During the federal government’s consultations for the Canada Grain Act review, farmers were surprised to learn that the majority of the CGC’s operating costs are covered by revenues from mandatory inspection fees of export vessels of grain. Those inspection costs are passed onto farmers through lower grain prices, as the CGC’s regulatory costs are hidden in the grain basis.

“Mandatory outward weighing and inspection by the CGC is a redundant service since 70 to 80 percent of grain contracts require a second inspection by a private, third-party company. Private companies can offer this service cheaper than the CGC, yet the CGC continues to offer this duplicated service,”

says Tara Sawyer, Alberta Barley chair.

The CGC has accumulated a $148 million surplus, which will continue to grow due to the large volume of grain being moved in the current crop year. The CGC needs to adjust its funding model to expect variation and adopt a model that will allow excess funds to be returned to farmers through reduced operating fees.

“As part of the Canada Grain Act review, we identified that the landscape of international grain trade has changed and Canadian farmers need the CGC to adapt as well. It’s time for the CGC to transition away from being a service provider as their high cost of inspections is affecting our competitiveness,”

says Todd Hames, Alberta Wheat Commission chair.

Source: Alberta Wheat and Barley

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In their submission, the commissions say the review is an opportunity for the Government of Canada to redefine the functions and responsibilities of the CGC.

“We believe the current hybrid role of the CGC, as both a regulator and service provider, is no longer the best use of resources or in farmers’ best interests. The market for testing services is mature and efficient, and it is no longer necessary for the government to provide these services,”

says Todd Hames, Alberta Wheat Commission chair.

“These recommendations recognize that the growing amount of technical testing throughout the grain value chain will require an expansion of the CGC’s regulatory and enforcement role to ensure farmers’ grain is graded consistently. We are also calling for greater transparency in the cost of the regulatory system to farmers,”

says Tara Sawyer, Alberta Barley chair.

Among the key recommendations are:

• Eliminate the provision of mandatory services by the CGC, including outward weighing and inspection of outgoing grain vessels. The CGC would instead accredit third parties to test and inspect grain exports on a competitive basis in line with customer demand. Approximately 80% of export shipments are currently double inspected due to the requirement for a CGC inspection, plus contractual obligations for a third-party inspection. These additional costs are passed onto farmers through lower grain prices.

• The direct costs of regulation by the CGC must no longer be hidden in the grain basis and should be shown as a fee on producers’ grain sales for increased transparency. The fee calculation should be adjusted annually to maximize the use of surplus funds from the previous year.

• CGC functions provided for the good of all Canadians such as the Grain Research Laboratory must be fully funded by Canadian taxpayers.

• The CGC must expand its role in regulating and enforcing grading methods and procedures for domestic transactions of grain wherever CGC standards are used for quality assessment.

• The producers’ right to dispute grading results, subject to the CGC inspector’s assessment must be expanded to include assessment of non-grade requirements (i.e. Falling Number and DON), and the right to dispute grading results must be available to a producer for a window of five business days from the date of a grain delivery.

Other recommendations include empowering the CGC to provide more timely dissemination of information on grain exports.

The commissions also support a review of the Western Wheat Classification system by the CGC. There are currently 10 western classes of wheat with four classes comprising 95% of production.

Source: Alberta Wheat and Barley Commission

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Smith is serving his fourth term in Congress and is a member of the House Ways and Means Committee. He has received the prestigious Friend of Farm Bureau Award from the American Farm Bureau Federation for each of his three completed terms.

Jinks Wynn, chairman of the Southeast Regional Endorsement Committee, said:

“Congressman Smith has been an unwavering friend of Missouri’s farmers and ranchers. As a farmer himself, he understands the needs of our members and all rural Missourians. We appreciate his work in Congress and look forward to electing him to a fifth term.”

Trustees are selected by their county Farm Bureau organizations. They interview candidates, review voting records and seek their positions on issues prior to voting on endorsements. This is the fifth consecutive election in which Missouri Farm Bureau has endorsed Smith.

Source: Missouri Farm Bureau

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In many cases, the legally binding declaration required by the CGC is included as Part B of the annual contractual declaration required by grain companies to ensure farmers’ grain is eligible for delivery. While most grain deliveries have required similar declarations in the past, as of August 1 2020 all regulated grains that are delivered to CGC licensed elevators or processors require a declaration.

The changes require farmers to declare that grain being delivered is of a variety eligible for the kind of grain and class, and are the result of recent amendments to the Canada Grain Act. Farmers should be aware that this addition has implications beyond the current contractual agreements between farmers and grain companies. The change extends to all deliveries of grains regulated under the Canada Grain Act, and knowingly making a false declaration is considered an offence under the Act.

Changes follow concessions made under the Canada-United States-Mexico Agreement (CUSMA) that allow US farmers to sell eligible classes and varieties of wheat into Canada. Rather than introducing a regulatory contract specific to the sale of wheat, the CGC has extended the regulations to cover all grain sales.

Quotes:

“This change adds an additional level of liability that farmers need to be aware of. Grain declarations have always been contractual agreements between the farmer and the grain company, but now we have a regulatory requirement that could result in legal ramifications.”

Todd Hames, Alberta Wheat Commission Chair

“It’s important for canola growers to know that the declaration now applies to sales made to canola crushers.”

John Guelly, Alberta Canola Chair

“We would always encourage farmers to be aware of what they’re signing in any grain contract, but with a new, legally binding agreement now included, farmers should take extra care in reviewing before signing.”

Dave Bishop, Alberta Barley Chair.

“Farmers who deliver pulse crops should be aware of the new process as pulses are included as regulated grains under the act and you will be required to sign the declaration.”

Don Shepert, APG Chair

Source: Alberta Barley

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