“Farmers Must Not Shoulder Full Costs of Government Grain Services” CWB

Feb 4, 2011 | Corporate Member News

Producers must not be left to shoulder the full burden of costs for government-run services that maintain Canada’s grain quality-control system, says the chair of the CWB’s farmer-controlled board of directors.

The Canadian Grain Commission (CGC) has proposed major increases in user fees for its services, which include grain inspection, weighing, registration and licensing. The increases would more than double costs to farmers, who ultimately pay nearly all CGC user fees, adding at least $50 million a year to producers’ expenses for grain marketing.

The CWB today filed a submission to outline its concerns. The document has been posted here .

Allen Oberg

“It is essential that Canada’s grain quality-control and food-safety systems remain strong through adequate funding,” said CWB chair Allen Oberg. “But we as farmers cannot bear the entire cost for services that benefit all Canadians.”

The CGC provides an important public benefit in terms of research, quality assurance, regulatory compliance and food safety – all of which increase the reputation and value of Canadian grain in a highly competitive world grain trade. The CGC is now proposing a move to full cost-recovery for many of these services.

“Such a dramatic shift in how the CGC is funded would put a tremendously unfair burden on Canadian farmers,” Oberg said. “The CGC also risks facing competing priorities if it is forced to focus on opportunities to maximize user-fee revenue. Since many of its services are required by regulation, farmers and the grain industry would have a limited ability to respond.”

Farmers already pay considerable grain-handling, inspection and transportation fees for moving their crops to export position, said Oberg, noting that 90 per cent of the wheat grown on the Prairies is exported. CGC services must be provided to farmers and the grain industry in ways that are competitive with third-party service providers, in terms of both cost and service levels, he said.

“We believe there is considerable opportunity to make improvement in the provision of these services,” Oberg said.

Changes to user fees should not be implemented without first conducting an extensive business process review with input from key stakeholders, he added. The reviews should consider service standards, opportunities for enhanced efficiencies and the potential for CGC accreditation of third-party service providers.

“The CWB would be pleased to provide detailed input to those discussions,” Oberg said.

Controlled by western Canadian farmers, the CWB is the largest wheat and barley marketer in the world. One of Canada’s biggest exporters, the Winnipeg-based organization sells grain to more than 70 countries and returns all revenue, less marketing costs, to farmers.

For more information, please contact:

Maureen Fitzhenry
CWB media relations manager
Tel: (204) 983-3101;
Cell: (204) 227-6927
[email protected]

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