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How you’re funding the WGRF

In the last issue of Grainews we ran a story about farm research levies. That was just the first in a series of articles about the organizations representing Prairie farmers.

In this column: the Western Grains Research Foundation. You’re funding that. Your money gets to the WGRF in two ways. We’ll start with your levies.

WGRF levy funding

I’m sure you remember all the details about this from the last issue, but here’s a quick review.

When you sell wheat in Western Canada, $0.48 per tonne is deducted from your grain ticket. This is the wheat and barley checkoff. Of that $0.48, $0.03 is spent on administration, $0.15 goes to the Canadian International Grains Institute and $0.30 finds its way to the WGRF.

Barley is similar. When you sell barley, your checkoff is $0.56 per tonne. Of this, $0.50 goes to the WGRF. Another $0.03 per tonne goes to the Canadian Malting Barley Technical Centre, and $0.03 is used for administration. (Unless you’re selling your barley in Alberta. In that case, you only pay a $0.04/tonne wheat and barley checkoff. You’re funding research through your Alberta Barley Commission levy.)

In 2013, the WGRF took in $10.7M in total wheat levies and $1.2M in barley levies.

The wheat and barley checkoff has only been in place since the summer of 2012. Before that, the Canadian Wheat Board deducted money from your grain sales to fund the WGRF, Cigi, and the CMBTC.

Here’s a key fact: the wheat and barley checkoff is temporary. It’s only in place until July 2017. After that, it’s not clear how the WGRF will collect wheat and barley research funds. Some of the new wheat and barley commissions may increase their levies and transfer money to the WGRF.

The wheat and barley checkoff is refundable. See wheatbarleycheckoff.com to learn how to get your money back.

If you don’t get a refund, you can use Revenue Canada’s Scientific Research and Experimental Development tax credit. For 2013, the CRA has decided that you can claim 68 per cent of your wheat checkoff and 71 per cent of your barley checkoff for the tax credit (based on the share of funding spent directly on research.)

The WGRF’s endowment fund

Separate from these levies, the WGRF has a little mad money socked away. More than $100M, actually. They call it an endowment fund.

This fund has been building since 1981. That year, $9M was transferred from the Prairie Farm Assistance Act when some federal ag programming was discontinued. This money belonged to all farmers, so it was socked away in a research fund that could benefit all farmers.

In 2000, Transport Canada in consultation with Agriculture Canada*  decided that railway overpayments should also go to the WGRF. At the end of each year, if CN or CP have charged more than they should have under their revenue caps, they pay that overcharge to the WGRF’s endowment fund.

Again, this is money that belongs to all farmers. Of course, you don’t see your contribution in your farm books. Your local elevator paid the railway to move your grain. Presumably, if the rail freight rate had been lower, your cheque would have been bigger. So, while railway overpayment money belongs to farmers, it’s impossible to calculate your individual contribution. You can’t get a research tax credit; you can’t call the WGRF and ask for a refund.

Most years, railway overpayments don’t amount to a lot of money. (Well, not if it was divvied up among all farmers.) For the 2013-14 crop year, CN will pay $5.2M to the WGRF. That is, CN collected $5.2M more than it should have under its revenue cap during the 2013-14 crop year; every farmer who shipped grain on a CN line made an extra contribution to the WGRF. (CP was under its revenue cap in 2013-14.)

In the 2012-13 crop year, CP charged $186,859 above its revenue cap. This also went to the WGRF.

Most years this number sneaks by when nobody’s paying attention, but you probably remember the 2007-08 crop year, when the total railway overpayment was $66.6M.

Who’s running this place?

In my last column, I offered up a lecture, telling all of you that since you’re paying levies to so many farm organizations, you should get actively involved, maybe even become a board member.

Being a board member at the WGRF would be fascinating. You’d be the first to know about all kinds of new research, and you’d have a chance to set research priorities.

But, getting yourself on the WGRF’s board is a little more complicated than becoming a board member with most levy-collecting groups. This is going to be a two- (or three-) step process.

First, you need to know that there are three classes of WGRF members. Class A members are farmer organizations. Only Class A members get seats on the board of directors. There are 18 farm group members, so there’s an 18-person board. Class B is for government members — there’s just one: Agriculture and Agri-Food Canada. Class C is for industry members.

So, to get on the WGRF board, you’ll need to get yourself appointed as the representative of one of the 18 member farm organizations. Typically, you’d have to get elected to the board of directors of one of these groups, then convince your fellow board members to appoint you as the WGRF representative.

In some cases, you’ll have to jump an extra hoop. For example, a board member of the Saskatchewan Canola Growers would need to become that group’s representative to the Canadian Canola Growers Association. Then, she could become the Canadian Canola Growers’ representative to the WGRF.

These are the 18 Class A WGRF members:

  •  Saskatchewan Flax Development Corporation
  •  Alberta Federation of Agriculture
  •  Saskatchewan Wheat Development Commission
  •  Prairie Oat Growers Association
  •  Western Pulse Growers Association
  •  Keystone Agricultural Producers
  •  Canadian Canola Growers Association
  •  Western Winter Cereals Association
  •  Western Canadian Wheat Growers Association
  •  Saskatchewan Barley Development Commission
  •  Alberta Barley Commission
  •  Canadian Seed Growers Association
  •  Alberta Wheat Commission
  •  B.C. Grain Producers Association
  •  Western Barley Growers Association
  •  Manitoba Wheat and Barley Growers Association
  •  National Farmers Union
  •  Agricultural Producers Association of Saskatchewan

I didn’t include the names of the representatives from each organization because this is prime AGM season, and some may be changing right now.

You likely noticed that not all of the associations represented on the WGRF’s board are research organizations. Policy groups like Manitoba’s KAP and the National Farmers Unions are also WGRF members.

WGRF research spending

Like a married couple with separate bank accounts, the WGRF keeps its levy spending apart from its endowment fund spending.

Wheat levies are spent on wheat research. Same with barley. But money in the endowment fund, which came from all farmers, is spent on research into all types of crops.

In mid-November, the WGRF finalized its 2015 research budget. This must have been a long meeting — they’ll be spending $18M on research in 2015. (I notice that’s $1M per person at the table, but I’m sure that’s just a coincidence.) The post-meeting press release said they’re co-funding with 30 different organizations on more than 125 research projects, worth over $22M (including other organizations’ contributions).

That kind of spending is sure to yield a lot of useful information. You’re funding it. Be ready to use it.

* Note: This article originally stated that the Canadian Transportation Agency made this decision. It has been corrected above.

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