The Canadian Grain Commission (CGC) wants to consult with the grain industry about licensing feed mills and producer car loading facilities.
“Once again it’s all about producer protection,” CGC commissioner Murdoch MacKay said in an interview on the sidelines of the Winter Cereals Manitoba annual meeting here March 16. “Our responsibility is to make sure everybody is treated equally and there is producer protection.”
Last year then agriculture minister Gerry Ritz asked the CGC to license feed mills, currently exempt from the Canada Grain Act. CGC licensing would require feed mills to post security to cover what’s owed to farmers when they deliver grain.
The Keystone Agricultural Producers (KAP) lobbied hard for the change after Puratone failed in 2012 owing creditors $100 million, including hundreds of thousands to farmers for unpaid grain.
The CGC consulted with the industry a year ago and a majority supported licensing, MacKay said. While some feed mills oppose the idea others support it because believing farmer security would increase business, he added.
“Now we have to talk about who do you license and who you don’t license,” he said.
Mills that process only their own grain or very small “mom and pop” operations might be exempt.
The CGC proposed licensing producer car loading facilities in 2001 but dropped it after encountering strong opposition from farmers.
MacKay said the dynamics of producer cars have changed. “I would say there are some loading not just producer cars, but dealer cars. They also have the ability to weigh grain. I would say the majority since 2013-14 — the year of the cold weather — is going to the U.S. We’re also hearing producers are getting paid basis the weight and the grade at the producer car loading facility.”
Farmers have a right to load and ship their own grain in producer cars — cars farmers order through the CGC allowing them to bypass grain elevators and the fees they charge. By definition, a producer car is supposed to contain only the one farmer’s grain. While some producer cars are still loaded with an auger and truck, increasingly there are track-side facilities farmers can use for a fee to make loading more efficient. Most include temporary storage.
Traditionally, producer cars have been weighed and graded at unload and that’s also when farmers are paid.
If a farmer gets paid when he or she delivers to a facility under the Canada Grain Act, it should be licensed as a primary elevator, requiring the operator to post security to cover what’s owed to farmers.
“If you’re… getting paid basis what is loaded in the car initially we want to make sure they have the proper weighing system in place,” MaKay said. “That’s all about producer protection.
“We also want to make sure if a producer is getting grade there and he doesn’t like it he can use subject to (grain inspector’s grade and dockage) to get his grade assessed by the CGC.”
So, will true producer loaders remain unlicensed?
“We’ll wait to see what the industry has to say,” MacKay said. “Everybody will have a different opinion on it. We have no preconceived notion… ”
In 2001, producer car shippers said there was no need for a licence so long as farmers were not getting paid at the facility and farmers’ grain was not commingled.
Back then the Western Grain Elevator Association (WGEA), said producer car facilities should be licensed or all licensed primary elevators be allowed to load producer cars.
Last week WGEA executive director Wade Sobkowich said producer car loaders that operate like elevators should be licensed as elevators
“I think that would be our high-level view, but like anything else the devil is in the details so we’d have to look at the consultation document and consider it,” he said.