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Comment: A method to its madness

There’s more to Richardson’s canola council withdrawal than meets the eye

Canola is a Canadian success story and there’s no disputing the Canola Council of Canada’s role in making it so.

That’s why when Richardson International, Canada’s largest grain company, didn’t renew its council membership in 2018, there was shock, disappointment, concern and even anger.

Why would Richardson suddenly pull out of an organization with a proven track record benefiting the entire canola sector?

Richardson’s senior vice-president corporate affairs and general counsel, Jean-Marc Ruest, said his company wants the canola council, the Flax Council of Canada and Soy Canada to form a single oilseeds council to save money. Fair enough, but leaving the council seemed extreme, almost petulant.

Dig deeper and the picture changes.

First, this isn’t new. For several years Richardson has been promoting greater council efficiency, but Richardson says the can just kept getting kicked down the road.

Second, Richardson’s decision wasn’t sudden. The council was warned more than a year ago Richardson would secede without reforms.

And third, Richardson wasn’t alone. Viterra, Canada’s second-largest grain company, was united with Richardson on streamlining the council. Viterra was going to walk too, according to reliable sources, but had a change of heart at the last minute.

Had the council lost its two biggest grain company-members, the question would be, ‘what’s going on with the council?’ instead of, ‘what’s with Richardson?’

Sources also say most other major grain companies share Richardson’s position.

If so, why hasn’t the council acted?

The answer perhaps rests in how the council functions. Policy is based on consensus — an approach that has served the council, and the industry well, for more than 50 years, but can also stifle change.

The status quo has a lot of momentum. Change isn’t easy, especially in the face of success.

There’s no disputing, including by Richardson, that the canola council does good work. Its top-notch staff is professional in everything it does.

Canola’s value to the Canadian economy tripled over the past decade to $26.7 billion a year, said an independent analysis released by the council last year. The council is credited with deftly pulling together disparate and competing interests in the pursuit of a common cause.

Richardson mustn’t become complacent, or forget the council’s role getting canola to where it is.

If it ain’t broke, why fix it?

It’s about time and money and the bigger picture.

As canola production has grown, so too have council revenues and spending.

Membership in Soy Canada and the canola and flax councils, cost Richardson “well over” $1 million a year, Ruest says. Most of that money went the canola council.

Moreover, membership in every industry association eats up Richardson staff time. And often the issues dealt by different associations are the same or similar.

Despite its huge contribution, Richardson had no more say in the canola council than any other member.

That’s a good thing for the sake of industry co-operation and trust. But it underscores inequities in the council’s funding model.

Coincidently Cereals Canada’s entire budget is just $1 million.

Cereals Canada, like the canola council, is funded by farmers, grain and life science companies. Both organizations do market development and tackle trade issues. The council has 38 employees compared to Cereals Canada’s six.

The council had $15.7 million in revenues in 2016. However, unlike Cereals Canada, the council is heavily involved in agronomy and research, which are highly valued by farmers.

And agronomy is paying off. Canadian canola yields jumped 61 per cent over 20 years to average of 42.3 bushels an acre in 2016. Improved genetics are part of it, but so are better farming practices.

Richardson questions the council’s role in agronomy. An alternative is to transfer it to the provincial canola grower associations, or the Canadian Canola Growers Association with the appropriate reduction in council membership fees to offset the cost.

The elephant in the room is that canola is a victim of its own success.

The Cinderella crop, so named for its rags-to-riches story, has been transformed from weedy, low-yielding, industrial oil-producing rapeseed, to canola, a resilient, high-yielding crop that produces heart-healthy oil and valued protein meal for livestock. Canola is probably, most years, western Canadian farmers’ most profitable crop.

Fifty years ago canola needed the focus and dedication of a single industry association to push it to where it is today. Canola mustn’t coast, but it’s time to take stock of what’s been accomplished, what still needs to be accomplished and determine the most efficient way to deliver it.

Farmers don’t grow only canola, and grain companies don’t just handle canola. To remain sustainable farmers need a range of profitable crop options.

The flax council closed its office Jan. 31 due to a lack of funds, largely because Richardson pulled out of it too. The flax council will operate online with a single part-time employee. But think of what the flax council could do with at least a full-time administrator and agronomist working out of the canola council’s office.

An oilseed council could continue to promote canola, but also work to make flax more profitable, making farmers less reliant on canola, whose tight rotations threaten future profitability.

Some farmers complain of ‘checkoff fatigue.’ In response five Manitoba commodity groups — wheat and barley, pulse and soybean, corn, sunflowers and flax growers — are proposing to merge. The goal is to make better use of farmers’ money by improving the profitability and sustainability of all their crops.

Richardson is proposing the same with an oilseeds council.

Let the debate begin.

About the author

Reporter

Allan Dawson is a reporter with the Manitoba Co-operator based near Miami, Man. Covering agriculture since 1980, Dawson has spent most of his career with the Co-operator except for several years with Farmers’ Independent Weekly and before that a Morden-Winkler area radio station.

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