Cigi, Cereals Canada agree to pursue amalgamation

Cigi staff evaluate wheat flour for use in oriental noodles. (Cigi photo)

The boards of the Canadian International Grains Institute (Cigi) and Cereals Canada have agreed to pursue amalgamation by March 31, 2020.

That’s if a proposal, yet to be developed, is approved by the two bodies’ member organizations, leaders Dean Dias and Cam Dahl, said Friday in separate interviews.

“During the past week, both boards have met and agreed to sign a letter of intent to pursue amalgamation,” Cereals Canada said in a statement Friday on its website.

“The management teams of Cereals Canada and Cigi are charged with the development of a comprehensive governance structure that will be presented to both boards for approval and to allow the boards to bring forward recommendations to the respective member organizations. Any amalgamation proposal will be subject to approval by votes of the member organizations of both Cigi and Cereals Canada.”

Cigi was created in 1972 to provide market development and technical support for Canadian wheat and other field crops.

Cereals Canada is a not-for-profit cereals value chain organization created in 2013 to take on some of the market promotion and cereal industry issues once done by the Canadian Wheat Board before its demise Aug. 1, 2012.

Why it matters: Cigi, in its 45 years of operation, is credited with boosting Canadian grain exports and market share by training foreign millers and bakers to get the most from Canadian crops. The proposed merger raised questions about Cigi’s effectiveness if it’s not a stand-alone institution as well as its mandate and funding.

Maintaining Cigi’s ‘brand,’ which is credited with boosting Canada’s reputation for producing high-quality milling wheat, is a top priority, said Dean Dias, Cigi’s interim CEO, and Cam Dahl, Cereals Canada president.

“The Cigi brand is important for the industry and it is something customers around the world recognize and we need to maintain that,” Dias said. “They’ve tasked Cam and I to work on something when we look at an organizational structure. There’s a pretty strong intent that the Cigi brand should stay.”

Dias said Cigi has become the “face” of the Canadian brand for customers visiting Canada, as the organization has long been the first point of contact.

“If you talk to somebody from a different country asking, ‘Do you buy Canadian wheat?’ They’ll say, ‘Yes, I’ve been to Winnipeg, I’ve been to Cigi.’ That’s the first thing they’ll tell you,” Dias said.

The decision to pursue amalgamation comes 13 months after the Manitoba Co-operator broke the news that merger talks were underway.

There are lots of reasons to merge, Dahl said. Both organizations promote Canadian wheat sales, they share many of the same members, including the three Prairie wheat commissions and some of the same grain companies. Merging will save money, improve communications and help focus market preservation and development efforts, he said.

“There is a real benefit, whether it’s on crop inputs, or if it’s on research focus, or new varieties, in having everyone in the value chain around the table so you are able to walk in the other guy’s shoes a little bit,” Dahl said.

Nine months isn’t much time to develop a plan and get it approved by Cigi and Cereal Canada members, especially if the commission wants to get farmers to vote on at their annual meetings.

“March 31, 2020 is the goal (for merging),” Dahl said. “Yes, it is an optimistic time frame, but I wouldn’t say things are necessarily chiselled in stone.

“We have been talking about if for some time and I think we can accomplish that goal.”

The Manitoba Wheat and Barley Growers Association, which belongs to both Cigi and Cereals Canada, is to discuss at an upcoming board meeting whether the question will be put to members as a whole, or just to the board of directors, general manager Pam de Rocquigny said in an interview Friday.

SaskWheat hadn’t discussed its review process yet, general manager Harvey Brooks said in an email.

At the Alberta Wheat Commission, a decision on the merger will be made by the organization’s board, general manager Tom Steve said.

Cigi’s membership consists of farmers through their respective wheat commissions and a number of grain companies, that each contribute around $2.75 million each.

The federal government kicks in around $2 million, or 27 per cent of the total $7.5-million budget.

Dahl said he has no reason to believe Ottawa will not continue Cigi funding if it merges with Cereals Canada.

Cereals Canada has farmer-members in Atlantic Canada, Quebec, Ontario and Quebec. Questions around whether Cigi’s mandate might change to reflect pan-Canadian grain production versus a focus on western wheat, as well as funding for Cigi’s work, have yet to be answered, Dahl said.

“That will be part of the process, of course — to go through some strategic planning with all the potential members of the new organization, but we’re just not quite there yet,” Dahl said.

Whether Cereals Canada remains the name of the merger organizations and whether the Cigi name will continue in some way hasn’t been discussed, he said.

The goal, if there is a merger, is for both organizations to be in the same building.

“Those are the kind of details that are down the road, but yes, we would be located together,” Dahl said.

“It’s probably easier for us (Cereals Canada) to move than for Cigi to move.”

Cigi, which has a small flour mill, bakery and noodle- and pasta-making equipment, is in the Canadian Grain Commission building in downtown Winnipeg.

Cereals Canada is nearby, in the Grain Exchange building.

— Allan Dawson is a reporter with the Manitoba Co-operator at Miami, Man. Follow him at @allanreporter on Twitter.

Cigi, Cereals Canada merger principles

Cigi and Cereals Canada have identified the following “key principles” as part of their proposal to amalgamate. The new organization would:

  • Be national in scope — Members are Canadian entities with investment in the Canadian grain business — development, handling, exporting and processing.
  • Represent the pillars of the Canadian value chain — growers, life science/ seed, handlers/exporters, processors.
  • Have representation on the board based on membership dues. Pillars/members that pay more would have greater representation on the board.
  • Separate participation on the board from participation in the activities of the organization. The board would be responsible for the strategic direction and annual approval of the activities and budget of the organization. All members, whether or not they are directly represented on the board, would have the opportunity to participate in the priority setting and feedback on activities of the organization at the annual general meeting and on standing and ad hoc committees, for example.
  • Strive for consensus decision-making at both the board and member level. Clear consultative processes will be established to help reach consensus. A clear process that would allow for member dissent would be established for rare cases where consensus is not possible. – A.D.
cam dahl
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