But Canadian officials deny claims by U.S. administration and U.S. Wheat Associates that Canada’s quality control system discriminates against imported U.S. wheat.

Canadian officials concede imported U.S. wheat formally receives the lowest grade in the wheat class it’s intended for, but stress there are no regulations or commercial impediments blocking American farmers from selling wheat in Canada, as long as the varieties are registered in Canada.

Canadian Grain Commission officials say U.S. grain can also be sold outside of the grading system based on specifications — similar to how wheat is marketed in the U.S.

But American wheat must get the lowest grade, which is Feed in the new Canada Northern Hard Red class, proving American wheat is treated differently, Dalton Henry, U.S. Wheat Associates’ director of policy, said in a telephone interview.

“Yes, the U.S. producer could deliver wheat to (a Canadian) elevator and an elevator could choose to buy it on spec and they could work to negotiate what that price would be, but just because it can legally happen doesn’t mean that it does happen, or that there is not a barrier there,” he said.

It’s become a bigger issue since U.S. Wheat Associates began comparing wheat prices at U.S. and Canadian elevators equal distance to the border following the demise of the Canadian Wheat Board in 2012.

Economic theory holds that in a well-functioning open market Canadian and American wheat prices should come together, or arbitrage as it’s known.

Initially U.S. prices were higher, which wasn’t unexpected given the change in marketing was followed by a bumper crop in 2013 and a massive backlog in grain shipping in 2013-14. But last summer, U.S. Wheat Associates estimated Canadian wheat prices were 50 cents a bushel higher than those in the U.S.

“At that point it became much more real and much more urgent for our growers, particularly those who are within driving distance of a Canadian elevator,” Henry said. “Our estimates are that there are about 3.3 million tonnes of U.S. wheat production within about 100 miles of a Canadian elevator.”

So far, most of the trade flow has been in the opposite direction. This crop year Canada has exported more than one million tonnes of wheat to the U.S., while the U.S. has exported around 100,000 tonnes to Canada, Henry said.

“That is a spike that has really caused the issue to get back on the (American farmers’) radar in a bigger way,” Henry added. Statistics Canada data shows American wheat exports to Canada averaged just 38,286 tonnes the last three calendars years.

Varietal registration

Bill C-48, which died when the federal election was called last fall, would have permitted American wheat to be graded the same way as Canadian as long as the variety is registered in Canada, CGC spokesman Remi Gosselin said.

The Canadian government is aware of U.S. concerns, Canadian Agriculture Minister Lawrence MacAulay said in an email, adding the government is looking at what changes may be needed in the grain sector to align it with a changing market.

“We are listening to stakeholders and partners. We will consider their interests, and how best to address them, while maintaining the protections and assurances the Canada Grain Act provides to Canadian producers and their customers,” he wrote.

In addition to grading discrimination, Henry claimed Canadian regulation requires foreign grain, and Canadian grain mixed with foreign grain, to be labelled — a practice he said would discourage Canadian elevators from buying American.Not so, said Gosselin.

“There is no GCG requirement, or to our knowledge, grain elevator documentation that states that grain delivered by U.S. producers must be labelled ‘foreign grain,’” he said.

“If an American grows Faller (or any other wheat variety registered in Canada) and delivers it into Canada there’s no segregation requirement for foreign grain.”

Same bin

In other words, a Canadian elevator can buy Faller wheat grown in the U.S. and dump it in the same bin as Canadian-grown Faller.

In most cases, the grain is likely headed straight back to a U.S. customer, another industry player said.

“If a Canadian company… is bringing in Faller or Prosper from the U.S. it’s probably destined for the U.S.,” Cereals Canada president Cam Dahl said in an interview.

Wade Sobkowich, executive director of the Western Grain Elevator Association, which represents Western Canada’s main grain companies, said the grade is not an impediment to trade.

“It is not a roadblock to commerce between U.S. sellers and Canadian grain buyers. As long as you have a willing seller and a willing buyer, the grain can be imported into Canada on a spec basis,” Sobkowich said. “So it gets the lowest grade, but that’s a secondary issue. As a seller do you care that you get a certain grade or that you are getting the price that you want?”

Members of the Canadian National Millers Association (CNMA) have no problem importing American wheat, president Gordon Harrison said. Canada’s wheat registration system accommodates the commercialization of American wheats, while protecting the integrity of Canada’s premium milling classes, Canada Western Red Spring and Canada Western Amber durum wheats, he added.

Dahl hopes Canada passes the legislation to allow American wheat to be graded the same way as Canadian.

“Anything we can do to resolve irritants like this would be helpful,” he said.

• Read more: U.S.-Canada wheat tensions already easing

Addressing Canadian grading is a high priority for the U.S. administration. U.S. Agriculture Secretary Tom Vilsack raised it last week with MacAulay during the G7 agriculture ministers’ meeting in Niigata, Japan.

“This is a concern that I have raised on a number of occasions,” Vilsack told reporters here on an April 27 teleconference.

“We still have an issue with Canada on wheat grading,” U.S. Chief Agricultural Negotiator Darci Vetter later told reporters. “What farmers tell us is that there are in fact circumstances where the grade matters and we think the regulation frankly is unfair so we are going to keep working on it.”

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It wasn’t a secret in 2011 what the newly elected Harper majority government had in store for the farmer-run board — ending the monopoly was an election promise and one of Prime Minister Stephen Harper’s goals going back to his days running the National Citizen’s Coalition. But what took board supporters by surprise was how quickly the government moved. It was elected in May 2011 and the legislation was law by mid-December. The monopoly ended Aug. 1, 2012, the start of the new crop year.

There were no in-depth studies, reviews or much in the way of consultations, except among open-market supporters. Ritz declined wheat board directors’ invitations for a meeting. As one industry observer put it, Ritz knew this was a dog he had to shoot — looking it in the eye wouldn’t make it easier.

There were farm rallies and lawsuits to save the wheat board, but Ritz prevailed. In an Oct. 20 telephone interview, Ritz said he asked former Progressive Conservative agriculture minister Bill McKnight and Charlie Mayer why they had only removed oats from the wheat board’s monopoly in 1989.

“And they said, ‘because we thought we had time,’” Ritz said. “So I took that. I know the bureaucrats and even some of the politicians I work with said, ‘let’s do this in stages. Let’s do barley, then durum and wheat over a period of five to seven years.’ I said, ‘no, if we’re going to do this, we’re going to do it because no farmer wants that dragged-out thing.’ They want business decisions made. So we decided that we’re going to map it out and here’s how it’s going to be and that’s the way it went.”

Since then farmers have embraced the change, Ritz added.

“They are doing well.”

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“On the face of it, it contravenes the existing legislation,” FCWB chair Stewart Wells said in an interview July 14.

According to Wells, the wheat board act says farmers are to get all the money earned by the board from grain sales after expenses related to those sales are paid.

The allegations are part of a class-action lawsuit launched by four farmers supported by the FCWB in 2013. The farmers — Andrew Dennis of Brookdale, Man., Nathan Macklin of DeBolt, Alta., Harold Bell of Fort St. John, B.C. and Ian McCreary of Bladworth, Sask., — were asking for $17 billion in compensation on behalf of western Canadian farmers for the loss of the board’s single-desk power, board assets and the misallocation of farmer funds.

In 2013, Federal Court Justice Danielle Tremblay-Lamer struck most of the plaintiffs’ case, except the alleged misallocation of farmers’ money, Wells said. She ruled the plaintiffs could pursue that part if they amended their Statement of Claim, which they did. It was served July 10.

The Federal Court of Appeal later upheld Justice Tremblay-Lamer’s ruling and the Supreme Court of Canada declined to hear the case ending the farmers’ $17-billion claim.

Now the Federal Court will decide whether the plaintiffs class-action suit should be certified, which could happen by fall. If certified, the discovery process begins and the plaintiffs and federal government can seek information about the other’s case.

Since 1998, when changes to the wheat board act gave farmers majority control of board operations, the board returned 93 per cent of grain sale revenues to farmers after operating expenses, Wells said.

In 2011-12 — the last year the board had a monopoly — only 83 per cent of the revenue was returned, even though revenues were the third highest since 1998.

That’s because expenses were higher than usual. The board did have new, one-time costs related to the switch to an open market, including severances for fired employees and pension liability. However, the government allocated $349 million to cover those costs. The wheat board’s financial report for 2011-12 — the last publicly available — shows the government spent $177 million of that $349 million. A footnote says the rest of the money would be available for subsequent years.

However, since no other financial reports have been made public because Agriculture Minister Gerry Ritz deemed them to be commercially sensitive, there’s no way to know if the money was spent, Wells said.

“But in those same books in 2011-12 it shows at least some money being taken out of the pooling accounts to directly offset some restructuring expenses, which does not seem appropriate… ” he said.

Money was also taken from the board’s contingency fund.

It’s spelled out in the board’s 2011-12 annual report on page 27. The report says $183.2 million was spent on restructuring, but was offset by $177.3 million from the government leaving the board “a net restructuring expense of $5.9 million.”

The report says in part: “In addition to the net $5.9 million in restructuring expenses recognized in earnings and charged to pool accounts for the year ended July 31, 2102, $22 million in pension expenses incurred in prior years were recognized as a charge to the contingency fund.”

The contingency fund came from fees farmers paid to use the board’s Producer Payment Options and was supposed to break even over time.

“It’s not a stretch to maybe think too much money was being charged in fees for farmers using those programs,” Wells said.

“It could be they were using the contingency fund to build up a nest egg for the new company.

The legal costs are adding up. The FCWB continues to seek donations, Wells said.

The government’s decision to, “give away” CWB assets paid for by farmers to the Saudi Arabian government and Bunge, has sparked donations, he said.

The government says G3, (Global Grain Group), a joint venture of Bunge and Saudi Agricultural and Livestock Investment Co. (SALIC), is purchasing a 50.1 per cent stake in CWB for $250 million, but the money will remain in CWB to make it stronger. The other 49.9 per cent will be held in trust for farmers who have delivered grain to CWB or who deliver in the future.

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CWB announced last week that it would purchase Mission Terminal, Les Élévateurs des Trois-Rivières and Services Maritimes Laviolette for an undisclosed amount. Some have concerns that the former Canadian Wheat Board’s contingency fund, which farmers claim as theirs, will bankroll the government-owned grain company’s privatization.

The contingency fund was created in 2001 to backstop the now-defunct Producer Payment Options. Surplus earnings from hedging and related activities were used to offset hedging losses.

The deal, to be completed by year’s end, is being financed through CWB retained earnings and non-government guaranteed borrowing, CWB president and CEO Ian White said in an interview.

Federal legislation requires CWB Ltd., created when the Canadian Wheat Board’s marketing monopoly ended, to either privatize by 2018 or wind down.

Some farm leaders, including Keystone Agricultural Producers (KAP) president Doug Chorney, worry the contingency fund is being misused.

“They (federal government) should be paying for this (purchase), not farmers,” Chorney said in an interview. “That’s an opinion I’ve heard a thousand times from all farmers I’ve talked to.”

“We’re certain that money is not farmers,’” White said in an interview. “I know that farmers felt that was their money but in actual fact it was never their money. It wasn’t quite right to be saying at the time that it was their money. There was always a view put around that the CWB was farmer owned, but in effect the CWB was farmer controlled by a board of directors. The ownership was always ultimately with the government.”

According to former farmer-elected wheat board director Stewart Wells, the contingency fund belongs to the farmers.

“Every cent of that money was made because of grain sales made for farmers,” Wells said. “It was made in the normal operations that the wheat board had marketing grain from western Canadian farmers. Period.”

Grain Growers of Canada president Stephen Vandervalk said his personal view is that the money is farmers’.

“There was a precedent for that because they (wheat board) did give some money back… when they had too much (in the fund),” he said. “It’s pretty hard for them to say it’s their money when the one year they did give it back (to farmers).”

That was in 2005 when the fund exceeded the $60-million cap by $7.5 million. Later the cap was increased to $200 million.

However, Vandervalk said he is so pleased the government ended the wheat board’s marketing monopoly, he is willing to forgo the contingency fund money.

“I contend overall most farmers are happy with the final outcome and we want a strong competitor out there in the CWB and to do that they need some export capability because they’re struggling to get into the West Coast,” Vandervalk said.

The Western Canadian Wheat Growers Association holds a similar view, said president Levi Wood.

“If we can’t get equity out of the CWB it’s important to note that at this point as farmers we’re benefiting from an open market as well as having the CWB being a strong competitor in the market,” he said.

Varied assets

Mission Terminal’s assets include a 136,500-tonne-capacity grain terminal at Thunder Bay that handles about 1.5 million tonnes of grain a year. It owns a 5,800-tonne-capacity primary elevator at Alexander, Man. Mission Terminal has equity in three producer-car loading facilities: White Mud Trading Co. at Frontier in the southwestern corner of Saskatchewan, Willows Grain Co. at Willows, Sask., and the Boundary Loading Group of four facilities on the Boundary Trails Railway line in southern Manitoba.

Mission Terminal has equity stakes in five short line rail operations: the Great Western Railway, Great Sandhills Railway and Long Creek Railway in southern Saskatchewan and the Boundary Trails Railway Co. and Lake Line Railway in Manitoba.

Les Élévateurs des Trois-Riviéres (ETR) has a transfer elevator on the St. Lawrence River, which handles about six million tonnes of grain a year and can also handle alumina (aluminum oxide) and fuel coke.

Services Maritimes Laviolette provides stevedoring and related services for ETR.

“This is a very good fit for us,” White said of the purchase.

“It’s part of what we hope to have as a network of assets across Canada. It provides us with a growth opportunity.”

The companies the CWB is buying will operate as subsidiaries under existing management and staff, including Adrian Measner, the Canadian Wheat Board’s former president and CEO and now head of Mission Terminal.

In September the CWB announced it would give farmers $5 of equity in the future privatized CWB for every tonne of grain sold to the current CWB. White said because of the high cost of creating a new grain company, the CWB will also seek capital from sources other than farmers.

The Western Grain Elevator Association doesn’t oppose the CWB’s purchase because the financing isn’t government subsidized, said executive director Wade Sobkowich.

“We support competition in the grain business and this shows how competitive it is,” he said. “It’s too bad there isn’t the same level of competition in the rail industry.”

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But July 31, his last day as executive director of Grain Growers of Canada, brought him a challenge he hadn’t expected. His doctor told him he had an advanced case of bladder cancer. What was to have been a quiet summer for him and his wife turned into the agony of surgery and treatments.

By mid-November, he was able to start working part time, but admits his energy fades and the days following a treatment are low points.

However, he doesn’t spend much time in an interview feeling sorry for himself and in conversation is soon running through the issues facing the council and grain industry.

His predecessor, Dennis Stephens, focused on major issues such as the presence of genetically modified traits in grain shipments and removing barriers to the international shipments of grain.

For Phillips, the pivotal issue will be the shape of the country’s grain industry now that the Canadian Wheat Board — the face of the Canadian grain industry in many countries — no longer has monopoly over wheat and barley exports.

“We have to take a good look at where we are going,” said Phillips. “There is a real need for us to be co-ordinated so we don’t confuse the customers. They want to buy Canadian grain and not have to be pitched for grain from particular provinces. We have to focus on what’s best for the customer.”

Two new organizations — Cereals Canada and the Barley Council of Canada — have been created this year, and that has implications for the Canadian Grains Council, he said.

“We have to sort out the role of the council,” said Phillips. “Is it to be a council of industry councils or does it have another purpose?”

For example, his organization could assist new councils in dealing with research issues and other services to farmers, he said. It also needs to consider how smaller, non-grower members — such as the railways, grain-handling terminals, ports and farm supply companies — might best fit into the scheme of things.

Other issues high on his agenda are the rail transportation system, which has been strained by this year’s bumper crop in Western Canada, and the revamping of the Canadian Grain Commission, which has raised concerns with its plan to increase fees.

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“Mr. White has shown exceptional leadership during a time of significant transition for the CWB. He has my full support and confidence in continuing to lead the CWB as a voluntary marketing option for farmers during the transition period and in the preparation of a privatization plan.”

White, who first joined CWB in 2008, convenes over a five-member board of directors appointed by the federal government.

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This industry needs more people willing to step up, speak their minds and contribute their time guiding farm organizations and policy discussions.

Harder, one of the six inductees into Manitoba Agricultural Hall of Fame, and Sirski were both in Winkler last week, among the 300 or so gathered to celebrate people who have provided leadership over the course of their careers.

This year’s six inductees reflect the many forms leadership can take.

Charlie Froebe, a Carman-area farmer, recognized that the development of the canola industry was hindered by farmers’ inability to get post-harvest cash advances so they have marketing flexibility. Such advances were available for cereal crops sold through the Canadian Wheat Board but there was no program for open-market crops. So he built one, including the necessary computer software to support it.

Harder, a farmer and seed grower, became involved in farm policy through the co-operative movement. Herbert and Helen Kletke are tireless community workers who turned their Teulon-area farm into an extension vehicle for plot tours and demonstrations of new farming ideas. John Kuhl, one of the founders of the Southern Manitoba Potato Company, led nationally as president of the Canadian Horticultural Council. Vern McNair’s contribution was as a public servant who communicated extension information to farmers. 4-H leaders were collectively recognized for their 100 years of rural youth development work in the province.

But as the farming community gathers each year to recognize these past achievers there are niggling worries over whether the industry’s leadership pool is running dry.

As farms have grown larger, the rural community has shrunk. There are fewer people and those who remain are much busier running their farm businesses and keeping their community organizations afloat. Commodity groups are finding it hard to get people to fill volunteer director positions.

For Harder, participation in farm groups is about contributing to the democratic process. It is a privilege and a duty. He pointed to other parts of the world where people are dying for the rights Canadians take for granted.

Never one to back down from a debate, he says it’s not about everyone agreeing all of the time, but about contributing to a broader discussion. “A lot of us have different philosophies, but we all want to get to the same point,” he noted.

At the same time, he balks at the pressure to conform. “A lot of farm leaders today put their finger in the air and see which way the wind is blowing so they can say something favourable.”

Sirski, a Dauphin-area farmer who has been promoting the need for leadership development, says the problem has become more apparent since the last of the Prairie grain co-operatives disappeared a decade ago.

“That was a great training ground for a lot of Manitoba and western Canadian farm leaders,” Sirski said.

Farmer members had a financial stake in those co-operatives, which provided an incentive for them to attend local meetings to hear what the CEO had to say. “You could learn how a meeting was run and from there had an opportunity to go to your annual general meeting and see how a big meeting was run and you got to learn about the business,” he said. “We lost all that.

“The second thing is our businesses. We are managing multimillion-dollar businesses right now and a lot of guys look at this and say, ‘I am spending a day or two or a week away from my farm, whereas my neighbour is out there working and managing his own business,’” Sirski said.

He understands why farmers stay home. He was among them until the early 1990s when the grain sector was struggling and farmers were looking for someone to mobilize them into action. Sirski stepped forward to help organize a rally drawing attention to farmers’ plight.

He was also pivotal in organizing a Manitoba Canola Growers Association leadership workshop earlier this year. That model is now being studied for its potential to build capacity for farm organizations through Growing Forward 2.

“We tried to get people thinking about being leaders and what it meant to be a leader,” Sirski said.

There’s something else these two gentlemen can agree upon — once they got involved, they were hooked.

“I’ve learned far more than I’ve ever given,” said Sirski. “I think it has developed me as an individual in a way I never would have done sitting on a tractor seat.”

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The federal government gave $348 million last year to cover CWB’s “legacy liabilities,” including pensions and pensioners’ benefits. Some of those funds were used to purchase a $150-million indexed group annuity buy-in from Sun Life Financial, the CWB recently announced.

“No matter what happens in the future with the wheat board, they can rest assured if anything needs to be fixed up with the pension plan Sun Life will be the one there to guarantee that pensioners get their money,” said Brent Simmons, Sun Life’s senior managing director.

The deal, which covers current CWB employees as well as already-retired wheat board employees, is good news, said Bob Roehle, past president of the Canadian Wheat Board Retirees’ Association.

“It sounds like they’ve been good to their word in terms of ensuring that the pension is sound going into the future,” Roehle said. “I expect Sun Life will be around a lot longer than the CWB.”

Federal legislation requires the CWB to be privatized within four years or wound down.

Purchasing the annuity is good for the company too because it reduces its future risk, said Andrea Carlson, CWB vice-president of corporate finance and strategy.

In the short term, Sun Life will provide lump sum pension payments to CWB to distribute to pensioners, but the company wants to turn the administration over to a third party.

Meanwhile, retired employees of the Canadian International Grains Institute (Cigi) got some bad news. While their pensions are safe, their health-care benefits have been reduced and life insurance cancelled, although pensioners received some cash in lieu of their life insurance.

Cigi can no longer afford the skyrocketing costs of benefits, said Earl Geddes, the institute’s executive director.

Ottawa refused to provide a legacy liability payout similar to the CWB, he said. Cigi’s 15 retirees agreed to the cuts earlier this year.

“We had a responsibility to our retirees, we’ve dealt with it and we’re moving on,” Geddes said.

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The Canadian Wheat Board earned $7.2 billion in revenue, distributing $4.85 billion to farmers — the third highest for both on record — in 2011-12.

“We are actually very proud of those results in that final year given the change (ending the monopoly)… while the whole sales process was going on,” CWB president and CEO Ian White said in an interview May 14.

The annual report was tabled in the House of Commons Feb. 15 and posted on the CWB’s website early last month without any public announcement or followup meetings with farmers.

The wheat board sold 19.98 million tonnes of wheat, durum and barley in the crop year that ended July 31, 2012, up almost 500,000 tonnes from the year previous.

To measure its marketing performance early in the crop year the wheat board sets what it hopes to earn above American grain prices. In 2011-12 it exceeded its targets. The board wanted to earn an average of $6.50 a tonne more for wheat but beat it by $7.48 a tonne or 20 cents a bushel.

The target for durum and designated (malting) barley was $4.50 and $10 a tonne above the U.S., respectively, but came in $7.70 and $15.30 a tonne higher.

The results feed the ongoing dispute between former wheat board directors and the federal government over whether farmers should be compensated for the loss of the single desk as well as over the board’s assets.

“It’s a real tragedy that farmers in Western Canada are losing that money,” said Stewart Wells, a Swift Current, Sask. farmer who was a farmer-elected director. “That’s part of the class-action (lawsuit) case and makes up the majority of that $17 billion that we say farmers have lost because of the loss of the single desk.”

The Friends of the Canadian Wheat Board launched the suit in February. It also wants compensation for the assets and the contingency fund the new CWB kept.

The government successfully argued in court it didn’t need farmers’ approval through a vote to end the single desk because it was forming a completely new organization, Wells said. “If that’s the case those assets that farmers had in that old organization should be paid out to the farmers,” he said.

The CWB sees its differently.

“The contingency fund is something built up out of CWB trading activities over a period of years,” White said. “That’s not farmers’ money. That’s not part of the pool.”

The same goes for assets such as the wheat board’s 3,375 hopper cars, which are currently not for sale, White said, and its Winnipeg office building, which is.

The contingency fund was set up to even out surpluses and losses from farmer pricing programs outside of the traditional pools. Oct. 18, 2011 the federal government ordered all profits from non-pool programs moved to the contingency fund.

As of Aug. 1 money from the fund could be used for anything set out in the CWB’s annual corporate plan or for anything approved by the agriculture minister with the concurrence of the finance minister, the 2011-12 annual report says.

Money from uncashed farmers’ cheques used to go into a “Special Account,” which then funded bursaries and grain-related research. That money was also transferred to the contingency fund.

The report says $22 million in wheat board pension expenses from previous years was charged to the contingency fund in 2011-12.

“It was deemed to be one of those things that should rightly go to the contingency fund because we hadn’t charged pool accounts previously for it and we didn’t want to lump the last pool account with a large bill,” White said.

In the future, the federal government will keep the old wheat board’s pension fund solvent and pay for its administration, he added.

The new CWB started the current crop year with a clean balance sheet thanks to $349 million from the federal government to cover the cost of converting to a commercial grain company.

The wheat board paid $5.9 million from its pool accounts for restructuring to cover what was deemed to be normal costs, White said.

With the 2011-12 crop year being the last with the single desk, pool accounts were also vetted and audited by Agriculture and Agri-Food Canada. That’s why final payments and the tabling of the annual report were slightly delayed.

“We actually had to clean up the past as well as this last year’s accounts because we had to account for everything that might have been outstanding and rolled forward from previous years,” White said.

Unlike past annual reports, the latest doesn’t break out compensation paid to the CEO, individual senior executives or directors because of changes in accounting practices, White said.

Total “key management personnel compensation” was $9 million in 2011-12 compared to $3.5 million the year previous, the report says.

Most of the money — $5 million — was for “termination benefits.”

Many senior staff were sacked as the wheat board downsized for the open market.

“They were paid their full severance costs… salary adjustments… pension adjustments… and various other things,” he said.

Total board remuneration in 2011-12 was $420,400 compared to $626,482 the year before largely because the number of directors, excluding the president, dropped to four from 14 after legislation ending the single desk passed in December 2011.

allan@fbcpublishing.com

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“I read your blog. I think it’s great,” Greg Meredith, an assistant deputy minister with Agriculture and Agri-Food Canada told Penner during a question period April 2 during the Canada Grains Council’s annual meeting in Winnipeg.

Penner, who farms at Halbstadt, has issued several documents recently advocating western Canadian farmers consolidate their checkoff-funded commodity groups into a single, national farmer-run organization.

Meredith’s message was similar. The federal government needs a strong representative voice from the grains sector giving it direction, he said.

“And I know that there are some cynics who believe that bureaucrats actually love this balkanization so we can pick and choose what opinions we hear and amplify the ones that we like and try to ignore the ones that we don’t,” Meredith said.

“I don’t think we’re strategic enough to actually do that. So it would be much better if we had a dialogue with the sector that allowed us to make choices between grains in terms of investment and within grains.”

With the change to the Canadian Wheat Board monopoly last Aug. 1, who now speaks for wheat?

“Who do we talk to, to understand where we should be investing dollars or where we should be changing policy or what kind of regulatory environment needs to be adjusted to improve the sector’s prospects?” he said.

Meredith said the industry must act fast to capitalize on the opportunities created by rising population and wealth.

Canada’s grain competitors are moving ahead with higher yields and more investment in research and food processing, he said. Meanwhile, in Canada private-sector investment in both has plateaued, he said.

Canada needs to attract investment by having regulations rewarding it.

“I think government private-sector collaboration is going to be quite critical to Canada succeeding in the future space,” Meredith said. “The opportunity is enormous.”

To that end Canada is considering signing UPOV 91 (International Convention for the Protection of New Varieties of Plants), he said. The agreement can be implemented in a way that farmers are allowed to save seed, he added.

“The government is looking actively at these issues and I think the industry is very, very anxious at this particular time to encourage us,” Meredith said later in an interview.

The government is also looking at setting up a system to collect royalties on grain when it’s sold and then investing the money into varietal research, Meredith said.

While the government has also asked the grain industry to review the variety registration system to ensure “that it’s efficient, that it’s transparent and that it rewards breeders with quick approvals (and) quick registrations for new varieties,” Meredith said it’s unclear whether the present system acts as an impediment.

“I’m not sure that it is an impediment and that’s one of the reasons why we want to talk to those in the industry about it. I think we need to balance very carefully the quality assurance dimensions of the variety registration system and what that means to end-use customers and therefore what it means in terms of returns to producers.

“In a post-wheat board world where the wheat board and our own scientists were the dominant players, particularly on the wheat, rye and triticale committee, we’re just asking the members of the committee, ‘is this the best?’”

The current registration system has a lot of flexibility. Changes should be industry driven, reflecting the needs of both farmers and end-users, Meredith said.

Getting farmers and the rest of the grain sector to co-operate should be easier now that the polarized debate over the marketing monopoly is over, Meredith said.

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