When asked for the National Farmers Union’s view of the Canadian International Grains Institute (Cigi) merging with Cereals Canada, Stewart Wells was succinct.
“We take a dim view of it,” Wells, the NFU’s second vice-president, said in an interview April 22.
“Right off the top, one of the concerns we would have is, is Cereals Canada, with all of its corporate board members, setting itself up to be a replacement for the Canadian Grain Commission (CGC) at some point? That’s a pretty key concern. I think you’ve got to scratch pretty hard to find Cereals Canada saying anything positive about the Canadian Grain Commission in the past number of years.”
Grain companies and some farm organizations have raised concerns about the CGC, arguing it adds extra costs to the business of buying and exporting grain.
Wells pointed to comments made by Viterra president and CEO Kyle Jeworski who argued in favour of ending mandatory CGC outward inspection while speaking at the Canadian Crops Convention in Montreal March 6, 2019.
“I think it’s important that we have the Canada Grain Act to better reflect our industry today and prepare for the future,” Jeworski said. “We need to remove unnecessary regulations. There are many examples — grain grading, weighing, inspection. There are things that add cost and delays in our industry.”
Having the CGC, an independent third party, grade, weigh and inspect grain, helps to ensure farmers are treated fairly, Wells said.
Jeworski was referring to those services being provided by the CGC at terminal elevators, where the grain belongs to companies not farmers.
Viterra and other grain companies frequently hire private grain inspection services, which they say grain buyers are satisfied with and sometimes prefer. But because of the grain act, the CGC must grade that grain as it’s loaded on ships. And charges to do it. The companies complain they pay twice for the same service, adding unnecessary costs.
But as protectionism grows, the CGC’s role in grading export grain is more important than ever in dealing with potential disputes, Wells said.
“For 100 years those companies have been trying to get rid of the Canadian Grain Commission,” he said. “They have just become bold enough in the last two years to say it like the CEO of Viterra said in public.”
By weakening or eliminating the CGC Canadian grain will lose its brand, allowing grain companies to play farmers in one country off against farmers in another to get the lowest price, according to Wells.
Some farm groups, including the Keystone Agricultural Producers, also support the CGC.
But others, including the Alberta Wheat Commission support ending mandatory CGC inspection on grain exports.
It’s time to reassess the CGC’s role, considering some of what it does is replicated by Cigi, said one grain industry official, who didn’t want to be named because they didn’t have permission to speak publicly.
“Is there potentially some duplication and potential for inconsistencies because you have people working in the same areas? I think so. I think we definitely need to take a look at how the industry has structured itself and what is it we really want the grain commission to do,” the official said.
“What is its purpose in all of this? Just because it previously was involved in certain activities, including international quality factors, does that mean that it always has to continue doing so? I don’t think so.
“I think you need to look at how the industry in both Canada and abroad have evolved to see where we get the best bang for our buck from our Canadian regulator.”
The official suggested the CGC stick to ensuring farmers get paid by grain companies and leave grain quality control to Cigi and grain companies.
“Ensuring grain quality is at the core of our activities as mandated by the Canada Grain Act,” CGC chief commissioner Patti Miller said in an email April 23.
“To fulfil this responsibility, the CGC regulates the grain-handling system in Canada, manages Canada’s grain quality assurance system and establishes and maintains science-based standards of quality for Canadian grain. Our research, programs and services help support Canada’s reputation as a consistent and reliable source of high-quality grain.”
While the CGC, Cereals Canada and Cigi collaborate they also have different mandates, Miller said.
By law the CGC’s mandate is “in the interests of the grain producers, to establish and maintain standards of quality for Canadian grain and regulate grain handling in Canada, to ensure a dependable commodity for domestic and export markets.
“As the federal regulator of Canada’s grain sector with well-established laboratory capacity, the CGC also conducts high-level grain research work that would not be possible for Cigi/Cereals Canada, given the expertise and equipment requirements. It’s also important to note that the CGC’s role as a regulator is not limited to wheat and barley but Canada’s 20 official grains (named in the grain act).”
A review of the CGC and the Canada Grain Act, which began early in 2019, has been “temporarily suspended” due to the COVID-19 pandemic, Miller said.