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No More CGC Country Service

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“Nobody has done that analysis. The minister himself told me they haven’t done it in their department, which is kind of strange.”

The Canadian Grain Commission (CGC) will stop grading grain at Western Canadian country elevators, even if it’s being exported directly to the United States, starting Aug. 1, 2009.

Critics say it fits with the federal government’s proposed amendments to the Canada Grain Act, C-13, introduced in the House of Commons Feb. 24. They say it will weaken the CGC’s role in protecting the quality of Canadian grain oilseeds and safeguarding farmers’ interests against those of grain companies.

If C-13 becomes law, grain buyers won’t have to post security to cover the money they owe farmers and the CGC will drop inward grain inspection at export terminals, although the service will be available through private grain inspectors for a fee.

Bill C-13 is much the same as C-39, which died on the order paper when the last election was called.

CGC chief commissioner Elwin Hermanson recently notified the Canadian Wheat Board (CWB), Western Grain Elevator Association (WGEA) and Inland Terminal Association of Canada (ITAC) in a Feb. 17 letter that “on-site” inspection is ending.

“This means that the CGC will no longer provide official grading and weighing on grain shipments from the Prairies to terminal facilities, nor for export shipments to the United States or domestic mills,” Hermanson wrote. “However, the CGC will continue to provide services on a submitted sample basis and will evaluate the potential for delivery of analytical testing at service centres.”

The CGC is closing service centres in Brandon, Melville and Moose Jaw and “services will be restructured in the Winnipeg, Calgary, Weyburn and Saskatoon service centres.”

CGC spokesman Remi Gosselin said the CGC’s mandate to ensure grain quality will not be eroded.

Ending elevator inspection is in keeping with the federal objective of aligning the CGC more directly to its mandate under the Canada Grain Act, He said.

Optional inspection services at country elevators began in the early 1990s after the North American Free Trade Agreement opened the U. S. to Canadian wheat and barley exports. Traditionally the CGC issues a ‘Certificate Final’ on exports of western Canadian grain guaranteeing grades to end-users. However, direct exports to the U. S. were exempted several years ago.

According to Gosselin, the CGC now inspects only 1 per cent of the grain shipped directly from the Prairies to the U. S.

“The rest is done by either third party service providers or from company-to-company,” he said.

Not having on-site CGC inspection at Prairie elevators won’t have a big impact on the CWB, said spokesperson Maureen Fitzhenry. The WGEA and the ITAC said they were still assessing the change.

The National Farmers Union (NFU) opposes the changes.

“We’re supposed to unlearn all the lessons from the past 100 years and what led us to the creation of the Canadian Grain Commission in the first place – the complete dominance of grain companies over individual farmers – the manipulation of the system by grain companies for their own advantage and to the disadvantage of farmers.”

Security provision concerns

Dropping security provisions designed to protect farmers makes dealing with smaller buyers riskier and only helps big firms, Wells said.

Manitoba’s Keystone Agricultural Producers (KAP) wants the current rules to remain until a better alternative is available.

“Nobody has done that analysis,” KAP president Ian Wishart said. “The minister (of agriculture Gerry Ritz) himself told me they haven’t done it in their department, which is kind of strange.”

The CGC estimates security now costs grain companies and the CGC around $5 million a year, which is ultimately passed back to farmers. Still, when spread over millions of tonnes of grain deliveries, the cost is pennies a bushel and probably cheaper than the private insurance and clearinghouse options being considered to replace it.

WGEA executive director Wade Sobkowich said ending security removes unnecessary costs.

The WGEA wanted CGC inward inspection made optional. C-13 makes it an option, but only through a non-GCG inspector, so the WGEA is reconsidering its position.

The Conservative government says C-13 and changes to the CGC will modernize the grain industry and make it more efficient. But some worry the CGC will lose its grain service ‘chops’ by doing so much less of it. There are no grain inspecting schools and most private grain inspectors learned the business from working at the CGC.

“There needs to remain in the system some sort of standard, industry-wide certifying agency for companies that will be providing inspection services to ensure that consistency and that level of expertise is at a certain level,” Sobkowich said. [email protected]

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