The Western Canadian Wheat Growers Association welcome the move towards grain grades based on specification and the start of a broad review to determine the relevance of the Canadian Grain Commission (CGC).
Grain grades moving away from the current subjective grading system to an objective specification based system would add transparency for farmers. Farmers would benefit from a more honest grading system as they would be paid for the true value of their grain.
“It’s been over five years since the CWB monopoly ended. Farmers, grain companies, end users and the entire supply chain have had ample time to adjust and grain grading reforms should be in place by next crop year,” said Wheat Growers Chair Jim Wickett.
With the removal of the CWB monopoly, prairie provinces have seen a flurry of new primary elevators. These new delivery locations for farmers have resulted in increased competitive buying and any potential costs from a new grading system should be absorbed through operational efficiencies. A more transparent grading system would help grain companies gain a greater understanding of the grain in their primary elevators all the way through to port, ultimately benefiting their sales position.
“We should let market forces work,” said Daryl Fransoo, Wheat Growers Director near Glaslyn and Sask Wheat nominee. “If the eventual grain buyer is paying based on specifications, why shouldn’t farmers get paid based on the same specifications?”
The Wheat Growers also advocates for more transparent outward inspection. CGC outward inspection should be voluntary, ensuing costs are reflective of the actual cost of inspection at port. Currently, the CGC has a mandatory government mandate to inspect all export sales and provide a CGC grade, even when it is not required for the sale.
“It’s like farmers are paying for an extra set of referees at port, and the players don’t even pay any attention to them,” said Fransoo. “Farmers shouldn’t have to pay double outward inspection if it’s not needed by the exporter or buyer.”
Farmers lose millions of dollars every year to pay government CGC inspectors to inspect grain and provide grades for no reason. Many foreign buyers simply throw out CGC inspection certificates and pay for private inspections that tailor to their specific needs.
The Wheat Growers believe the new commissioners at the CGC are on the right track with these reforms.
“The next few months will be critical in explaining the importance of new grain grades based on specifications and the benefits of voluntary CGC outward inspection,” said Wickett.
Source : Western Canadian Wheat Growers Association