NFU warns of Bill C-48’s effect on feed mill licensing, low-protein wheat class proposals

(May 7, 2015) – Bill C-48, An Act to amend the Canada Grain Act, introduced on December 9, 2014, would make significant changes to how the Canadian Grain Commission (CGC) operates, change the CGC’s mandate and eliminate the CGC’s duty to report to Parliament annually. The National Farmers Union has taken an in-depth look at this Bill, and has also considered its effect on proposed changes to feed mill licensing and a proposed new low-protein milling wheat class, which were the topics of recent CGC public consultations.

“Bill C-48 would stop the Canadian Grain Commission from carrying out its work in the interests of grain farmers, it would allow government to end the bond security system that now pays farmers if a licensed grain company defaults and it would create room for political interference with Standards Committee appointments, a critical component of grain grading system,” said Terry Boehm, Chair of the NFU Seed and Trade Committee. “In addition, C-48 would require imported grain to be given best possible Canadian grade and it would provide government with increased powers that can be used to enforce Plant Breeders’ Rights (PBRs) on behalf of seed companies.”

“The NFU is generally supportive of the licensing commercial feed mills – and not mills owned by farmer co-operatives and on-farm feed mills – but when you think about what would happen if Bill C-48 becomes law, it makes the question more complex,” said Ian Robson, NFU Region 5 (Manitoba) Coordinator. “The government-run insurance-based producer payment protection system that Bill C-48 introduces would be much less reliable than today’s bond system. If Bill C-48 is passed, farmers will get a lot less benefit from commercial feed mill licensing.”

“By letting them refuse grain from unregistered varieties, Bill C-48 would also create the potential for feed mills to limit farmers’ range of choice for seed varieties used to grow feed, which of course would lead to higher farm costs for seed,” added Boehm. “By changing the mandate of the CGC to acting ‘in the interests of Canadians and grain producers,’ Bill C-48 removes the CGC’s obligation to protect farmers’ interests when they conflict with the interests of corporations, such as vertically-integrated livestock operations that own feed mills and multinational seed companies selling newer PBR-protected varieties. Thus the net benefit to farmers of licensing commercial feed mills is diminished, if not eliminated, by Bill C-48.”

The proposed addition of a lower-protein milling wheat class would have a negative impact on farmers, consumers, public wheat breeders and Canada’s reputation in export markets. The NFU is satisfied with the current wheat class framework and believes recent problems with gluten strength in some varieties can be solved in other ways. Even without Bill C-48, the benefits of adding a new low-protein milling wheat class would flow primarily to United States-based multinational grain companies, as they could increase their sales of low-protein wheat to existing customers, and to seed corporations that would obtain a larger market for wheat varieties developed for the American market.

“Canada’s comparative advantage in wheat exports has been quality, namely high protein levels. The proposed new milling wheat class is similar to American Dark Northern Spring Wheat, which means it would be harder to differentiate Canadian wheat from US wheat in export markets,” noted Doug Scott, NFU Region 7 (Alberta) Coordinator. “Bill C-48 would not only allow, but actually require, imported grain to be graded with the highest possible Canadian grade. This would allow grain produced on our farms to be mixed with grain coming in from south of the border, which would further undermine Canada’s reputation in our export markets.”

Canada’s deserved reputation for quality wheat was created, built and maintained by farmers producing and delivering the grain, along with institutions such as the CGC, CIGI and the single-desk CWB that supported and safeguarded the quality of wheat delivered to customers. The proposed new lower-protein milling wheat class would lead to farmers shifting away from high-protein towards high-yield production. Higher volumes would result in higher on-farm storage costs, increased trucking and higher local taxes for road maintenance. If a new lower-protein milling wheat class is created, Canada’s comparative advantage will be eroded and Canadian farmers will be forced into a downward spiral, competing for market share on price alone.

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For more information:

Terry Boehm, Chair, NFU Seed and Trade Committee: (306) 255-7638 or (306) 255-2880

Ian Robson, Region 5 (Manitoba) Board member: (204) 858-2479

Doug Scott, Region 7 (Alberta) Board member: (780) 650-1336 or (780) 358-2376

Bill C-48, An Act to amend the Canada Grain Act – Key Points

Submission to CGC on Licensing of Feed Mills

NFU Submission to CGC Consultation on Canadian Wheat Class Modernization