Canada’s wheat-grading system might be costing more than the benefit it returns, says Richardson International’s vice-president of corporate affairs and general counsel, Jean-Marc Ruest.
To ensure the quality of Canadian milling wheat-variety registration and wheat classes are regulated. There are many grades within each class, plus differentials for protein content.
“People aren’t sure if the benefits outweigh the costs of that system and that’s part of the discussion that’s currently taking place,” Ruest said during an interview March 21.
In some cases grain companies will offer end-users a narrower band of specifications, while at other times offer a wider band, added Richard International’s president Curt Vossen.
“I think we’ll have to accommodate both.”
The grading and registration system and Canadian Grain Commission, which oversees wheat quality, were primarily designed to meet the wheat board’s needs, according to Ruest.
“Now that they’ll be restructured we’ll be looking at a more commercial system… and at the end of the day it will be figuring out what the end-use customer wants…
“It’s under debate whether the existing variety registration and grading requirements meet all of those needs.”
Meanwhile, Richardson continues to negotiate an agreement to handle grain on behalf of the wheat board. Ruest said Richardson wants to handle more grain, including the board’s.
Richardson also supports the federal government’s decision to assist the board operate in an open market, but the aid should be short term and at commercial interest rates.
Ottawa is guaranteeing the board’s borrowings and initial payments for a maximum of five years.
“We thought five years was long,” Ruest said. “We thought three years or less would be sufficient to put themselves in a position to make that transition.
“We would say whatever the prevailing rate that companies like ours has to pay they should pay as well. I think the rate they got is better than that.”