Consultations sought on grading U.S. wheat imports

Grain industry consultations are needed before the Canada Grain Act is amended to allow imported U.S. wheat to receive a Canadian Grain Commission (CGC) grade, the Saskatchewan Wheat Development Commssion says.

“(W)e need to have public consultations to figure out the consequences of adding more American grain to our system,” Sask Wheat chair Bill Gehl said in a news release June 5. “I think producers need to know what the ramifications to our shipping agreements would be and how American grain will fit under the MRE (maximum revenue entitlement).”

The U.S. government and U.S. Wheat Associates, which represents U.S. wheat farmers, say Canada’s wheat grading system is a non-tariff trade barrier because it  discriminates against U.S. wheat.

The Western Canadian Wheat Growers Association (WCWGA) and Cereals Canada agree and have been asking the Canadian government to amend the Canada Grain Act so wheat grown in the U.S. and sold in Canada is eligible for a CGC trade, so long as the variety is registered to be grown in Canada.

Both groups worry without a change the Trump administration, already a critic of the North American Free Trade Agreement (NAFTA), will try to block imports of Canadian wheat. The U.S. is an important market for Canadian wheat.

Currently under the Act, unregistered wheat delivered to a CGC licensed grain elevator is only eligible for the lowest grade in the intended wheat class, whether it was grown in Canada or the U.S.

This spring Montana Democratic Senator John Tester moved a resolution stating Canada should grade Canadian and U.S. wheat the same way and that the president should examine whether Canada’s grading laws adhere to trade agreements and “insist on full access for United States exporters of wheat to the Canadian market.”

“We should be changing the Act to allow that to happen,” Cereals Canada president Cam Dahl said in an interview April 27.

The CGC and federal government say U.S. wheat can legally be delivered and sold in Canada to willing buyers based on specifications.

“There’s nothing in the current (Canadian) grain-handling system that prevents U.S. producers from entering into contracts with grain-handling companies or processors located in Canada to get a fair price for the quality of the product being delivered on the basis of specs,” CGC spokesman Remi Gosselin said April 26 in an interview.

The WCWGA and Cereals Canada agree, but say since the U.S. see this as a trade irritant, it needs to be addressed to protect Canadian wheat exports to the U.S.

The previous government had planned to do just that, but twice, the changes, along with other amendments to the Act, didn’t make it through the legislative process.

Sask Wheat said the Canadian government needs to “protect the interests of Canadian grain producers and the integrity of the Canadian grain system.”

Any changes to the Act must ensure the quality of Canadian wheat for end-users, Sask Wheat said.

Canadian wheat has a reputation for high quality and consistency. Canada’s registration system, which requires new wheat varieties be tested to ensure they meet the quality standards of the intended class, and the CGC’s grading system, are part of Canada’s wheat quality control system and supported by Sask Wheat.

“Before we make any legislative changes, we should know how this will impact Canadian producers and our relationship with our top export markets,” Gehl said.

“Also, would allowing more American grain create the potential for railways to use American grain over Canadian to achieve volumes? There are a lot of important questions that need to be addressed. We need to resist the pressure from the United States and do what is right for Canadian grain farmers.”

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

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