The creation of the Canadian Grain Commission (CGC) 107 years ago followed decades of farmer complaints that the grain trade cheated them on grades and diluted the quality of their grain when exported.
Much has changed since 1912, but many farmers say the CGC is still needed.
“The reasons why the CGC was invented in the first place we haven’t seen change,” Todd Lewis, president of the Agricultural Producers of Saskatchewan (APAS) said in an interview. “All those issues are still there.”
He said trade issues such as the current one with canola to China underline the importance of the CGC and its ‘Certificate Final’ quality guarantee.
“I don’t think there has ever been a more important time to ensure that the CGC is able to perform outward inspections and have that data and samples available,” Lewis said.
Keystone Agricultural Producers (KAP), president Bill Campbell agrees.
“The grain commission played a huge role when we had the finding of glyphosate-tolerant wheat in Alberta last year,” he said in an interview. “It was the one that had all the samples, documentation and it was able to deal with the customers and guarantee them that type of wheat is not in our system.”
Campbell and Lewis stressed ‘grassroots’ farmers must have a say in Ottawa’s CGC review.
Regulator versus service provider
The objective isn’t to eliminate the CGC, but to make grain inspection cheaper and more efficient, said Wade Sobkowich, executive director of the Western Grain Elevator Association (WGEA).
“We know there are some people calling for the removing of the CGC grading system entirely,” he said in an interview. “We’re not there. The CGC grading system should remain and the CGC has a very important role as regulator in the Canadian grain industry. But it should not be both regulator and service provider.”
Under the grain act, export cargoes by ship must be inspected by the CGC. It issues a ‘Certificate Final’ guaranteeing grade and weight. CGC supporters say that’s critical to protecting Canada’s ‘quality’ brand. The WGEA says exporters should be allowed to use private inspectors instead of the CGC. Canada’s reputation is protected if the CGC certifies private grain inspectors, Sobkowich said.
“There would be no change to the Canada brand because the grain commission would still be responsible for the grades,” he said.
“The CGC would be a regulator, not service provider.”
The CGC, which is required by law to fund itself, earns most of its revenue from outward grain inspection, currently charging $1.32 a tonne. Sobkowich said private inspectors only charge 50 cents a tonne.
Sobkowich said the CGC, which spends around $65 million a year to operate, needs to be funded mainly by government because as a regulator, it’s for the public good.
Requiring the CGC to collect operating money from those it regulates is a conflict of interest, he said.
Some are skeptical about turning Canada’s grain quality control system over to private companies.
“Basically it’s dial a grade — whatever you want it comes out at that,” APAS past president Norm Hall said in an interview.
The Grain Growers of Canada (GGC) agrees with its “industry partners” that inspecting grain exports twice is redundant, and while the association might endorse private inspections, executive director Erin Gowriluk says it wants to consult further with its members before taking a position.
“If third parties can do this more cost effectively than the government can, and they have acknowledged that they can, then perhaps they are the ones that should be delivering that service on the oversight of the commission,” she said.
It costs Canada’s grain industry about $1.42 a tonne (four cents a bushel), to operate the CGC, depending on grain exports.
“As a producer, at a buck 42 a tonne it is a worthwhile investment,” Campbell said.