Is Canada’s wheat quality assurance system under threat in the current NAFTA talks?
The National Farmers Union says Canada needs to be on guard against U.S. efforts to destroy it.
“Canada’s grain-grading system is the key to our international competitiveness, particularly for wheat,” Terry Boehm, chair of the NFU’s trade committee, said in a news release Sept. 11. “Our grain-growing region is far from ocean ports, so a high-volume, low-price approach is a non-starter. Instead, our marketing strategy is to sell high-value grain to customers who are willing to pay prices that cover expensive transportation costs. Our grading system allows us to produce and deliver the high-quality grain all over the world — not only to Mexico and the U.S. — and our variety registration system is the foundation of our grading system.”
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The NFU points to a ‘fact sheet’ issued by the United States trade representative issued after the U.S. and Mexico reached a bilateral trade agreement earlier this month.
“Building on NAFTA, the United States and Mexico agree to work together in other fora on agriculture matters, improve transparency and consultations on matters affecting trade between the two countries, and provide for non-discriminatory treatment in grading of agricultural products,” the fact sheet states in part.
The U.S. has long claimed, including under former president Barrack Obama’s administration, that Canada discriminates against American wheat delivered to western Canadian elevators. All American wheat is ineligible for an official Canadian Grain Commission (CGC) grade. As a result, American wheat must receive the lowest grade for the wheat class it is intended to be delivered into. In the Canada Western Red Spring (CWRS) class that’s feed, even if the American wheat is a variety registered to be grown in Canada.
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Much of Canada’s grain industry sides with the U.S., but not the Canadian Grain Commission or Agriculture Minister Lawrence MacAulay.
“Canada’s grain-grading system does not prohibit U.S. producers from contracting with Canadian grain companies and receiving fair value for their product,” MacAulay wrote in a 2017 email. “There is nothing in the current grain-handling system preventing U.S. producers from entering into contracts with grain-handling companies or processors located in Canada to get a fair price for the quality of product being delivered.”
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According to NFU vice-president Cam Goff Canada’s grain grading and variety registration systems are never used to block imports of U.S. grain.
“In fact, many southern Alberta feedlots regularly import American corn and barley with no restrictions,” he wrote in a recent op-ed. “Our system just does not allow American grain to pretend to be Canadian — and there are good reasons for that.”
Unlike the U.S., Canada’s variety registration and grading system focuses on delivering a high-quality and consistent product end-users can trust, he wrote.
Goff correctly points out that Canadian farmers are treated the same way as American farmers when they deliver unregistered wheats to a Canadian elevator. However, Canadian elevators that buy American wheat are obliged to tell export customers the grain is not Canadian.
U.S. Wheat Associates, which promotes U.S. wheat exports, calls that discrimination and argues it’s an impediment to Canadian elevators to buying U.S. grain — one that doesn’t exist when Canadian farmers deliver wheat to an American elevator.
The U.S. is one of Canada’s best wheat customers and Cereals Canada wants to keep it that way, says president Cam Dahl. That’s why it wants the Canada Grain Act amended so wheats registered in Canada, but grown in the U.S., are eligible for a CGC grade when delivered to Canada.
With Canada’s weaker dollar, Dahl doubts many American farmers want to ship wheat north. And while U.S. wheat can be purchased at fair price by Canadian elevators based on specifications, American concerns about fair treatment need to be addressed, he has said in previous interviews.
The USTR fact sheet says the U.S. and Mexico have agreed to ‘non-discriminatory treatment in grading,’ which could mean the U.S. wants unregistered American wheats to be eligible for a CGC grade. Canadian farmers don’t have that option, so it’s unlikely Canada would agree to it.
“Every country has their starting points and that’s not always their ending point,” Dahl said in an interview Sept. 12.
“Yes that (fact sheet) goes further than we support, but… I think this is an area where I’m confident we can come to a common agreement that gives equal treatment for farmers on both sides of the border.
“I don’t see this as a major impediment and I have no reason to believe that we can’t come to a common position that satisfies both sides.”