Agriculture Committee on Oct. 5th, 2006

[James Bezan, Conservative, Selkirk—Interlake, MB]

Thank you, Mr. Chair.

I definitely enjoyed your presentations and appreciate the comments you've made.

The thing I want further comment on is this. One of the witnesses we had earlier from the Canada Seed Trade Association said that the Grain Commission and the regulations we have in place today have cost prairie farmers over $200 million. A lot of that has to do with mess-ups in grading and the KVD.

It disturbs me somewhat to know that we have a great scientist sitting in Saskatoon doing his research in the United States, that those dollars are going to the United States and the American producers are benefiting, and that we can't do that research here because of regulation. I want to get your comments on that.

As well, there is this whole issue of producer cars. There have been some claims that producer-car allocation is only possible because of the Grain Commission and Wheat Board regulations. I know, Mr. Johnson, you're doing a lot of shipments by producer cars, and I assume a lot of grain buyers who are dealing privately with farmers are doing it through producer cars and containers. I'm wondering whether that is truly the case or whether the system we have in Canada today can be improved upon.

[Dr. Brian Fowler]

In terms of our grading system and the quality we have right now, I think I would prefer to let other people's comments answer the question for me.

Before we had protein concentration as a grading factor, I heard a comment made by one of the European buyers. They sort of laugh at us, because the comment was that Canada is the only country in the world that grades on the basis of sight, taste, and touch. The rest of the world was moving toward trying to grade on the basis of the actual quality.

This attitude toward the Canadian grading system has been out there for years. This is not something new we're talking about right now. More recently--

[James Bezan, Conservative, Selkirk—Interlake, MB]

I'm going to stop you for a minute. If you're dealing with KVD, on sight, taste, and touch, these are all very subjective sensory issues that could change from person to person.

[Dr. Brian Fowler]

Yes, that's right.

[James Bezan, Conservative, Selkirk—Interlake, MB]

That's why we probably had problems with some of our grading disputes that happened in the system.

[Dr. Brian Fowler]

Yes, and the rest of the world is trying to move away from these problems. This is before protein concentration was being measured, so are we talking fifteen or twenty years?

More recently, I was at a meeting of the American Association of Cereal Chemists. They have these panels, and it seems that at every meeting I go to they have somebody from Australia, the United States, Canada, and in this case it was somebody from France who was talking about the marketing systems. They all presented their talks and there was a panel discussion afterward. There was a little lull in the questions, so the Australian jumped in and asked the Canadian Wheat Board representative on the panel, “How long do you think you'll have KVD in place?” Her response was, “Well, it's going to be at least ten years before we can consider changing it.” His comment was, “That's the best news I've heard at this meeting.”

I think that is a much better indication of how our system is perceived than anything I can say.

[Vicki Dutton]

One of the things I find good in the recommendations of this report is the fact that they actually recommend review and reporting, and they set timeframes on it. I think one of the failures of agricultural policy, indeed certainly in the recent history, is our failure to review when we're doing something wrong. Then when we know we're doing it wrong, we ignore it for another decade. Those costs are not affordable. I'm sure most of you are familiar with the economic statistics of the industry, and particularly in my province, they aren't that great.

Wheat is generic. I could throw you twenty samples of wheat here and challenge you, and probably even Brian, to pick them apart, and you couldn't tell one from the other.

[The Chair, Conservative, Gerry Ritz]

Mr. Johnson, on the second portion of Mr. Bezan's question, would you like him to read it back to you again?

[Conrad Johnson]

No, no, I've heard it.

[The Chair, Conservative, Gerry Ritz]

Good, because he probably couldn't.

[Conrad Johnson]

Given the atmosphere in the industry, I've heard it quite a bit lately.

As far as the CGC and producer cars, they administer them and get them out. There's an individual called Barry Daciw at the Grain Commission who handles the producer cars. I've never met him except over the phone. He's an amazing individual. How he makes sense of that whole thing, I'm not sure, but he does an excellent job. I can't see that changing, if the role changes.

We do ship a lot of cars off our line that aren't producer cars. Even our little plant does between 200 and 250 pea cars a year. We have no trouble getting them; they're probably easier to get than the producer cars. We have other sites on our line that do only pulses and they have no problems.

I guess the problem with this whole producer car thing is that you can have all the cars you want, but if you're doing board grains and you have no orders, it doesn't matter. If things change there, it doesn't mean the cars will go away. We still have the same amount of cars. We deliver 100 cars at a time to Assiniboia; CP likes to hook and haul.

Simply because things change, it doesn't mean they'll be worse. I think we can make them better. I'm not concerned at all.

[The Chair, Conservative, Gerry Ritz]

Thank you, Mr. Bezan.

Mr. Easter, five minutes.

[Wayne Easter, Liberal, Malpeque, PE]

To Vicki first, you kind of indicated earlier that you like the contracting out. We've had others very, very strongly opposed to contracting out. Why do you take the position you do?

[Vicki Dutton]

We deal every day with a non-CGC grader, with SGS. They follow the Canada Grain Act standards. Indeed, we've conducted our business...because if you're not licensed and bonded, you cannot access CGC grades. SGS is a world-recognized grading house. Indeed, they may be one; there may be others.

I think the importance of doing a job is not who does it; it's that the parameters for doing the job are set and controlled. That would be the role of the Grain Commission, whether it be their inspectors or whether it be the contractor's.

There are instances where people may perform better under the private sector than the public.

[Wayne Easter, Liberal, Malpeque, PE]

I want to come back to the whole issue of mandate and governance structure, which is the key question. We've heard from Mr. Johnson.

I think you may be talking about somewhat close to the current system but with some changes, but not going to exactly what's recommended in the report. Do you want to run that by us again? That is a controversial area in terms of the makeup of the Canadian Grain Commission, itself. You'd certainly get no disagreement from me in terms of the need to have people who are actually working the ground, as the assistant commissioners do.

[Conrad Johnson]

We definitely don't want them appointed. We want them hired.

Again, we're not hung up on the semantics of calling them assistant commissioners. We just want to make sure someone with some title is in the field working with day-to-day problems that occur on the prairies, and not back in Winnipeg.

[Wayne Easter, Liberal, Malpeque, PE]

I think there's a lot of good information here. The only other thing I had, Mr. Chair, is I would like someone to find out about the Ontario Corn Growers' model that Vicki talked about. Perhaps the researchers could look into that.

Where would we go to find information on the black box technology? I mean, it is 2006. We have to utilize the technologies that are available to us. I'm wondering if there is a direct discrepancy in cost between what Conrad said and what Alex said earlier.

What was the cost that this could be rented for, Conrad?

[Conrad Johnson]

It's DuPont technology. They demonstrated it at our wheat growers convention. They will lease that for $750 a month.

It's not huge. It's two feet by two feet by two feet.

[Wayne Easter, Liberal, Malpeque, PE]

So it's like with a regular grain sample. You dump a sample in and it comes up with the falling numbers or whatever.

[Conrad Johnson]

I forget. There are six or seven different....

[Wayne Easter, Liberal, Malpeque, PE]

We need to get a handle on that, because I think that would overcome some of the concerns that Dr. Fowler is talking about--correct?--in terms of opening up opportunities for other characteristics and other uses. And that, along with a statutory declaration, would certainly I think give the safety check in terms of assuring the quality that we say is there into a foreign market.

[Dr. Brian Fowler]

There are a number of issues here in terms of the quality. You said earlier that we have the best wheat in the world. Well, I think that statement can certainly be challenged, because the Australians would have every right to claim that right now. I think it depends an awful lot on whether you're talking about something that goes out by a boat load or something that's going out on a smaller volume.

One of the big problems we have in western Canada is that we have no way of dealing with the smaller volumes. Certainly this type of technology--and I have not seen it--would allow us to be able to solve both problems. We could maintain the type of quality that we need in this mass shipment, and it would also allow us to get into some of the niche markets, and that's where all your big markets start.

[Wayne Easter, Liberal, Malpeque, PE]

How about if we said we had the best grain breeders in the world? Would that work?

[Dr. Brian Fowler]

Well, right now--you stopped me--there is a major discrepancy. In terms of being best, you have to have resources, and the Australians have about ten times the resources we have. So we're a long way behind.

[Wayne Easter, Liberal, Malpeque, PE]

Tell these guys that. Tell them we need resources.