The funding will support the development of new spring wheat cultivars. The research dollars will increase field-based breeding activities, the disease nursery and disease screening, molecular marker assisted breeding, winter nursery capacity and end-use quality evaluations.

The CDC will be concentrating on the development of Canadian Western Red Spring (CWRS), Canadian Western Amber Durum (CWAD), and Canadian Prairie Spring Red (CPSR) wheat cultivars with improved yield potentials, and greater resistance to diseases such as fusarium head blight (FHB) and stripe rust, and pests such as the orange wheat blossom midge.

The CWRC is a collaboration of the Saskatchewan Wheat Development Commission, the Alberta Wheat Commission, and the Manitoba Wheat and Barley Growers Association.

“This investment by the CWRC will benefit farmers across the Prairies by developing wheat varieties with improved resistance to pests and diseases along with improved yields,” said Jason Lenz, CWRC board chair and a director with the Alberta Wheat Commission.

“The CDC looks forward to working with the CWRC in developing new wheat genetics for producers in Western Canada,” said Dr. Pierre Hucl, CDC wheat breeder and interim director. “Our 25-year relationship with the Western Grains Research Foundation (WGRF) has been very productive and will provide the momentum to deliver on the ambitious objectives we have developed with the CWRC.”

The agreement with the CDC is the first core breeding agreement to be signed by CWRC. The provincial wheat commissions, through the CWRC, have assumed responsibility for these agreements from the WGRF.

The new agreement represents a significant increase over the previous five-year agreement of $5.4 million. Core breeding agreements are funded proportionally by province, and adjusted annually, based on the previous year’s production, with 53 per cent coming from Saskatchewan, 32 per cent coming from Alberta and 15 per cent from Manitoba for the 2018-19 production year.

Additional agreements with Agriculture and Agri-Food Canada and other public breeding institutions are expected to be signed and announced in 2020.

The post Wheat research coalition inks first major agreement appeared first on Manitoba Co-operator.

That’s the message organizers delivered at the first consultation meeting on two new proposed royalty options in Winnipeg Nov. 16.

“Cereals are necessary in crop rotations to prevent pest and disease pressures from emerging,” a government slide presentation said. “However, due to declining profitability relative to other crop types, acreage for wheat and barley has been declining in favour of other crops — e.g. canola.”

Only eight per cent of the money invested in Canadian cereal variety development is from private companies. The rest comes from tax dollars and farmer contributions.

In contrast private companies cover 90 per cent of the variety development costs for corn, soybeans and canola.

“Private sector activity in cereals research and variety development… has been minimal due to high rates of farm-saved seed,” the presentation said.

Why it matters: Lack of investment has long been blamed for falling wheat acreage but the productivity growth numbers don’t paint a picture of a failing crop.

When farmers save seed they are not paying royalties to breeders. Less money, means fewer new varieties are developed.

Most corn and canola is hybridized, forcing growers to buy new seed every time they plant and earning seed companies more money.

One farmer said a lack of private investment in wheat has resulted in poorer genetics making the crop less profitable for farmers to grow.

But several other farmers challenged that. One said wheat was one of the most profitable crops on his farm, accounting for a third of his seeded acreage.

That farmer also said he sows certified wheat seed every year, paying a $3-a-bushel royalty.

“I don’t mind paying that because of the results I’ve seen on my farm,” he said. “It has driven my profitability.

“I’m willing to pay to play.

“If you love growing wheat like I do… what can it hurt sitting at a table and making a deal (with seed companies)… and saying I am going to get a return, you’re going to get a return. Let’s just make sure we’re both in check.”

Boissevain farmer Mitch Janssens said average canola yields on his farm over the last 20 years jumped 64 per cent, but the percentage increase has been even higher for wheat.

That fits with crop insurance yield data from the Manitoba Agricultural Services Corporation.

Over the most recent 10 years, 2017 to 2008, spring wheat yields for varieties in the top milling quality Canada Western Red Spring class averaged 51.3 bushels an acre, up 28.6 per cent from the 2007-1998 average of 39.9.

During the same time periods canola averaged 37.8 and 30.2 bushels an acre, respectively, for a 25.2 per cent average yield increase.

Statistically both crops have seen yields increase by similar percentages.

Some of it is believed to have come from improved agronomy.

During those two 10-year periods wheat plantings in Manitoba declined 7.5 per cent, while canola jumped 39.6 per cent.

Stonewall farmer Bill Matheson suggested canola is more profitable because there’s more demand for it than wheat.

Garth Patterson, executive director of the Western Grains Research Foundation, made the same point during a panel discussion on attracting more investment to wheat Nov. 23, 2016 during the 3rd Canadian Wheat Symposium in Ottawa.

“The markets aren’t treating wheat as favourably as some of the other crops,” he said, alluding to the impact of supply and demand.

He said a Food and Agriculture Organization (FAO) report on demand for commodities such as corn, vegetable oil and sugar are driven by a growing world population and poor people earning better incomes, but wheat demand is driven only by population growth.

Between 2002 and 2004 world food prices were up an average of 73 per cent. Meat (much of it produced by feeding corn and soybean meal) went up 63 per cent, while vegetable oil and sugar jumped 68 and 215 per cent, respectively. Cereal prices, up 43 per cent, were well below the average, Patterson noted.

Average annual world corn consumption was up three per cent the last five years, but wheat consumption rose 1.8 per cent a year, International Grains Council figures showed. It projected in the next five years corn consumption will see an average increase of 1.8 per cent a year — almost double wheat’s expected one per cent annual rise.

“It makes sense because as people upgrade their diets they usually lower consumption of cereals for the other foods,” Patterson said in an interview Dec. 8, 2016. “The point I was making was, we shouldn’t expect high growth rates in cereal consumption.”

Farmers respond to market signals, Patterson said. They plant what they think will make them the most profit.

But that doesn’t mean investing in wheat innovation is a waste. Increasing wheat productivity through improved varieties and agronomic practices is what farmers need to make growing the crop more profitable, Patterson said.

Canadian Seed Trade Association president Todd Hyra made the same point in response to Matheson’s comments.

Canadian wheat yields have been rising slightly faster than the world average, Agriculture and Agri-Food winter wheat breeder Rob Graf said during that panel discussion two years ago. Between 1991 and 2012 they rose an average of 0.7 per cent a year, even though wheat hasn’t been genetically modified to resist herbicides or insect pests.

In 2016, 95 per cent of the Canada Western Red Spring wheat grown in the West were public varieties.

“From the standpoint of… yield increases, largely from the public sector, I would say we have done a really good job,” Graf said.

On-farm increases were double that due to improved agronomy.

“Long-term, stable, well-funded programs have been an effective strategy… (due to) WGRF (Western Grain Research Foundation) funding… ” Graf added.

Most of the foundation’s money came from farmers through provincial wheat checkoffs.

There are the equivalent of 11 publicly funded wheat breeders in Canada and four with private companies — one breeder for about every two million acres of wheat, Graf said.

“So I would say there is ample room for the private sector,” he added.

“My question would be… how long patience lasts in the private sector if there is no product?

Graf bred wheat for Saskatchewan Wheat Pool until it pulled out after several years.

A Bayer Crop Science official said at that same meeting five years ago Bayer decided to invest $1.9 billion into worldwide wheat over 10 years.

To encourage frank discussion AAFC asked reporters not to name or photograph participants at the royalty consultation. Some, however, later gave the Manitoba Co-operator permission to report what they said.

The post Why is canola winning acres and not wheat? appeared first on Manitoba Co-operator.

That’s hardly surprising, after all, seed is a fundamental building block for any grain farm. It’s also something that’s seen a lot of changes over the past few decades.

Most of the crops that reliably pay the bills are now hybridized, meaning the seed no longer reproduces true, requiring farmers to buy seed season after season.

Those prices have steadily moved upwards too, as seen in the list prices. One local seed company’s 2017 price list featured a number of canola hybrids and suggested prices ranging from just under $13 a pound to $17 a pound, for example. At three pounds an acre that’s between $39 and $51 an acre in seed costs alone.

It’s been enough to spark more than a little complaining about the outrageous price of seed, yet every winter farmers continue to line up to book it. They’re doing so because even at these prices they still see value in this proposition.

Now the federal government is turning its attention to open-pollinated cereals crops. It wants to come up with a system that better rewards seed developers in some way for creating new varieties.

There are some distinctions between the two proposals on the table, but in the end both would require farmers to keep paying a royalty in some form for subsequent seasons, rather than freely saving their seed as they’ve been allowed to for centuries.

Predictably it’s a controversial topic. Nobody likes to pay more for something, and there are more than a few skeptics who wonder if the changes will actually provide the benefits they’re supposed to.

Those are fair questions, and they should be answered. But opponents of the changes also need to acknowledge that even in doing nothing, there could be serious risks to the cereals sector.

If nothing else, this whole discussion demonstrates how people can look at the same set of facts and draw completely different conclusions.

Both sides see just how elusive profitability can be when growing cereals. Opponents of the changes point out that it’s a sector that can’t be expected to bear higher costs. Proponents of the shift point out that the lack of profits is symptomatic of a dearth of research investments that’s seen the crop lag.

Cereals breeding is a compounding thing, and the investments in research need to keep pace with our global competition and ensure Canada’s productivity grows at the same rate. If that doesn’t happen our competitors will inexorably pull away from us, slowly at first, then more quickly as each subsequent season passes.

So far the answer for Canada has been public breeding, and there the nation’s public servants have performed admirably. Western Canadian wheat yield gains due to improved varieties, on average, increased 0.7 per cent a year between 1991 and 2012, according to figures from AAFC. That’s just a bit higher than the global average.

In no small part that was funded through producer checkoff dollars, administered by the Western Grains Research Foundation.

What’s uncertain now is whether or not that track record can continue, especially in light of growing interest — and investment — by the private sector in developing new cereals varieties.

Bayer put US$1.9 billion on the table a few years back as part of a long-term plan to create new wheat varieties.

Here in Canada it’s putting $24 million into wheat development, including a breeding station at Pike Lake, Sask.

Regardless the changes, there should certainly be a continuing role for public researchers in the new cereals model. Here we could probably benefit from looking at the European model.

There, public researchers focus on higher-risk, long-term targets and developing things like new breeding techniques. That both supports the private sector while also supplying farmers with new innovations.

As our Allan Dawson reported last winter, in Germany major companies such as Bayer, Syngenta and Limagrain are working with the public sector through a body known as proWeizen, to develop an efficient hybrid wheat-breeding platform.

It’s the largest pre-competitive wheat project ever conducted in Germany, according to participants.

As the sector has this discussion about seed royalties, it needs to remember that how the system will be structured could well prove to be the most important piece of the puzzle.

Innovation isn’t limited to just scientific breakthroughs in the lab and field plot. It can also refer to how the research system is itself organized.

Taking the time to get the system right will result in a more optimal flow of those scientific innovations out to the field.

That’s a benefit everyone could share.

The post Editorial: Getting it right appeared first on Manitoba Co-operator.

The WGRF said the cluster has been established because Canadian farmers face agronomic challenges that cut across multiple crops, and there are gaps in multi-crop and systems approaches to agronomic research.

The cluster consists of eight research activities ranging from soil health to herbicide resistance and climate change adaptation. It also includes the co-ordination of crop insect and disease monitoring, assessing and managing spray drift, developing a risk model for mitigating fusarium head blight and development and management of productive, resilient and sustainable cropping.

Collaborating research organizations include Agri­culture and Agri-Food Can­ada, Alberta Agriculture and Forestry, Agri-Metrix, Bran­don University, Farming Smarter, InnoTech Alberta, Prairie Agricultural Machinery Institute, Smoky Applied Research and Demonstration Association, University of Alberta, University of Man­itoba, University of Saskatchewan, and Western Applied Research Corporation.

“The $6.3 million announced today by Minister MacAulay, combined with the investment from WGRF ($1.6 million), and other industry partners ($1.1 million) accounts for a total investment in this agronomy research of up to $9 million over the next five years, WGRF Terry Young said in a release. We would like to thank Minister MacAulay and the Government of Canada for their continued partnership and investment in this important area of crop research.”

The other funders include Alberta Pulse Growers, Alberta Wheat Commission, Brewing and Malting Barley Research Institute, Manitoba Canola Growers Association, Manitoba Pulse and Soybean Growers, Manitoba Wheat and Barley Growers Association, Prairie Oat Growers Association, Sask­atch­ewan Canola Develop­ment Commission, Saskatch­ewan Pulse Growers and Saskatch­ewan Wheat Development Commission.

The post AAFC funds Crop Agronomy Cluster appeared first on Manitoba Co-operator.

Either way, Canadian farmers face paying more for new varieties, or when they deliver the crop, if one of two proposed new “value capture” models is implemented by the federal government in 2019.

“We want Canada to continue to have access to innovative (cereal) varieties… so we have the best varieties for our growers, for our processors, for our customers,” Erin Armstrong, Canterra Seeds’ director of industry and regulatory affairs and co-chair of the working group that came up with the models, told the Manitoba Seed Growers’ Association annual meeting at CropConnect in Winnipeg Feb. 14. “That takes investments.

“This is to ensure that public and private, large and small, breeding programs are sustainably financed so they can continue to produce innovative new varieties. And the current system won’t do it.”

The working group, formed under the auspices of Agriculture and Agri-Food Canada’s (AAFC) grains roundtable, was also co-chaired by Tom Steve, general manager of the Alberta Wheat Commission.

Two models

After a year of study the working group put forward two options — end point royalties and contracts, Armstrong said in a telephone interview during a break in a ‘Seed Synergy’ meeting in Winnipeg Feb. 20, where ‘value capture,’ or ‘comprehensive royalty collection system,’ was discussed, as well as other potential seed industry changes.

The options haven’t been fleshed out. That’s something the industry, including farmers, still has to do, Armstrong said, adding she wants farmers to get involved — and quickly — because the federal government plans to consult on seed policy changes this year and implement them in 2019.

An end point royalty system would be collected from farmers when they delivered cereals to an elevator and the money remitted to the breeder of the variety delivered.

Under the contract system farmers would agree when buying certified seed to plant it just once. If they wanted to grow that variety again the farmer would buy more certified seed and pay the royalty again.

Or there could be a ‘trailing royalty,’ where a farmer agrees to pay a royalty on saved seed planted in future years.

Either way farmers would voluntarily give up their historical access to saved seed, which many see as not only a right, but an important way to save money.

“To me it is very concerning,” Lowe Farm farmer Butch Harder said following Armstrong’s address. “It’s a seed tax as far as I am concerned.

“To me once you have an end point royalty it’s like a drug patent — you don’t have to be innovative.

“It’s a very dangerous path and could affect our bottom lines to no end.”

Harder complained farmers would pay twice for variety development — a royalty when buying certified seed and again when cereals are delivered to the elevator.

But MSGA president Ray Askin said double-dipping isn’t allowed. Armstrong also verified that in an interview.

The National Farmers Union (NFU) opposes plant breeders’ rights, arguing farmers are better served by publicly funded variety development.

But MSGA director Eric McLean noted Agriculture and Agri-Food Canada (AAFC) is only contributing $20 million a year to cereals breeding compared to $100 million in the 1970s — a fivefold decrease without accounting for inflation.

“There’s no new money,” he said.

“Several times people from Ag Canada addressed the (working) group and they were very clear that they had no plans to cut investment in R&D, but they said it is simply not realistic to expect that they would simply increase their funding,” Armstrong said in an interview. “And plus, that’s just Ag Canada.”

Private sector investment in cereal breeding is continually growing,” Canadian Seed Trade Association (CSTA) executive director Dave Carey said in an email Feb. 21.

“In 1987 private sector investment in plant breeding was $14.7 million annually,” he wrote. “In 2017, it is estimated that the number will have reached $115 million.”

Cereals impoverished

Canola, corn and soybeans accounted for 89 per cent of private sector investment, based on the 2012 survey, while only eight per cent was invested in cereals research, he wrote, adding he expects it has risen since UPOV ’91 (enhanced plant breeders’ rights legislation) was enacted in Canada in 2015.

How much more revenue will come to private cereal breeders after ‘value capture’ is enacted is being studied, Carey wrote.

The NFU alleges the end game is to kill public plant breeding and turn it over to private companies that will extract what the market will bear for new varieties.

“We cannot let something as important as seeds slip away from us, and end point royalties are one part of making farmers pay for transferring seeds to the private sector,” Colonsay, Sask., farmer and former NFU president Terry Boehm wrote in the NFU’s fall 2017 edition of the Union Farmer. “If we let this happen we will have more varieties that are tied to formulas of chemical dependency, which will, not surprisingly, be supplied by the private variety owners.”

But Armstrong said ‘value capture’ will not apply to varieties released before 2015 and farmers will have choices about whose seed they buy.

The proposed models will benefit public breeders as much as private ones, she said.

One of the tenets of the proposal is to “ensure the public sector continues its current level of investment (in cereal breeding)” as well as ensuring that it doesn’t harm Canada’s pedigreed seed system, or the checkoffs farmers pay to support provincial commodity associations and their research efforts.

There are a lot of problems with end point royalties, according to Boehm, including:

• The funds collected are not directed by the public or farmers.
• They do not necessarily create innovation, but rather reward past developments.
• If a variety is particularly successful and widely used, all the funds flow to one party potentially creating a monopoly.
• Farmers have no control over how much the royalty is.

That has prompted some, including Dauphin farmer Don Dewar, to suggest farmers consider owning cereal breeding rather than relying on major companies.

“Hopefully, you’re paying for what you want, not told what you need,” he told a conference in Saskatoon in 2011.

Relatively small

University of Saskatchewan agricultural economist Richard Gray has calculated private canola-breeding companies invest only about 10 per cent of seed sale revenues in breeding.

And while most farmers appreciate improvements in canola varieties, a common refrain has been not to let wheat seed costs go the way of canola.

However, Dewar also said farmers will have to pay more for cereal varieties if they want to compete with the United States and Australia, which seven years ago spent $50 million and $80 million a year, respectively, on cereal development, compared to Canada’s $20 million, including about $4.5 million from the farmer-controlled Western Grains Research Foundation.

“We need to more than double our investment in (cereal) variety development,” Dewar said.

Armstrong noted the ‘value capture’ options are for cereals only, as canola has a successful system.

That’s in part due to the fact most canola seed is hybrid forcing farmers to buy new seed each year.

Wheat is open pollinated, and as McLean noted, most farmers buy new certified wheat seed every five years and plant saved seed in between.

“If we could divert the resources properly back into the (breeding) programs then we’d be able to fund the program finally much better,” he said.

Hybrids coming

However, hybrid wheat is on the horizon, with trials expected in Manitoba fields by 2020, Canadian Seed Growers’ Association president Kevin Runnals, told the meeting.

The value capture working group has asked AAFC to look at the legalities and economics of its two options, including whether if the industry-wide adoption of a single royalty payment contract would it be deemed anti-competitive.

Meanwhile, the Manitoba Canola Growers Association (MCGA) passed a resolution at its annual meeting Feb. 15 in Winnipeg to oppose end point royalties.

“This is a licence to print money,” mover Butch Harder said.

While such royalties aren’t supposed to apply to canola, Harder said farmers need to prepare.

“If we oppose this motion we are essentially saying we like to be taxed and pay money for the same thing over and over again,” added MCGA director Clayton Harder.

“End point royalties are the same as a bushel tax. When you sell your grain you will have more of your money leaving your pocket.”

Wawanesa farmer and seed grower Simon Ellis opposed the resolution arguing end point royalties are not aimed at canola.

“It’s not a tax, it’s a way for the (cereals) breeder to get remuneration for the work they’ve done on the variety… through private or public plant breeding,” he said.

The post The ‘value capture’ conundrum appeared first on Manitoba Co-operator.

Beginning August 1, 2017, they’ll see checkoffs for the provincial associations combined with the transitional checkoff for funding variety research and market development. Those funds, collected through the temporary Western Canadian Deduction (WCD) checkoff, have since 2012 funded the Western Grains Research Foundation and the Canadian International Grains Institute (Cigi), when they lost funding through the Canadian Wheat Board.

The WCD, which is set to expire July 31, was created to fill the gap left when the federal government ended the Canadian Wheat Board’s single-desk marketing powers. Until then farmers, through the wheat board, helped fund the WGRF, Cigi and the Canadian Malting Barley Technical Centre. It has been running alongside a similar checkoff that funds the provincial wheat groups, and creating a single checkoff has been a long-standing goal of the sector.

• Read more: Looking closer at the wheat checkoff change

Under the single checkoff Manitoba and Saskatchewan wheat farmers will continue to pay $1 a tonne — the same as the two previous wheat levies combined — while Alberta wheat farmers will see their checkoff drop nine cents a tonne to $1.09 following a change proposed by the AWC.

The three provincial wheat groups recently formalized their intentions, signing a memorandum of understanding (MOU) to absorb the responsibilities and financial obligations of the wheat WCD, Jan. 10.

The Alberta Wheat Commission (AWC) passed a resolution at its annual meeting Feb. 1 in Edmonton to absorb the WCD.

SaskWheat passed a similar resolution at its annual meeting Jan. 11. And the Manitoba Wheat and Barley Growers Association (MWBGA) did the same at its annual meeting Feb. 11, 2016.

The three provincial governments are expected to approve the changes in each organization’s checkoff.

“And though they indicated to us they were committed to doing that, it is nice to see everything has been completed in terms of the formal decision to continue funding us (Cigi),” Cigi chief executive officer JoAnne Buth said in an interview Feb. 3. “Their funding is key. It is critical to us.”

The process has gone smoothly, WGRF executive director Garth Patterson said in a separate interview. And although the change means the WGRF will no longer get 30 cents a tonne for wheat breeding, it is committed to funding core wheat variety development until 2020.

“It does give the provincial wheat commissions time to develop its priorities and be in a position to take over those new agreements,” Patterson said.

In the meantime, the WGRF, which has other sources of funding, including a $120-million endowment fund, will continue to fund research on wheat and on crops, he said (see sidebar).

The WGRF will also share its expertise in funding research with the provincial wheat commissions.

Since their creation the three wheat groups have vowed to co-operate to get the most value out of farmers’ money and that hasn’t changed, MWBGA president Fred Greig said in an interview Feb. 2.

“We want farmers to understand this is not a new levy,” he said. “It is just a responsibility change.

“There is a commitment from Alberta, Saskatchewan and Manitoba to keep core funding going to the same level as before for Cigi and the malt barley technical institute.

“Instead of a two-line deduction on their grain ticket there will be one. We don’t see anything drastically changing unless our producers suggest that we should be doing something different. From our AGM and the feedback we have got, producers are supportive with continuing on with research and variety development.”

There is also a barley checkoff under the WCD that is being absorbed by the three provincial barley commissions.

The post Single checkoff coming for wheat growers appeared first on Manitoba Co-operator.

Having a direct role in funding these groups may lead to more farmer input into their governance.

• Read more: Single checkoff coming for wheat growers

Changes are coming to how Cigi is governed, Cigi CEO JoAnne Buth said. While it was too soon to comment, last week she said the direction could be clearer by the time Cigi holds its annual meeting in June.

Presumably, a new Cigi board of directors will include members from the three provincial wheat commissions given that they represent the farmers who are Cigi’s largest funders.

The current eight-person board includes chair Murdoch MacKay, the now-former assistant chief commissioner of the Canadian Grain Commission, two grain industry representatives, four farmers — one each from Manitoba, Saskatchewan, Alberta and Ontario — and Buth.

In 2015-16 wheat farmers contributed about a third of Cigi’s $10.4-million budget and the federal government contributed just slightly less, Cigi’s annual report shows. The rest came from a variety of sources including consulting, customized training and support, applied research projects, course fees and a small amount from the grain industry.

Farmer contributions are important because the federal government has contributed 75 cents for each $1 from farmers. However, on April 1, the government’s contribution will drop to 50 cents, to make it consistent with how it shares costs with other groups under its agro-marketing program, Buth said.

“We are looking at a variety of different options for funding going forward,” she said. “And clearly we are continuing to talk to the government as well because that is important for us.”

Asked if Cigi will seek funding from grain companies Buth replied: “It is just a little bit too early for me to talk about it.”

Arguably Cigi’s work helps Canada’s entire grain sector. But measuring and capturing that value is difficult, which raises questions about how much, if any, grain companies might contribute, underscoring the value of farmer funding.

“I really have to give credit to the growers for taking this on and having those discussions and for continuing to support us,” Buth said. “Clearly nothing talks like a cheque and to have them support us this way. It is very heartening to us that we are providing value to the industry and a big thank you to them.”

The WGRF will continue to fund wheat and other crop research, even though the money collected from the wheat and barley checkoffs will be collected and administered by the provincial wheat and barley commissions, WGRF executive director Garth Patterson said.

“The (WGRF) board just approved a four-year management plan out to 2020,” Patterson said. “We anticipate maintaining our resources to 2020. After that it will depend on the research we are funding and the partnerships that we have.

“What we are looking at for the next four years are budgets that are relatively similar (to the recent past). We will still continue to have $18 million to $19 million funding annually.”

There is a spirit of co-operation between the WGRF and the commissions, Patterson said, with the farmers’ groups in the driver’s seat.

“We are prepared to collaborate, but they will determine how they want to move forward,” he said.

The post Looking closer at the wheat checkoff change appeared first on Manitoba Co-operator.

That was the consensus among panellists discussing wheat breeding at the 3rd Canadian Wheat Symposium here Nov. 23.

“My observation would be that ultimately farmers are going to be paying for this one way or another,” Garth Patterson, executive director of the Western Grains Research Foundation (WGRF) said.

Farmers will pay if it makes sense, said Henry Van Ankum, a farmer from Almonte, Ont., and a director of the Grain Farmers of Ontario.

“The way I view it is you have to spend money to make money,” he said. “We’ve got to attract investment. Sometimes that investment needs a return.

“We’re going to have to pay our share of it along the way.”

Declining importance

Wheat is important. It’s the most widely grown and traded crop globally, Patterson said. And it accounts for around eight per cent of Canadian farmers’ cash receipts, or almost $3.8 billion a year, said Rob Graf, a winter wheat breeder with Agriculture and Agri-Food Canada based in Lethbridge, Alta.

But wheat’s popularity is declining because other crops earn farmers more.

This year western Canadian farmers harvested 21.9 million acres of wheat — the lowest in five years, Statistics Canada said in its November production report.

Farmers want private investment in wheat like in corn and soybeans, said Jim Anderson, a wheat breeder at the University of Minnesota.

“They are very pro-technology,” he said. “But at the same time they want a very strong public sector. They want an alternative to the companies. The thing that I hear a lot of is, ‘Jim, we don’t want wheat to go the same way as soybean.’”

The same is heard among Canadian canola farmers.

Soybeans are pushing wheat out of rotations, said Marcus Weidler, head of Seeds Canada for Bayer CropScience.

“There must be a reason why soybeans are more attractive,” he said.

It’s not just a lack of technology in wheat. Demand for corn and soybeans is growing for demographic and economic reasons, Patterson noted.

• Read more: Wheat acreage decline connected to demographics, economics

Wheat hasn’t been genetically modified to resist herbicides or insect pests. But western Canadian wheat yield gains due to improved varieties, on average, increased 0.7 per cent a year between 1991 and 2012, Graf said. Those gains were “somewhat higher than the global average.”

In 2016, 95 per cent of the Canada Western Red Spring wheat grown in the West were public varieties.

“From the standpoint of yield increases, largely from the public sector, I would say we have done a really good job,” Graf said.

On-farm increases were double that, due to improved agronomy.

“Long-term, stable, well-funded programs have been an effective strategy (due to) WGRF funding,” he said.

Most of it came from farmers through provincial wheat checkoffs.

There are the equivalent of 11 publicly funded wheat breeders in Canada and four with private companies — one breeder for about every two million acres of wheat.

“So I would say there is ample room for the private sector,” Graf said.

“My question would be how long patience lasts in the private sector if there is no product?

Graf bred wheat for Saskatchewan Wheat Pool until it pulled out after several years.

Weidler didn’t respond directly, but noted that five years ago Bayer decided to invest $1.9 billion into wheat over 10 years.

Bayer is investing $24 million in Canadian wheat development, including its breeding station at Pike Lake, Sask.

Public wheat breeding in Canada is pertinent, Graf said.

“Public sector cultivars have been very popular and public sector wheat-breeding activities are currently vital to the industry. I don’t think anyone could say that we really could do without them.”

Public wheats dominate the U.S. market too, Anderson said.

In Europe, however, it’s the opposite, Weidler said. Public researchers focus on pre-breeding such as developing new breeding techniques and focusing on high-risk, longer-term targets, thereby supporting both the private sector on the breeding side but also supplying farmers with new innovations.

In Germany major companies such as Bayer, Syngenta and Limagrain are working with the public sector through a body known as proWeizen, to develop an efficient hybrid wheat-breeding platform.

“It is the largest pre-competitive wheat project ever conducted in Germany,” Weidler said.

Once developed through this model, the private companies will adopt advances and then compete, he said.

Five million euros invested by the public is being matched by the companies.

“I think that is one solution to think about — how we can split the work between the private and public sector,” Weidler said.

Wheat breeding in Australia went 100 per cent private after the introduction of end-point royalties paid by farmers, Weidler said. However, public researchers are spending the same amount of money just on pre-breeding as they did 10 years ago on pre-breeding and variety development.

“I am getting a little bit nervous with how fragmented the situation is here in Canada,” Weidler said later in an interview. “Everybody is trying to do a little bit, but there is very little co-ordination on what needs to be done. So I wonder how long can Canadian wheat be competitive in the global market.”

Wheat agronomy, which has the potential to match yield increases from genetic improvements, also needs more investment, he added.

Farmers will ultimately decide if there’s enough incentive for public and private wheat breeders to continue in Canada, Weidler said.

But the discussion regarding research won’t matter if the public doesn’t accept the benefits of modern agriculture, Weidler said.

“Everything I’ve said so far is like rearranging deck chairs on the Titanic…” he said, adding that agriculture is heading for an iceberg “and the iceberg is public perception,” in that new agricultural technology is suspect.

Private companies are getting more involved in wheat breeding in the U.S., by partnering with universities, Anderson said.

“The growers realize they have a pretty good deal with the public varieties because the seed is cheaper,” he said.

What farmers pay through state wheat checkoffs is probably one-tenth of what they’d pay for wheats developed by private companies, he said.

“So they are getting a good bang for their buck I think.”

Canadian farmers also want low seed costs, but also to attract company investment. It means balancing farmer and corporate interests.

Last year JRG Consulting Group, at the request of provincial wheat and barley commissions and associations, explored five options ranging from the status quo with more co-ordination, to a farmer-owned wheat development company.

The consultants prefer a model that would create a non-profit producer body called Wheat and Barley West.

It allows for economies of scale and a consolidated farmer voice accommodating larger and/or more focused strategic investments in variety development, the report said. It’s less risky for farmers, than starting a farmer-owned seed company. It also puts farmers in position to gear up should the federal government, which currently produces and pays for most new cereal varieties, decides to cut back.

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But there are other factors at play, says Garth Patterson, executive director of the Western Grains Research Foundation.

“The markets aren’t treating wheat as favourably as some of the other crops,” he said Nov. 23 during a panel discussion on public and private wheat breeding at the 3rd Canadian Wheat Symposium. “And the issue is attracting investment so we have to work together (as public and private wheat breeders).”

A Food and Agriculture Organization (FAO) report says demand for commodities such as corn, vegetable oil and sugar are driven by a growing world population and poor people earning better incomes, but wheat demand is driven only by population growth, he said.

World food prices were up an average of 73 per cent between the base years of 2002 and 2004 and 2016, the FAO said. Meat (much of it produced by feeding corn and soybean meal) went up 63 per cent, while vegetable oil and sugar jumped 68 and 215 per cent, respectively. Cereal prices, up 43 per cent, were well below the average, Patterson noted.

Average annual world corn consumption was up three per cent the last five years, but wheat consumption, rose 1.8 per cent a year, International Grains Council figures show. It projects in the next five years corn consumption will see an average increase of 1.8 per cent a year — almost double wheat’s expected one per cent annual rise.

“It makes sense because as people upgrade their diets they usually lower consumption of cereals for the other foods,” Patterson said in an interview Dec. 8. “The point I was making was, we shouldn’t expect high growth rates in cereal consumption.”

Farmers respond to market signals, Patterson said, which is to say they plant what they think will make them the most profit.

Based on the data, Patterson said he doesn’t expect a big jump in wheat acres, unless a crop failure somewhere results in higher prices.

But that doesn’t mean investing in wheat innovation is a waste. Increasing wheat productivity through improved varieties and agronomic practices is what farmers need to make growing the crop more profitable, Patterson said.

“That would still keep wheat in the rotation,” he said. “To be sustainable we need cereals in the rotation.”

And while private companies might make more selling the seed of higher-value crops, wheat remains the most widely grown crop in the world.

“That is still a lot of acres for a market, but it is a lower-value market compared to what you see for corn, soy, cotton and canola,” Patterson said.

Western Canadian farmers harvested 21.9 million acres of wheat this year — the lowest in five years, Statistics Canada said in its November production report.

Wheat acreage the previous five years averaged 22.2 million, down eight per cent from the previous 10-year average of 24 million.

The decline in wheat acreage isn’t isolated to Western Canada.

“(In 2012 Hans Braun, CIMMYT’s director of global wheat program observed that maize, soybeans and cotton were pushing wheat globally into marginal production areas, which lowers the yield potential,” Patterson said. “He concluded that partnerships — public-private — were the key to increased research in wheat.”

The WGRF, which administers money collected from farmers to invest in research, has been partnering with the private sector for years, he added.

Annual wheat yield increases aren’t keeping pace with population growth, Marcus Weidler, head of Seeds Canada for Bayer CropScience, said later in an interview. That and the drop in wheat acres means breeders need to boost yields even more, he added.

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The agency said Dec. 22 it has determined Canadian Pacific Railway (CP) and Canadian National Railway (CN) went over their maximum revenue entitlements (MREs) for Prairie grain by $3,386,483 and $1,041,913 respectively during the 2015-16 crop year.

The two railways’ respective MREs for 2015-16 had been set at $677,879,839 and $684,749,693.

CP and CN now have 30 days to pay their overages to the WGRF, which has been the mandated beneficiary for such payments under the Canada Transportation Act since 2000. The railways also must pay five per cent penalties of $169,324 and $52,096 respectively, the CTA said.

CN’s overage for 2015-16 is its third in a row, after it topped its MREs by 0.9 and 0.7 per cent in 2014-15 and 2013-14 respectively. CP’s grain revenue came in 0.3 per cent over its MRE in 2014-15, and 0.3 per cent below its MRE in 2013-14.

The two railways together moved 40,393,402 tonnes of Prairie grain in 2015-16, down 2.2 per cent from their total volume in 2014-15, the CTA said. Their combined average length of haul in 2015-16 was 951 miles, up four from the previous crop year.

CN’s Prairie grain handle in 2015-16 came in at 19,784,579 tonnes, with an average haul of 1,015 miles. CP’s handle in the same crop year was 20,608,823 tonnes, with an average haul of 890 miles.

The annual MREs for CN and CP are calculated each year using a formula based on total grain tonnage and average length of haul as well as the Volume-related Composite Price Index (VRCPI).

The VRCPI is an inflation index accounting for forecast changes in the two railways’ costs for labour, fuel, material and capital purchases.

The agency said in April 2015 it would trim the VRCPI for 2015-16 by 5.6 per cent, to 1.2517, based in part on a sharper-than-expected drop in fuel costs.

Specifically, the CTA said at the time, it had “over-forecasted” the expected change in the railways’ fuel costs for 2014-15, based on “third-party” outlooks for crude oil prices and the value of the Canadian dollar.

In April 2016, however, the CTA bumped up the 2015-16 VRCPI by 0.8 per cent, to 1.2668, after CN sought an adjustment.

CN had applied for the change earlier that month, the agency said at the time, based on a company commitment to obtain over 1,700 hopper cars from its U.S. subsidiaries.

Those U.S. cars, CN said at the time, were to be pressed into regulated grain service as replacements for withdrawn federally-owned hopper cars in Canada. — AGCanada.com Network

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