Two Winnipeg grain industry organizations have joined the list of those pondering collaboration and even a possible merger.
The Canadian International Grains Institute (Cigi) and Cereals Canada say now may be the time to band together.
Cigi was created in 1972 to promote Canadian grain and field crops to domestic and international processors. Besides overseas missions, Cigi runs seminars at its Winnipeg headquarters showing domestic and foreign millers and bakers how to get the most out of Canadian wheat.
Cereals Canada was formed in 2013 to represent Canada’s cereal ‘value chain’ after the demise of the Canadian Wheat Board in 2012.
Both groups already have a close relationship, Cereals Canada’s president Cam Dahl and Cigi’s chief executive officer JoAnne Buth said in interviews last week. Cigi with 10 member organizations and Cereals Canada with 25 share five of the same members and four of the same directors.
- Read more: Cigi, Cereals Canada funding, membership
Dahl and Buth also attend each other’s board meetings.
Cigi provides technical information for Cereals Canada’s market development initiatives, and every fall Cereals Canada, Cigi and the Canadian Grain Commission work together on new crop missions taking information about Canada’s wheat crop directly to millers and bakers around the world.
“Given the collaboration and working together and common members… you would expect the boards to essentially say, ‘Well, are there further areas for collaboration? Could we get more of a strategic focus?’” Buth said.
A task group was set up to discuss just that.
“This is really, really early stuff yet,” Dahl said. “So there are no results to talk about.”
There’s lots to consider though, including any impact of placing Cigi under Cereals Canada management might have on Cigi’s image with customers.
There are probably ways to preserve Cigi’s identity even if it were under Cereals Canada’s auspices, Buth said.
Mixing science and politics
The two organizations both promote Canadian wheat, but Cigi’s work is strictly technical, while Cereals Canada engages in the rough and tumble of agricultural policy and politics, including lobbying the federal government, an important Cigi funder.
Farmers and grain companies have an equal number of directors on Cigi’s board. If Cereals Canada runs Cigi, will farmers continue to have equal say?
Some farmers, especially those who supported the wheat board, contend Cereals Canada is dominated by its six grain and nine life science and/or seed company members and fear under Cereals Canada grain companies would be in the Cigi driver’s seat.
Cereals Canada has eight farm grain grower group members, but the largest, the Saskatchewan Wheat Development Commission, is not.
The pro-deregulation, Western Canadian Wheat Growers Association, is an affiliate member.
While farmers and grain companies share a desire to sell more grain, their interests aren’t always aligned. Farmers want the highest price. Grain companies try to maximize margins by buying low and selling high.
The four directors Cigi and Cereals Canada share are Alberta Wheat Commission representative Kevin Bender, who chairs Cigi’s board, Jean-Marc Ruest of Richardson International who chairs Cereals Canada, Jim Smolik of Cargill Canada and Manitoba farmer Drew Baker of the Manitoba Wheat and Barley Growers Association.
Asked if common directors could result in potential or perceived conflicts of interest, both Dahl and Buth said it’s an advantage.
“If you understand both organizations then you can provide input,” Buth said.
Just starting discussion
Buth said Cigi’s 10-member board would need to approve any changes. “We haven’t established a time frame because we are really early in the stages of having that discussion.”
Farmers’ input on Cigi’s future depends on each commodity group, she said. “Before it goes to the members the board has to make a recommendation to the members. We’re a ways away from doing that.
“Our intent of course is to be transparent, but there’s a time when you can’t be transparent because you’re dealing with privacy issues, you’re dealing with organizational issues that we really do need to have private discussions… there will come a time of course for a much more transparent information that will be shared. We don’t want people to start developing positions on something where they don’t have all the information.”
Mergers to increase efficiency and save money are a common theme these days. Five Manitoba crop commodity groups are investigating that option.
And late last year Richardson International withdrew from the Canola and Flax councils after failing to get agreement to create an oilseeds council.