Questions surround CGC’s use of surplus funds

Questions surround CGC’s use of surplus funds
Aug 02, 2018

The Commission has accumulated $130 million in user fees, which farmers may not see

By Kate Ayers
Staff Writer
Farms.com

The Canadian Grain Commission (CGC) announced yesterday it will invest millions of dollars in surplus funds into its Harvest Sample Program.

Beginning this year, producers who participate in the Harvest Sample Program will receive falling number and DON (deoxynivalenol) results from their wheat samples for free, a CGC release said yesterday.

CHC will fund this project through a $4-million investment from the commission’s accumulated surplus, collected from grain producer user fees.

The CHC has a total of $130 million of surplus funds, which will be split between a reserve fund ($40 million) and strategic investments ($90 million), a Western Canadian Wheat Growers Association (WCWGA) release said yesterday. The commission will fund the Harvest Sample program through its Surplus Investment Framework.

In the next few months, the CGC will hold consultations with grain industry stakeholders to advance  investment framework plans.

The investment will strengthen safeguards for producers, improve grain quality assurance programs and enhance grain quality science and innovation, the CGC release said.  

However, several producer organizations are not pleased with the CGC’s decision to invest surplus funds into special projects.

Indeed, stakeholders had shared their thoughts last year in the CGC’s preliminary consultations about the use of the surplus funds. By May 2017, the Commission received 92 written submissions with the majority of respondents agreeing the surplus should be used to directly benefit farmers, the AWC release said. 

“The surplus is farmers’ money stemming from overcharging for the CGC’s services and should not be spent without a business case and cost-benefit analysis that demonstrates value to Canadian farmers,” Kevin Bender, Alberta Wheat Commissions’ (AWC) president, said in an organization release yesterday.

AWC and Alberta Barley believe the CGC’s new initiatives should be paid for by the federal government, not Canadian producers.

“In our view, the focus of the CGC should be on an efficient, low-cost grading system that elevates Canadian farmers competitively in the global marketplace,” Jason Lenz, Alberta Barley’s chair, said in a joint release with AWC.

“We question how theses expenditures will achieve that and we look forward to making our views known to the CGC and the federal government.”

Instead, producer organizations have pushed for reduced user fees.

“Grain farmers are the ones that overpaid user fees for years, and the common-sense solution would have been to reduce user fees to draw down the surplus,” Jeff Nielsen, Grain Growers of Canada (GGC) president, said in a release yesterday.

“We welcome the opportunity for further consultation, but fees should have been reduced as a first step.”

Indeed, some in the grain sector believe that the CGC should no longer serve as both a service regulator and service provider.

“These charges by the CGC, which amount to tax, are taken from the farmer’s bottom line and should not be used to expand the mandate of the grain commission,” Jim Wickett, WCWGA chair, said in a release.

“It is time we look at private sector numbers and find the most trustworthy and most cost-effective way to provide the services of the CGC. It would be the fraction of the cost.”

 

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