by Stewart Wells
In 2014, a longtime advocate for grain trade deregulation and a former researcher for the Western Canadian Wheat Growers Association was quoted in the ag press as saying “I don’t remember one serious conversation about market power and the dangers it imposed.” Apparently that conversation still hasn’t happened for the farmers who are lobbying to open Canadian borders to an influx of US-grown wheat.
The American National Association of Wheat Growers (NAWG) and US Wheat Associates are lobbying the US government to help them export more wheat to Canada. They claim Canada’s grain grading system is a barrier, so they are asking President Donald Trump to put pressure on Canada. It is not surprising that in Canada, the corporate-backed wheat lobby groups – Cereals Canada and the Western Canadian Wheat Growers — as well as the Western Grain Elevator Association which represents the grain trade, are on-side with NAWG and US Wheat Associates too.
These lobby groups want to change the Canada Grains Act to allow American grain access to our wheat grading system or else to get rid of the grading system altogether so that companies buy on specifications instead. Both options would help the multinational grain companies and harm farmers.
But first, let’s get one thing straight: Canadian millers can already bring in as much US-grown wheat as they choose. No limits. Bringing in large amounts of U.S.-grown wheat would mean mixing that grain with Canadian-grown product and moving it through the already-stressed Canadian export system. Shady marketing will sell this grain as “Canadian origin” which would give corporate profit a short term boost — until the world recognized that this grain is not really the superior or unique Canadian wheat they were expecting. In short, our much diminished Canadian market power would suffer another serious blow.
The idea that the US is missing out on the Canadian market makes no sense either. The US and Canada are two of the world’s largest wheat exporters. In 2016, the wheat Canada imported was less than one percent of our exports.
Our international reputation for quality wheat didn’t just happen. It was built by Canadian farmers and governments who knew that strict quality control measures are needed to obtain premium prices on the world market. The wheat-growing areas of the Ukraine, the USA and Australia are much closer to ports. Our quality standards allow us to obtain higher prices which compensate for the cost of moving grain from the prairies to port. Our system, of which the Canadian Grain Commission is a key component, adds about $70 per tonne to the farmers’ price. Most years, Canadian farmers produce around 25 million tonnes of wheat, so our system adds $1.75 billion to Canada’s economy every year!
What else is at stake if our government caves in to these lobby groups?
Allowing grain companies to mix American wheat with Canadian-grown wheat would give US wheat a free ride on the seed-to-port-terminal quality control system we have developed over the past century, and which the Canadian Grain Commission (CGC) oversees in the interests of Canadian farmers. Canada’s grading system ensures farmers have recourse to an independent arbiter, the CGC, if we think our grain has been unfairly discounted by the elevator. The CGC’s official grain grading guide provides transparent standards for the grading of grains, oilseeds and pulses. If Canada were to dismantle our grain grading system altogether, Canadian farmers would have no choice but to sell via individual contracts with grain buyers. The buyer would then have all the power and farmers would have no recourse if their grain was unfairly discounted or rejected.
The multinational grain traders – ADM, Bunge, Cargill, Louis Dreyfus, Viterra and Richardson International – are connected to the lobby pushing for US access to Canada’s system. These companies stand to gain millions, if not billions, in additional profits by disabling the CGC. The grain trade would then be in position to take an even greater share of farmers’ wealth with impunity.
Farmers need to call upon our federal and provincial Agriculture Ministers as well as our provincial wheat commissions to stand firm and uphold the CGC and our grading system in the interests of farmers, our rural economies and Canada as whole.
Stewart Wells is a grain farmer from south-western Saskatchewan and a former President of the National Farmers Union.
