Evidence of meeting #17 for Agriculture and Agri-Food in the 39th Parliament, 1st session. (The original version is on Parliament’s site, as are the minutes.) The winning word was kvd.
A recording is available from Parliament.
NDP
Alex Atamanenko NDP British Columbia Southern Interior, BC
Is the implication that we can learn from this system?
President, Great West Railway
When I've asked the Grain Commission about it, they say they're developing the technology. When all these problems, trade disputes, started in 1992, the U.S. had the technology there. We talk about the black box technology. Go to any grain terminal in Montana and you'll see it. A lot of them will have a lot of dust on them because they've been there for years. It's not like it's new.
NDP
Alex Atamanenko NDP British Columbia Southern Interior, BC
So would Australia fit in the same...from your experience or knowledge?
Thank you.
Conservative
The Chair Conservative Gerry Ritz
Thank you, Mr. Atamanenko.
Just following up on Mr. Atamanenko's question and your responses, do you have any idea of the negative economic impact on western Canada because of the KVD system? You were saying we're getting very little for number three here, yet you go across the border and it's considered the finest milling, and we end up with a trade challenge. Can anybody put any numbers to that--the negative economic impact? Are there any studies you can point us to that you're aware of?
Professor, Plant Sciences Department, University of Saskatchewan
There have certainly been studies, but I'm not the one to comment on that. There have been economists who have looked at this and they have come to vastly different conclusions.
The problem, as I see it, right now with KVD is quite a bit separate from the quality issue itself. With KVD we're trying to use a system of visual distinguishability to put a measure on characteristics that are completely unrelated to the look, the smell, and the taste of the grain. There are environmental factors that come into play, as I said before. If you go through the system from an historical standpoint, when we had little elevators all across western Canada and we were shipping carload lots to Vancouver and they were all being dumped into a boat, then everything came out pretty uniform. So you're essentially selling one product. To millers and bakers, especially international ones, it's uniformity that is the thing they want, and they still want, but that's not the situation anymore. We have unit trains going in and they're collecting from the area, and we also would like to get into some of these niche markets. A farmer in the U.S. can set up their own milling operation and they can start selling from that. That can't happen in Canada to the same extent, because they would have to operate through the restrictions of the Canadian Wheat Board.
Conservative
The Chair Conservative Gerry Ritz
Hot darn, there's a private member's bill that will address that.
Mr. Thibault, shoot.
Liberal
Robert Thibault Liberal West Nova, NS
It seems logical to have a science-based grading system, as opposed to an objective one, that permits a better response to the market. To me, that seems logical.
As a man who hasn't followed this for the last fifty years, I'd like to ask why we still have KVD. Who benefits from having a KVD system?
Professor, Plant Sciences Department, University of Saskatchewan
As I mentioned before, when it came to moving protein concentration into the grading system in western Canada, there was a real struggle. It took years to bring it in. The Canadian Grain Commission was very cautious in their movement. This is part of the problem—there is extreme caution. This is an institution that's afraid to change.
Winter wheat is a very small component. I have gone to them numerous times and told them to experiment in this area. If you make a mistake with winter wheat on 500,000 acres, you are not going to suffer the same loss as you would with hard red spring, which is on 16 million acres. Also, you don't have an international reputation on the line. But it's like talking to a brick wall, and this is where the problem is.
One of the recommendations in this review, which I think is important, is that there needs to be more communication with the people who have an interest in the question. What little communication that's occurred has been shouting matches.
Liberal
Robert Thibault Liberal West Nova, NS
So it's the commission that's resisting, rather than the producers or the buyers.
Professor, Plant Sciences Department, University of Saskatchewan
Some buyers would like to leave things the way they are. The millers are happy with the system, because they are benefiting. You don't have to think.
Conservative
David Anderson Conservative Cypress Hills—Grasslands, SK
Nobody seems to know what KVD is costing. Somebody the other day suggested $200 million. But we now have wheat with less disease resistance, and Conrad is talking about 40% less yield. It has to be significant, and we need to acknowledge it.
With respect to statutory declarations, a couple of years ago the Grain Commission and others tried to force the varietal eligibility registrations on farmers. This was rejected. How do we protect producers? In this kind of system, I deliver my grain and I declare what it is.
Do you have any thoughts on how we can protect producers in this system once they've delivered? Others may not be as interested in protecting them as we are. Do you think they need further protection? They make the declaration and deliver the grain. Is there any conflict there?
As an Individual
One of the issues of declaration goes back to the Canada Seeds Act. Under it, you can't name a variety unless it's certified. That's one of the changes that would have to happen. Under the Seeds Act, you cannot name a pedigree variety as its own, or even say it's anything like that, if you're representing it. I don't know the implications of the overlaps in this case.
As for farmers knowing what they grow and making the declaration, I can't speak for the wheat buyers, but most of the people know what they're growing. However, if they're buying brown bag seed and they're buying it from their neighbour, there might be implications. For example, someone might say he was sold Elsa and bought it from his neighbour, when it was actually Grandin wheat, or one of Dr. Fowler's winter wheat varieties. This happens.
Certainly, a little more money in the agricultural sector would allow them to have access to certified seed more often, which would enable this to work much better.
Professor, Plant Sciences Department, University of Saskatchewan
I'd like to correct that.
Within the Canadian Wheat Board you can use variety names. They buy on variety names right now, and it doesn't have to be certified seed. Only Warburtons does that.
In respect of misrepresentation, I think the answer to your question is in Australia. I asked the Australians this question, and they talked about possible problems with an affidavit system. They said problems arise occasionally, but they've been able to deal with them. Rather than try to reinvent the wheel, as we do all the time in this country, it would be worth our while to go and take a look at some of the systems that are working in other countries.
President, Great West Railway
With Navigator and Snowbird, there are varieties within the system that we see in declarations, and we keep them separate. It's not a problem.
We sat at a table with an official from the Australian Wheat Board and talked about statutory declarations. He said the enforcement doesn't come from the agency itself but from the farmers. If a neighbour tries to sneak a load in and screws up a whole silo of grain, usually the neighbours will take him out behind the woodshed and discuss it with him. It doesn't usually happen again.
Conservative
Conservative
David Anderson Conservative Cypress Hills—Grasslands, SK
Dr. Fowler mentioned that the Wheat Board suggested it would be ten years before they'd be able to move away from this. I'd be interested in knowing how big a factor our current marketing structure and agency are in maintaining KVD. You've talked about the CGC's role in this. How big a factor is the board?
Professor, Plant Sciences Department, University of Saskatchewan
There's a real grey area when you starting talking about the difference between the board and the Canadian Grain Commission, because they're dealing with one another all the time. To answer your question, the board is the reason we have KVD—if that was the question.
Conservative
The Chair Conservative Gerry Ritz
Thank you.
Mr. Bellavance, do you have a quick point?
This will be the last word.
Bloc
André Bellavance Bloc Richmond—Arthabaska, QC
Gerry, that isn't a question; it was more of a suggestion. We've been talking quite a bit about the cost of KVD, but without really having an exact assessment of those costs.
David talked about a particular evaluation. Couldn't we ask our researchers to look at this and try to provide us with some assessment, even if it's not perfectly accurate? That way, we would at least have as close an idea as possible of how much this could cost producers?
Conservative
The Chair Conservative Gerry Ritz
Are you talking about the seed sector, as Dr. Fowler did, and our losing out there, as well as about the marketing side? Do you want it overall, or are you talking strictly about the marketing grading?
Bloc
André Bellavance Bloc Richmond—Arthabaska, QC
In my opinion, it would be a good idea to do it for the whole thing.
Conservative
The Chair Conservative Gerry Ritz
The whole thing? Okay.
He thanks you for the homework. Great.
Dr. Fowler.
Professor, Plant Sciences Department, University of Saskatchewan
You should also get some information on whether it actually works. I would submit that you could get rid of it completely, and even if it saved you five cents, you're going to be further ahead. You have to go through the whole system. There's a domino effect that occurs here, and to try to get a number on it is very difficult. But it's not being used to any purpose right now, so why the hell keep it?