The Co-operator began an ambitious project a few months ago, setting out to tell the history behind the Canadian Grain Commission as it celebrates 100 years of service this month.
One of the things we discovered early into the effort was that there is a lot of history to tell — the story of how it came to be, the people who implemented its mandate and its evolving role in the quality side of marketing Canadian-produced grains and oilseeds. And, as is often the case, the story had to be condensed to a size that fit the contraints of a weekly tabloid newspaper.
We also made the decision to give CGC administrators oversight in how their story will be told. After all, when you’re celebrating a 100th birthday, you should get to have some license in such matters.
But history also speaks for itself, and the Canadian Grain Commission’s story is a proud one.
The commission was born of a need to provide some checks and balances in Canadian grain marketing. Then, as now, this region was seen as a vast sea of opportunity. But they were also a place where farmers attempting to get their products to distant markets were vulnerable to the handling and transportation companies.
The real or alleged anti-competitive business practices of those early times have long since ended, but that doesn’t mean farmers don’t need protection. Today, the railways have never been more powerful and we see continued consolidation in the grain-handling business into the hands of companies that have no particular loyalties to Canadian commodities.
Nor has there been a change in the importance of what the commission provides to both farmers and customers — an objective and independent analysis of grain quality. Farmers rarely deal directly with end-use customers. They deal instead with middlemen. The grading system gives the farmer assurance that he or she is being paid for the same quality that the middleman is delivering to the customer.
Early farm leaders convinced politicians that a regulatory intervention was in order to ensure farmers’ production was fairly graded, they got paid and they were not held to ransom for access to the system.
The Canada Grain Act of 1912 created the Board of Grain Commissioners, as the Canadian Grain Commission was then known. Ever since, Canadian grain producers have been able to dispute the grade and dockage received at a licensed primary elevator.
It has proven extraordinarily helpful over time. Farmers have been able to look to the CGC for a binding, independent, third-party assessment of quality. They have also been able to seek the commission’s help when a CGC-licensed company fails while still owing farmers money. They are also guaranteed access to producer cars, although it is not clear whether that access will continue to provide meaningful value now that the CWB’s single desk is gone.
A century ago, the commission set standard grades for seven grains. Today it is 21, including some crops, such as canola, that didn’t exist when it began operations.
Canadian grain is sold all over the world on the basis of a certificate from the Canadian Grain Commission indicating the shipment is what the seller says it is. No other country can claim the same reputation for quality and integrity.
No less significant is the role played by the Grain Research Laboratory, which since 1914 has underpinned the grading system with objective science that better understands the factors contributing to end-user quality and those factors detracting from it, is second to none.
As well, its work in pesticide-residue testing, which today tests for more than 200 residues in grains and oilseeds, ensures safety and maintains market access.
Until now, the cost of this service has been shared with industry paying a portion. With last week’s budget, the federal government has indicated the commission will move to full self-sufficiency by 2014. As well, there is legislation soon to be introduced to “modernize” the commission’s role.
There are already questions surfacing over whether some of the commission services that are now mandatory should be made voluntary or outsourced to lower-cost providers — once industry is required to foot the full bill. Already, private grain-marketing companies and some farm organizations are questioning whether the costs of Canada’s grading and quality-control system outweigh the benefits.
You could argue that the Canadian Prairies were a very different place 100 years ago, but you could also argue not much has changed.
Re-examining costs and benefits is never a bad thing. But the value of a quality reputation based on independent and credible analysis must not be underestimated.