Good morning. Thank you very much for this invitation to appear and discuss aspects of the supply chain.
The Canadian National Millers Association is a national industry association representing millers of wheat, rye, and oats, principally, with small quantities of other cereal grains processed and handled by our members.
You have one page, I believe, that was distributed. It is a schematic of the supply chain as we have portrayed it. Our perspective of the supply chain is what you have there, and I'll speak to it in a minute.
I think our key theme today is the importance of the evolving regulatory framework and how it affects the entire supply chain. Our domestic regulatory framework is what I'm speaking about principally, and much as Philip has talked about the influence of trade agreements and international trade factors, our members and the customer industries of our members—the further processing sectors—are being heavily influenced by regulatory influence outside of the country, in particular the European Commission regulations and those adopted by EU member states. I'm going to speak about that.
I would like to say at the outset that I think this committee would benefit from spending additional time talking about and studying the influence of regulation on the whole supply chain, because what we're experiencing in our community, which is captured by the membership of the Canada Grains Council and also by the Grains Innovation Roundtable , is that things that are happening right at retail level are trickling all the way back down the supply chain. That is the key theme and invitation that I would like to leave with the committee.
We see the supply chain as you see it on that schematic. We and our little logo, the Canadian National Millers Association, are right in the middle. We have inputs. We have producers, marketers, handlers, and transportation services. We consider and describe ourselves in our charter as being primary processors of cereal grains. We sell to further processors and food service organizations, and of course to retailers through various channels. That's the entire supply chain, which ends, of course, with the consumer.
In the case of the cereal grains supply chain, it's characterized by many grain producers. There are 325,000 farms in Canada producing field crops; 82,000 farms have their primary source of income in grain production, as opposed to other commodities. The total number of farms contributing to our supply chain is over 100,000.
In terms of grain production in Canada, we have 75 million tonnes of all crops combined. Our industry is national in scope, and cereal grains account for, historically, something close to 70% of all commodity production. Wheat and oats would together contribute more than 30 million tonnes of production.
Why do I touch on that? Well, cereal grain production is still a major contributor to farm income and a major export activity for producers in the whole supply chain.
When we think of the grain supply chain as we manage regulatory issues, we also think in terms of the infrastructure and what its implications are for meeting regulatory requirements as well as market requirements.
We have 600,000-plus storage bins on farms, and other storage structures as well. We actually have 300-plus country elevators in western Canada. In Ontario there are 264 licensed grain dealers, 337 elevators, seven terminal elevators, and five transfer elevators. As grain finds its way to us, we have 20,000 hopper cars in the fleet, and 150,000 trucks and bulk trailers. We have cereal grain deliveries to about 40 Canadian mills that exceed 90,000 in number annually.
Those are some numbers to indicate to you the complexity of the supply chain, particularly as that complexity is altered and affected by regulatory change and things we're trying to do differently at the far end of the supply chain, at retail level.
We have, therefore, a shared storage, handling, and transportation system, all the way up to the receiving pit of mills.
What I'd like to speak to briefly is the following. In the context of Canada and the United States being the principal markets, the North American market for the products produced by our member companies and to a great extent by the further processors--bakers, biscuit manufacturers, cereal, confectionery--we have what would amount to a regulatory disconnect between the Canada Grain Act and regulations and the Food and Drugs Act.
There has been a great deal of attention paid to Bill S-11—appropriately, as it is a very important piece of legislation, which we advocated and supported—but I think what is lost on most people is that in the case of our grain milling industry, the products produced from our industry and sold into other industries are being sold to industries that are in fact subject principally to the Food and Drugs Act and regulations. Therefore, while Bill S-11 is going along swimmingly and we're going to have a great deal of progress under the bill, we're going to be continually challenged by the provisions of the Food and Drugs Act.
I prepared a submission to this committee, as well as to the Senate committee on Bill S-11, highlighting the importance of a certain amendment to the Food and Drugs Act. I won't go there, but it is very important to note that we're subject to the Food and Drug Regulations. Those regulations are being driven by international regulations, including the European Union's. What we're proposing to do in Canada, which affects us and the whole grain supply chain, is out of step with what's going on in the United States.
That's very important. Phil talked about the importance of trade alignment and market access. We are increasingly moving out of step with the U.S. regulatory environment with the path that we are on with substances in grains.
I must emphasize that we really have to get regulation right. This has been our key message to Health Canada and the Canadian Food Inspection Agency. These changes that are upon us have nothing to do with marketing regulations. These changes that are upon us and in process are profound, and they affect the whole supply chain. We have to get them right the first time, because we can't do them twice.
I think this committee would benefit from further study of some of those regulatory issues and their importance.
Thank you.