie Spring Red (4) make up 95 per cent of exports.
“(T)he remainder was a combination of the other classes, which individually represent two per cent or less by class (i.e. less than 300,000 acres),” Cereals Canada’s submission says.
Much of the other classes of wheat are sold with CPSR as CPSR+.
“Given that classes other than CWRS and CWAD are not exported by class, and there are low acres of the other classes grown, there is an opportunity to streamline the western Canadian wheat classification system,” the submission says.
AAFC consulted with the grain sector from Jan. 12 to April 30, including through a virtual town hall to get views on the grain act and CGC.
Feedback is being assessed now, an AAFC official said in an email May 5. A summary will be published in the coming weeks.
“The next steps following the summary report will be informed by the results of the consultations and are yet to be determined,” the official wrote.