Sure, I can do that. Thank you very much.
The Agriculture Producers Association of Saskatchewan is pleased to have this opportunity to address the standing committee on the important issue of the future of the Canadian Grain Commission. APAS is Saskatchewan's farm organization with a mandate to promote the interests of agriculture producers in Saskatchewan. As a democratic grassroots organization, our objective is to effectively influence government and other industry stakeholders through sound policy development aimed at improving short-, medium-, and long-term sustainability of agriculture in Saskatchewan and Canada.
Ours is an industry that's gone through many evolutionary changes over a relatively short period of a few decades. Many of the changes seen in Canadian agriculture have been, first, to develop a strong agriculture industry in this country, and second, to react to the impacts caused by agriculture policies of other countries. Over time, the institutions, processes, and infrastructure that have been developed to build this industry have come to play very different roles in a world driven more by economics than subsistence, more focused on mechanization, and have moved from a largely public paradigm to one that is much more privatized.
In many cases, the infrastructure and institutions that have been put in place for the purposes of streamlining and building the agriculture industry have not evolved at the same rate as the rest of the industry. That does not mean, however, that there does not continue to be value in the presence of those institutions for the benefit of the industry and the Canadian economy as a whole. The Canadian Grain Commission is one such institution. In the case of the CGC, there is still value to the industry for the institution to deliver on the mandate on which it was originally organized. That is, one, to establish grain grades and standards; two, to regulate the transportation, handling, and storage of grain in Canada; three, to provide producer protection services; and four, to undertake and sponsor research in grain and grain products.
While there is little doubt that there is still value to be provided to the industry through the operations of the Canadian Grain Commission, the COMPAS report has, rightly in our opinion, identified several areas under which the CGC may need to evolve more quickly to streamline processes and practices to ensure maximum value is being provided to the industry and, more importantly from our perspective, to producers. For example, we concur with the recommendations made in the report that the CGC processes must become more transparent to the industry stakeholders, and that all stakeholders be afforded a more intensive opportunity to guide CGC policy and programs. We encourage the CGC to continue to work toward evolving the grading industry to ensure that producers in Canada continue to have competitive tools that ensure producer profitability on a global basis but don't limit Canadian producers from maximizing their ability to be profitable at home as well.
With the increasing trend toward privatization in the grain transportation and handling system, it is of paramount importance that producers are able to trust the institutions put in place to protect their interests. For this reason, it is of great interest to APAS that the CGC be more proactive in enforcing the Canadian Grain Act to ensure that producers' interests are protected, so that they retain and are able to continually enhance the power they hold in the marketplace.
Of the recommendations made in the COMPAS report, however, APAS is concerned with the recommendation that inward weighing and inspection services become optional in the system. With current mandatory use of inward weighing, producer-owned facilities, producers who utilize producer cars, and companies without export facilities are all able to access an objective assessment of the weight and grade of their grains and oilseeds going into the export terminals. This requirement provides stability and integrity for the entire system. Even in the case of inter-company transactions, the objectivity provided by the third party inspection allows for more stability in accurate weighing and grading. This could and should translate into a producer benefit, as companies are less likely to enlarge margins to cover error when purchasing at the producer level.
As stated previously, there continues to be net benefits to the industry through the use of institutions and processes that exist in today's environment. In the case of inward weighing and inspection, producers stand to benefit from a symbiotic relationship between the Canadian Wheat Board and the Canadian Grain Commission. Terminal gains that may be shared with the CWB are a direct result of Canadian Grain Commission inward and outward inspection at the terminals. Without an inward and outward weighing and inspection quantification, there would be no way of determining gains or losses other than by information supplied by the company.
Without a CWB there would be no mechanism to provide this value back to producers, as there are none currently for any other grains that are sold strictly on the open market. Without this inspection being mandatory, there is no accurate measurement of the throughput to determine terminal gains. From the perspective of maintaining producers' interests, the Canadian Grain Commission has an obligation to maintain the use of inward weighing and inspection to ensure that the grain handling system operates with integrity and honesty for the good of the industry and for the economy.
It is interesting to note that the move towards eliminating inward weighing and inspection services provided by the Canadian Grain Commission is largely being championed by those companies that own export terminal capacity. In the western Canadian system at present, the removal of inward weighing services would provide an extremely negative perception of the system, with those operators being given the ability to treat the rest of the system unfairly.
To mitigate the issues that eliminating inward weighing and inspection services would purportedly address, APAS would recommend that the differential in standards between country and export should be examined for the inefficiencies and added expense that it causes. Blending down or mixing in foreign material may be some of the most expensive practices we have, which will not be addressed simply through the elimination of inward weighing and inspection. There are some perverse incentives for operators to do the wrong thing because of the difference in standards between our country and other countries we trade with.
Producers will ultimately pay a large amount of the cost within the system. Even though other system participants ask for the service, and even if they pay for it, those costs will flow through to producers through handling and cleaning charges. Especially for the inter-company transfers, it is a net benefit to those companies to have the CGC facilitate shipment at the bottom of a grade. Those costs should not continue to be part of the costs that are for the public good or that are borne by the producer.
That's what I have to say right now. Thank you very much.