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MacAulay clarifies USMCA, wheat grading, dairy compensation

The minister also briefed reporters on his EU trade mission last week

American wheat entering a Canadian elevator will be graded like Canadian wheat under terms of the new United States-Mexico-Canada Agreement (USMCA), says Canadian Agriculture Minister Lawrence MacAulay.

That means to be eligible for a Canadian Grain Commission (CGC) grade, wheat, whether grown in the U.S. or Canada, must be from a variety registered in Canada.

If the variety is unregistered the wheat automatically receives the lowest grade in the class it’s intended for, MacAulay confirmed during a telephone news conference Oct. 11 after wrapping up a trade mission to Spain, Belgium and Italy.

Currently under the Canada Grain Act all American wheat entering a Canadian elevator, including registered varieties, are ineligible for a CGC grade — something that has irked American wheat farmers for years.

Although many Canadian grain groups support the change, most have said it’s mostly symbolic because Canadian wheat buyers can pay the seller what U.S. wheat is worth based on its specifications.

A United States Trade Representative’s (USTR) office fact sheet says Canada “agreed to grade imports of United States wheat in a manner no less favourable than it accords Canadian wheat, and to not require a country-of-origin statement on its quality grade or inspection certificate.”

There was some speculation that would allow unregistered wheats from the U.S. to be eligible for CGC grades. But MacAulay said that isn’t the case, noting that unregistered varieties of Canadian wheat are also ineligible for a CGC grade.

“It (American) wheat would be treated exactly like the Canadian if it were unregistered too,” MacAulay said.

Preserving the link between Canada’s wheat-grading system and variety registration presumably protects Canada’s quality control system. But the National Farmers Union (NFU) isn’t so sure.

In an earlier interview NFU vice-president Cam Goff said Canada’s existing grading system doesn’t discriminate against American wheat.

“In fact many southern Alberta feedlots regularly import American corn and barley with no restrictions,” he wrote in an op-ed. “Our system just does not allow American grain to pretend to be Canadian — and there are good reasons for that.”

Over the years multinational seed companies have questioned Canada’s need for a wheat variety registration system, pointing out in the U.S. developers can commercialize any wheat they wish.

The companies say variety registration impedes innovation and investment.

Defenders of wheat variety registration say the process benefits seed growers, wheat farmers and their customers.

To be registered in Canada new wheats are tested for at least two years to see if they meet the agronomic, disease resistance and end-use quality standards for the intended wheat class.

Seed growers and farmers benefit by knowing new varieties have merit. And end-users know how a new wheat will perform in the mill and bakery.

Trade compensation

The USMCA is a historic agreement preserving the world’s largest trade zone, including $120 billion in agricultural trade alone, MacAulay told reporters.

To get that agreement Canada gave up 3.6 per cent of its domestic milk market to the U.S., but Canadian farmers will be compensated, he said.

Dairy farmers will also be compensated for access given up under the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) and Comprehensive Economic Trade Agreement (CETA), MacAulay said.

“I will not have the figure (for the amount of compensation), but I can tell you, yes, we will be compensating both,” he said. “I have already sat down with the supply-managed sectors and we will be working with them in order to put a path forward to make sure the industry remains strong… in our country.”

While in Europe last week, MacAulay said he pushed for trade rules to be based on science.

MacAulay also said he discussed food security and the need for farmers to have the latest technology to produce more food with Graziano da Silva, director general of the United Nation’s Food and Agriculture Organization.

Exports of Canadian agricultural products to the European Union have increased to most member states since CETA took effect just under a year ago, MacAulay said.

“For example, our corn exports to the European Union are up by 82 per cent,” he said. “Our blueberry and cranberry exports are up by 28 per cent. Our maple syrup exports are up by 13 per cent. All told, that represents an increase of over $133 million in new sales for our farmers for the first 10 months of CETA.”

About the author

Reporter

Allan Dawson is a reporter with the Manitoba Co-operator based near Miami, Man. Covering agriculture since 1980, Dawson has spent most of his career with the Co-operator except for several years with Farmers’ Independent Weekly and before that a Morden-Winkler area radio station.

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