Bill C-13, the proposed legislation to overhaul the Canada Grain Act is unlikely to become law, according to Elwin Hermanson, chief commissioner of the Canadian Grain Commission (CGC).
However, he told the Keystone Agricultural Producers’ (KAP) its study into alternatives to CGC security was not in vain.
“I think the odds favour that the bill is going to die, but it certainly isn’t in the bag yet,” Hermanson said at KAP’s General Council meeting here April 9.
“We anticipate at some point, maybe sooner, maybe later, there will be amendments to the Canada Grain Act back on the scene.”
Earlier this month NDP MP and Agriculture Critic Alex Atamanenko moved a hoist motion to postpone second reading of C-13 for six months. Under parliamentary tradition if a hoist motion passes the bill won’t be debated again during the current session and dies on the order paper.
Although the motion hasn’t been voted on, it’s backed by the three opposition parties.
STILL IN FORCE
Meanwhile, the current grain act remains in force, including the CGC’s program to protect farmers in the event grain companies fail to pay them for the grain they’ve delivered. If C-13 becomes law it’s up to farmers to protect themselves.
“There have been success in this (CGC security) system,” Hermanson said. “It’s not a bad system, but it’s not 100 per cent effective in all cases.”
The CGC’s security program applies to 21 grains and oilseed sold by grade name. Seed and feed is not covered, Hermanson said.
The protection only lasts 90 days after grain has been delivered and for just 30 days after a grain company cuts the farmer a cheque.
“The key to producers… make sure you get paid and make sure you get paid as soon as possible,” Hermanson said. “That is the best security you can possibly have.”
During the last 10 years CGC security has paid out an average of 77 per cent or $4.5 million of the $5.8 million farmers were owed when grain firms went under. Two cases really dropped the average – Venture Seeds and Naber Seed & Grain Co. – where farmers received just 28 and 51 cents on the dollar, respectively.
CGC security costs $9 million a year – $1.4 million for the CGC to administer and $7.6 million in cost to the grain companies, Hermanson said. Companies pass the cost back to farmers. KAP estimates CGC security costs about 23 cents a tonne, or less than a penny a bushel on wheat.
C-13 would also change the CGC’s mandate to reflect how it operates now, Hermanson said.
“Right now the mandate just says we protect producers,” he said. “We still do that. The new mandate would say specifically how we do that, but we also act as a referee to make sure the industry works for the betterment of all of Canada.”
The intent of C-13 is to remove unnecessary mandatory costs under the grain act, Hermanson said. That’s why CGC inward grain inspection at export grain terminals would end. In a later interview Hermanson said it doesn’t make sense that a grain company that owns canola bought and paid from a farmer, has to pay the CGC to inspect it as it’s unloaded in the same company’s terminal.
It makes even less sense for grain shipped east where it’s inspected going in and out of Thunder Bay and then in and out of transfer elevators in the lower St. Lawrence River, he said.
Inward inspection makes more sense if the grain entering a terminal is owned by a different company or by the wheat board, Hermanson agreed. But in those cases inward inspection can be requested from a private company.
The Western Grain Elevator Association says it wants mandatory CGC inspection to remain for wheat board crops, but made optional for other crops.
But Hermanson said it has to be all or nothing.
“It’s difficult with our labour agreements,” he said. “It’s difficult to have people waiting to see if they get called or not. For us it doesn’t work very well.”
Hermanson assured Grandview-area farmer Larry Bohdanovich that passing C-13 would not undermine Canada’s reputation for exporting the best grain in the world. The CGC will continue outward inspection and issuing “Certificate Finals” guaranteeing grain quality.
“That’s your quality con-t rol to your customers,” Hermanson said.
“You never know what you’re shipping until you monitor what goes on the boat because even at a terminal or transfer elevator there can be blending. That’s why outward inspection is so important.”
Grain shippers, including producer car shippers, could still request inward inspection, but the service would be provided by a private inspection company for an undetermined price.
KAP vice-pres ident Rob McLean said he’s uneasy about losing CGC oversight, especially for producer car shippers.
Hermanson said a few wrinkles would have to be worked out in regulation to ensure third-party inspectors will be available to inspect producer cars. Farmers who disagreed with the grades received at port could appeal them to the CGC.
The current act and regulations will allow the CGC to accredit private inspectors and audit their work if the industry wants that, Hermanson said.
The CGC has a pilot project underway to certify private inspectors grading grain shipped in containers. The goal is for the grading to be so accurate the CGC would back it 100 per cent, Hermanson said.
The CGC has another pilot project where it audits and certifies the sampling and grading done by companies shipping grain in containers is done properly.
Hermanson said last year Canada exported three million tonnes of grain in containers.
KAP delegates passed a resolution calling on the CGC to audit and accredit private companies hired to do inward grain inspection, if mandatory CGC inward inspection ends. [email protected]