Thank you, Mr. Chair.
It's a pleasure to be back before the committee. I think I made an offer the last time I was here that we'd be pleased to return and that if there were particular issues that needed to be discussed I would also bring experts. I've done that this morning.
I'm pleased to have with me my colleague Jim Stuart, who is the director of industry services. He is also a member of the industry working group on KVD. As you mentioned, Mr. Chair, Randy Dennis is the chief grain inspector for Canada. He also sat on the industry working group.
I have a short statement, which I will read. I'm not sure whether my colleague has a statement as well. We'd be happy to take any questions following the statement.
We're pleased to appear before the Standing Committee on Agriculture and Agri-Food to discuss the issue of kernel visual distinguishability, commonly known as KVD.
Before we answer questions, we would like to provide some background on how we arrived at this juncture. KVD has been used in western Canada as a rapid and cost-effective tool for segregating wheat within the handling system. The visual appearance of the kernel is indicative of intrinsic processing quality. However, it should be noted that it is only in use in western Canada, nowhere else in the world. In recent years KVD has come under pressure. Producers and end-users have expressed growing dissatisfaction with the range of wheat varieties available to them. All segments of the grain handling industry realize it is time to acknowledge the limits of KVD and implement alternative systems to allow for segregation of visually indistinguishable varieties.
To address these growing issues, the Canadian Grain Commission indicated its intent to do two things: first of all, establish a new general purpose wheat class—the Canada western general purpose class—with no KVD requirements; and secondly, to remove KVD as a registration requirement, beginning with the six minor wheat classes.
In December 2006 this committee tabled a government response to a review of the Canada Grain Act and the Canadian Grain Commission. This response recommended the removal of KVD from all classes of western Canadian wheat. The Minister of Agriculture and Agrifood's announcement, on February 11, 2008, extended the removal of KVD to all classes of wheat, including Canada western red spring and Canada western amber durum, to August 2008.
This decision sent a signal to seed breeders to facilitate the development and registration of new varieties. It also will give farmers more choice in what they grow and market. Farmers will have access to new markets, biofuels, feed, and specialty options. Also, it encourages the industry to act quickly to put alternative systems in place to ensure continued buyer confidence in grain quality. The government has made the decision to eliminate KVD, and grain sector participants are now implementing the necessary changes to shift from a visual to a non-visual system.
All players in the wheat system know they need to adopt new procedures. Substantial progress is being made, and I will note four examples.
First, the Canadian Food Inspection Agency policies, procedures, and regulations are being aligned to facilitate KVD removal. In February of 2008 the CFIA wrote to the recommending committee for wheat, rye, and triticale instructing that KVD requirements be removed from the guidelines used to recommend a variety for registration. As a result, new varieties will still be evaluated to determine which class they belong to, but they will no longer be excluded from Prairie Grain Development Committee trials based on KVD. In addition, changes are being proposed to the seeds regulations to remove KVD from wheat import requirements.
Secondly, since July 2007 an industry committee on the removal of KVD has been developing the key elements needed in a post-KVD environment. This committee is building upon successful protocols devised by a previous working group focused on ineligible varieties. The current committee is composed of producer representatives from all prairie provinces, we in the CGC, the Canadian Wheat Board, the Western Grain Elevator Association, the Inland Terminal Association, as well as Agriculture and Agrifood Canada. The committee meets approximately every three weeks and maintains ongoing contact with other industry participants to ensure a coordinated effort.
At this point, the committee has determined that a combination of an industry system of declarations, grain company quality management systems and protocols, and monitoring and sampling protocols will be relied upon to ensure the quality of Canadian wheat.
Through this committee, the Canadian Wheat Board and grain handlers have reached an agreement on a handling and liability protocol for the 2008-09 crop year. As part of this agreed-upon protocol and the overall wheat quality management system, a declaration system has been finalized for the 2009-09 crop year. Producers will be required to sign a declaration form annually at each facility where they deliver. This declaration form states that the grain being delivered is eligible for delivery into the class of wheat for which payment is being requested. In addition to producer declarations, grain companies will be required to declare to the CGC wheat deliveries to terminal elevator position and to vessels.
Enhanced regulatory authority associated with declarations is also being considered to facilitate enforcement and compliance. Although regulatory provisions will assist the grain sector in a post-KVD environment, they are not immediately necessary.
As for the CGC's part in the quality management system, we will continue to conduct internal testing and monitor railcar and vessel shipments for the presence of ineligible wheat varieties. The CGC will continue to issue certification and report to grain handlers and exporters instances of shipment non-conformance.
The CGC has launched an extensive public communication campaign to explain the new declaration system and the changes. All members of the industry committee on the removal of KVD have agreed to the content of this campaign and are committed to working together to continue supporting Canada's brand reputation in domestic and international grain markets.
Campaign coverage includes both print and radio media sources spanning the western provinces, including the Peace River area of British Columbia. Information packages have also been distributed to grain handlers, producer groups, and provincial governments.
Rapid affordable varietal identification technology--commonly called VID--is part of the replacement strategy for KVD, and its development remains a priority. Several research projects are under way.
The Agricultural and Agrifood Canada cereal research centre is developing an innovative lab-based VID test. CRC is currently seeking proposals from private industry to pilot this technology to evaluate its potential for use in a commercial lab environment. NeoVentures, a private company, is in the process of developing a VID test for use in the elevator driveway. NeoVentures is projecting full-market entry by 2010.
Both the Canadian Wheat Board and the federal government have committed extensive funding to both of these projects. On top of that, the Canadian Grain Commission is working on VID technology development in single-kernel DNA systems to replace protein and electrophoresis testing, and on DNA analysis of composition of ground wheat samples for variety. Both of these are lab-based tests.
It's important to emphasize that the required steps are in motion to facilitate the removal of KVD for 2008. Significant effort is being expended by all sector participants to make this transition as smooth as possible and uphold the Canadian wheat quality assurance system. In addition, there will not be a flood of new, indistinguishable varieties into the system right away. In fact, at the recent February Prairie Grain Development Committee meetings, six general-purpose wheat lines were supported for registration. None of these lines indicate a KVD conflict with Canadian western red spring or Canadian western amber durum, and only two have actually been registered by the CFIA.
Other components of Canada's variety registration process will remain the same. The key quality, disease, and agronomic requirements for a variety of registration into the various wheat classes will not change. Removing KVD does not change the requirement for varieties to be registered prior to commercial production, and producers must still seed registered varieties if they want to deliver a milling grade of wheat.
In closing, the CGC and fellow members of the industry committee on the removal of KVD are committed to working together to make sure protocols and processes are developed for implementation beyond 2009. Ensuring the quality of wheat that domestic and international customers have come to rely on will remain a key competitive advantage for Canada.
I hope this information addresses some of your concerns.
Thank you, Mr. Chair, for the opportunity to make a statement.