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Changes for Grain Act back on table

Amendments to the Canada Grain Act that would end the producer payment security program and rework the Canadian Grain Commission’s mandate are back on the federal government’s legislative agenda.

The amendments formerly known as Bill C-39, first introduced in December 2007, died on the order paper in September 2008 before the federal election the following month.

Through the planned amendments, in a move the government said will reduce costs, the current producer payment security program overseen by the Canadian Grain Commission (CGC) will end.

The program requires CGC-licensed grain companies to post security to cover what they owe for producers’ grain in the event that a company folds.

“This will bring the western Canadian grain industry in line with other agricultural sectors and with the grain industry in Eastern Canada where the federal government does not require the industry to participate in similar security programs,” the government said.

“Costs of such programs are ultimately borne by producers. Ending the producer payment security program will reduce system costs, and clear the way for producer or industry groups to develop other alternatives to help manage risk in a cost effective way, if they so wish.”

Several farm groups have criticized that move, some for the lack of viable alternatives offered, other saying it would leave farmers holding the bag if a grain company goes bankrupt without paying what’s owed. Other observers, however, felt a system in which farmers are forced to insist on cash up front might not be such a bad alternative.

The amendments would also split the CGC’s mandate into two parts: the CGC’s core mandate, to establish and maintain quality standards for Canadian grain and to regulate grain handling in Canada, and a mandate to protect farmer interests with respect to deliveries to elevators and grain dealers, access to binding CGC determination of the grade and dockage of grain deliveries, and the allocation of producer cars.

The amendments would also remove the requirement for mandatory inward inspection and weighing of grain being delivered to terminal or transfer elevators. Shippers would have the right to request weighing and inspection, the government said, and terminal and transfer elevator operators would be required to allow access to service providers who would weigh and inspect.

“While the CGC will no longer be involved in the delivery of this service, both shippers and elevator operators will have access to binding CGC arbitration in the event of dispute over a grain grade,” the government said.

The government’s proposals drew fire last May from three former CGC commissioners who said the plan would “gut the Grain Commission’s inspection, weighing and independent oversight that ensures producers are treated fairly.”

“These cuts will undermine grain producers in their dealings with grain companies, which have never been more powerful,” former commissioner Bob Douglas said. “Canada’s reputation for top-quality grain will be hurt too. You can’t protect producers and make these cuts at the same time.”

Federal Agriculture Minister Gerry Ritz, announcing the revived amendments in a release Monday, said the changes would modernize the CGC to “better reflect the current realities facing grain farmers.”

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