A metaphorical bombshell exploded this week over the corner of Portage and Main, the historic heart of Canada’s grain trade.
Richardson International, Winnipeg’s largest homegrown grain trader, is pulling its financial support out of the Canola Council of Canada, Soy Canada and the Flax Council of Canada.
As a result, the flax council has already announced it will be shuttering its Winnipeg office, a move that also affects the Manitoba Flax Growers’ Association, which had shared the spot. Both groups say they’ll survive, but admit the funding hit will have an effect.
Soy Canada says the impact will be minimal. In no small part that’s due to its funding formula. Annual membership fees paid by industry members — such as seed companies, crushers and exporters — are based on sales or volume and are capped at a maximum of $25,000.
The biggest loser under this scenario is surely the Canola Council of Canada, which received the lion’s share of the $1 million that Richardson says it shelled out annually.
Richardson executives told media they weren’t convinced the company was getting value for money. In particular, they noted they’ve been encouraging the oilseed groups to merge together to get more bang for their buck.
The groups in question were apparently reluctant. The smaller ones worried they’d be lost in the shuffle and the far-larger canola council was said to be concerned that its efforts would be diluted.
Here Richardson may have a point. After all, provincial farm groups are having this very discussion amongst themselves, with the stated goal of bringing the concept of a merger to memberships for a vote. It’s never a bad idea to look for a better way.
It would appear, however, Richardson has concerns going well beyond capturing a few more efficiencies. It seems it is also pushing for a change to the mandate of the organizations.
Richardson is a privately held company. It is completely within its rights to spend (or not spend) its money.
But for a grain company whose very existence and profitability hinges on volume of grain handled, it’s a strange choice to ignore the canola council’s exemplary record of growing and maintaining volume through agronomy.
It appears that Richardson sees the canola council’s efforts as redundant.
It’s true that the industry has its own complement of agronomists, but there is a nuance between the roles of sales agronomists and independent extension advisers that should not be ignored — at least not by farmers.
It also doesn’t recognize that the canola industry has some looming agronomic challenges, particularly clubroot. It was a Canola Council of Canada agronomist who first identified the disease in Alberta and the organization leads the charge against it.
Richardson also appears to object to the canola council’s market development work, noting global canola production is now measured in tens of millions of tonnes annually. The company appears to feel there’s no need to sing the crop’s praises, and where there is, the private trade is doing a fine job.
That assumes the status quo will continue, however. Canola is still a relatively small crop. Global annual soybean tonnage alone is four times as large as canola production. The global oilseed market is a crowded place with many contenders and a lot of sharp elbows.
Canola has long made hay on its reputation as a healthy food ingredient. But the continuation of that can’t be assumed. In early December, Temple University suggested canola oil could be linked to poor memory and reduced learning ability in Alzheimer’s patients.
There will undoubtedly be more research in this area, which will either prove these findings or deposit them in the junk science box. There’s no question canola has its enemies. A quick Google search of the internet containing the terms “canola, “oil,” and “harmful” returned nearly 400,000 hits in 0.57 second.
That’s not to say science won’t evolve and not always in the way an established industry desires. Note how research changed our understanding of the effects of trans fats created when vegetable fats are hydrogenated on human health, with repercussions that ripple throughout the food industry.
In the meantime, it is important to have an industry voice that can offer a reasoned response to public concerns.
Beyond that, the industry needs leadership that will chart a course for the future, both in meeting emerging market demands and supporting research.
The Canola Council of Canada takes a value-chain approach to commodity development. It has continued to evolve over the 50-plus years it has been in existence.
Richardson’s withdrawal is a blow but the council is in no imminent danger of demise. Farm groups and other industry players have stated they’ll continue to support it.
Richardson should too, for its own sake.