American complaints that Canadian regulations unfairly block American wheat from entering Canadian elevators are justified, says Mike Gifford, Canada’s former chief agricultural trade negotiator.
“This is a classic issue of where the optics are awful,” Gifford told the 22nd annual Fields on Wheels conference in Winnipeg Dec. 15.
“It seems to me it is an equity problem and it is an understandable problem that has got to be resolved.”
American farmers can sell wheat to western Canadian elevators, but they can’t get an official Canadian Grain Commission (CGC) grade, even if the wheat is registered to grow in Canada.
That means American wheat must receive the lowest grade for the intended class, which for Canada Western Red Spring is feed.
It’s a trade irritant that St. Francois Xavier farmer and Western Canadian Wheat Growers Association director Gunter Jochum fears could lead to the U.S. blocking Canadian wheat imports.
Canada exports around four million tonnes of wheat to the U.S., making it one of Canada’s most important markets.
The U.S. only exports about 50,000 tonnes of wheat north, Jochum told the meeting.
Access to the U.S. market is a valuable safety valve, Jochum said.
Changes to the Canada Grain Act that would have allowed American wheat to be graded, died in Parliament a few years ago.
The CGC, which administers the act, says there are no regulations preventing American wheat from being sold to Canadian elevators. Canadian buyers and American sellers can agree on price-based quality specifications, CGC spokesman Remi Gosselin has said in previous interviews.
Colin Watters, executive vice-president of the Montana Wheat and Barley Commission, agrees. However, he told the conference since Canadian exporters are required to declare shipments that contain foreign grain, Canadian elevators won’t buy American wheat because of added segregation costs and the risk of downgrading Canadian shipments accidentally mixed with American wheat.
Watters said he’d be satisfied if American wheat, registered in Canada, could get a CGC grade. But he added some American farmers see Western Canada’s wheat variety registration system as a non-tariff trade barrier.
The system requires new wheats intended for milling to meet specific end-use quality, agronomic and disease standards for the intended class.
However, presumably the system is not a barrier because it applies equally to Canadian farmers. If a Canadian farmer delivers an unregistered wheat it’s only eligible for the lowest grade.
“It seems to me that with goodwill on both sides you could probably come up with a system that accommodates that, but it requires impetus,” Gifford later told reporters.