Grains Act amendments get good grade but could be higher

Proposed changes to the Canadian Grain Commission grade well with national farm groups, but they say the results could be even better.

The commission’s operating costs “must be driven down through a more comprehensive streamlining of operations than the current amendments facilitate,” said Gordon Bacon, CEO of Pulse Canada and spokesman for the Canadian Special Crops Association.

Others also expressed support for the changes when appearing before the Commons agriculture committee, albeit with reservations.

The Canadian Federation of Agriculture “continues to have reservations with the changes to the Producer Payment Security Program,” said Humphrey Banack, the farm group’s second vice-president.

Government should ensure all reforms to the commission are completed before it introduces increased user fees next August, added Rick White, general manager of the Canadian Canola Growers Association. As well, licensing issues have to be resolved and the commission needs closer ties and more accountability with growers’ groups, he said.

Omnibus bill

The changes to the commission are contained in the Conservative government’s omnibus budget bill. After protests in Parliament and elsewhere last month, the government referred the commission changes to the House committee for study. The Senate agriculture committee has also held a session with Agriculture Minister Gerry Ritz to review the proposed changes, which are supposed to save farmers and grain companies $20 million annually.

Bacon pointed out that until “things like modernization of the governance structure, and elimination of other costs from the CGC structure are done, a mandate to recover all costs will result in CGC operational costs that must be recovered through higher fees to grain companies, and lower returns to farmers.”

He urged the committee “to look at what additional changes need to be made to the CGC to ensure that it is as cost effective as is possible. It’s crucial to eliminate these costs before any move to full cost recovery by the commission.”

If the government proceeds with making budget cuts greater than $40 million to the commission, there should be a clear outline of what additional costs farmers will face, he added.

The commission plays a valuable role in protecting Canada’s reputation as a supplier of high-quality grain, he said. That has a major benefit to the Canadian economy, not just the farmers, and government should carry some of the cost.

Changes to the program that ensure farmers are paid for grain delivered to buyers who default must not undermine the trust farmers have in the system, said Banack. Moving that feature to an insurance-based program as the legislation proposes has merit, he said. “Additional details are required prior to the CFA fully endorsing the change and the new program,” he said.

“Details on the actual costs to run the program, cost savings to producers, percentage of grain covered, premium calculations, the structure of the insurance or how the program will be operated have not been forthcoming. The concept and the details of the program are first required prior to determining whether the industry will benefit under the new program.”

Key issues remain

The commission needs to work with farm groups and grain buyers to clear up these matters, he added.

White said the legislation didn’t address several key issues.

“Changes to the CGC governance structure are imperative and should be included in the legislation that strives to modernize the commission,” he said.

The commission has to be accountable to both industry and farmers, and third-party inspection of grain before it is shipped to a foreign customer should also be available.

“A final important area that needs to be considered is public versus private good,” White said. “The CGC provides a large number of services that benefit the good of Canada, and these costs should not be included in the proposed increased user fees, which will be paid solely by farmers.

“The grain research laboratory, policy development, the maintenance of grain quality standards and assurance system — to name a few — should continue to be funded by the government as we believe they are there for the public good not just for the benefit of farmers.”

White urged the government to cover one-quarter of the commission’s budget — nearly triple the proposed nine per cent.

The government should also introduce separate legislation in the spring “to complete the CGC’s progress towards modernization.”

“In the end it is farmers who will be paying for the majority of the costs of the CGC so they should have an institution that is lean, modern, efficient, and who advocates for them and understands their business,” said White.

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