Private-sector investment needed in wheat research

PRIVATE An agricultural economist says farmers must accept higher 
cereal seed prices if wheat research is to attract private investment

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Wheat research in Canada needs a game-changing development or the crop will become a poor cousin to corn and canola, says Murray Fulton of the University of Saskatchewan.

“We need a drastic change in wheat research,” Fulton, chairman at the Johnson-Shoyama Graduate School, told a conference organized by the Canadian Agriculture Economic Society.

Wheat yields have fallen well behind those of the other two crops and is at risk of becoming a marginal crop because government research funding has declined and life science companies have invested in corn and canola, he said. New ways must be found to spur private support for wheat research because of the time and expense required to bring new varieties to the market.

Fulton said farmers must accept higher seed prices to encourage breeders to invest in expanded wheat research. While governments need to partner with life science companies to encourage additional research, “what we really need are bold policy moves to educate producers. They could gain many new varieties.”

Fulton was one of three speakers on the topic of the grain economy in an open market environment. Earl Geddes, executive director of the Canadian International Grain Institute, said western farmers are seeing a shift in varietal demand from buyers.

“We won’t know for a couple of years whether farmers will make more money without the Canadian Wheat Board monopoly, but they can certainly diversify their crops to respond to market demand,” he added.

The growing world population will bring more attention to the need for food security, he said. Canada can play a role in that if it produces innovative products that meet the food requirements of countries like China and India.

Jean-Marc Ruest, vice-president of corporate affairs and commercial litigation with Richardson International Ltd., said that in addition to the end of the CWB monopoly, Prairie agriculture is adjusting to the overhaul of the Canadian Grain Commission and proposed railway service legislation.

One issue up for debate is whether Canada should continue to focus on providing high-quality wheat or focus on lower-quality varieties that could be more attractive to emerging economies where the growth in demand is greatest, he said. At the same time, Canada needs to work on building its reputation “as a most reliable supplier that people can count on for what they want on a dependable and timely fashion.”

One positive development for grain companies in the changes is that they can ship wheat, canola and other crops as co-loads on a vessel rather than filling a ship with just one crop, he noted. “This makes much more efficient management of the elevator system and other resources. It opens up the possibility of much different sales opportunities than existed before.”

The CGC reforms could still leave farmers and grain buyers paying for more services than they need, in part because there is no requirement for the commission to offer services in competition with private providers, he added. “Buyers don’t want to pay for all these services.”

Although it doesn’t go far enough, the rail legislation is important because “currently there are no consequences to the railways for service failures,” he added. Shippers are still questioning “how they can take advantage of the possibilities the legislation provides.”

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