Checkoff system needs to be credible

It is laudable that the federal government has moved to set up an interim checkoff to support research, market development and technical assistance for the grain sector.

The Western Grain Research Foundation (WGRF), the Canadian International Grains Institute (Cigi) and the Canadian Malting Barley Technical Centre (CMBTC) are major assets to the western grain industry and should be supported by farmers, as well as by other players in the value chain.

But the manner in which this proposition has been presented to producers raises some troubling questions.

The interim checkoff is designed to replace the role previously played by the Canadian Wheat Board, which will lose its single desk as of Aug. 1 and thus its capacity to serve as a checkoff collector, as well as an investor in these organizations on behalf of all farmers.

We are told a voluntary interim checkoff will be in place by Aug. 1, which will be automatically collected from cash grain sales to licensed elevators and turned over for the Alberta Barley Commission to administer. That system will be in place for up to five years, after which it will be up to industry to have a plan in place to support the work of these organizations.

While it’s a bit of an enigma as to why the federal minister chose the Alberta Barley Commission as administrator, we have no reason to doubt the commission’s sincerity in wanting to ensure an orderly transition to a new mechanism for funding the important work done by the three organizations left in checkoff limbo.

Someone has to do it. And it was the minister’s discretion as to who that would be.

But it must be noted the ABC will receive an administration fee of up to five per cent of the checkoff. That’s a sizable admin fee — somewhere in the order of $800,000 to $1 million based on average deliveries of wheat, durum and barley. And while it will be responsible for issuing refunds to growers who request it, it won’t actually be collecting the levy. Its own levy is collected by the Saskatchewan-based Levy Central, an organization that collects checkoff levies for a host of other commodity organizations.

Then there’s this surprising statement in the preamble to the proposed regulation in the Canada Gazette, which states: “The ABC would have the authority to determine which organizations would receive the checkoff funds, and how much they would receive.”

That implies that if the Alberta Barley Commission deemed there was another cause more worthy than the WGRF, Cigi or CMBTC, it could channel those checkoff funds elsewhere. Some farm groups, including Manitoba’s Keystone Agricultural Producers, aren’t happy with the idea of the ABC playing God with farmers’ money.

Commission general manager Lisa Skierka assures us that won’t be the case. She points out that is only stated in the preamble to the regulation and it is the regulation the commission will be following.

Unfortunately, the regulation doesn’t offer much clarity. It only stipulates that the funds are to be used for research, market development and technical assistance. It doesn’t spell out which organizations are to be recipients.

The Co-operator asked the minister’s office for clarification and six days later received an emailed statement from an AAFC communications specialist that confirms the above.

But he added: “ABC and AAFC intend to enter into an agreement that will specify what dollars-per-tonne amounts that ABC will provide to Cigi, CMBTC and WGRF.”

Nowhere is that stated in the preamble or the regulation.

Another area of concern is that the regulation stipulates the ABC will file annual reports to the agriculture minister. Reports to a minister are not required to be made public. Reports to Parliament are.

However, the preamble states: “The intent is that AAFC and/or ABC would release information to the public that would show how the checkoff funds are invested and used. These public statements would inform producers about how and where their checkoff money was spent.”

Ah, but we’re told the preamble on the ABC’s authority doesn’t reflect the government’s intent. Are we to believe the preamble on this question?

The three organizations at risk are worthy causes and innocent victims of the government’s open-market agenda. If their capacity to operate is compromised because farmers don’t trust the checkoff parameters, all of Western Canada suffers.

But if the checkoff is intended to support the efforts of these organizations, it should be clearly spelled out in the regulation. Likewise for the annual reports. They should go to Parliament, not the minister.

Farmers have until June 25 to express their concerns about this proposal to AAFC. We hope they do.

About the author

Vice-President of Content

Laura Rance

Laura Rance is vice-president of content for Glacier FarmMedia. She can be reached at [email protected]

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