By Cathy Holtslander
The United States-Mexico-Canada Agreement (USMCA), proposed to replace NAFTA, covers grain in just four paragraphs of the Agriculture Chapter, but the section has serious implications for Canadian farmers. It would give US-grown wheat a free ride on Canada’s international reputation and ultimately threaten the quality control system that allows prairie farmers to obtain premium prices for our wheat. USMCA gives American interests a voice in consultations about our seed regulatory system, encroaching upon our seed sovereignty. The USMCA’s grain measures primarily concern the bulk wheat exports of Canada and the USA, as Mexico is not a significant wheat exporter, and Canadian millers are already able to freely import US wheat for food processing.
The USMCA grain section requires Canada to give imported US wheat the same grade as our own, and would prevent Canada from identifying country of origin for US wheat on our grade certificates. To implement these measures, we would have to amend the Canada Grain Act, which currently says imported wheat must be identified as “foreign,” kept segregated from Canadian wheat, and graded as “sample” if delivered into our bulk handling system destined for export. The Canada Grain Act requirements are the foundation of Canada’s reputation for quality assured grain.
Canada’s class and grading system is highly valued by our international customers because our system assures customers they will get known and consistent quality in our shipments. They pay higher prices because of our quality assurance standards. Canadian farmers need higher prices to offset our transportation costs since our grain growing area is so far from port compared with other grain-exporting countries. Grain farming is viable on the prairies due to the higher prices we are able to command with our quality standard.
Canada’s grain grading system is the world’s most sophisticated and rigorous. It is authorized by the Canada Grain Act and implemented by the Canadian Grain Commission (CGC). Our farmers take their grain to a country elevator where it is priced according to grade (quality) and class (type). Each registered variety of wheat is assigned a class based on its end-use properties (good for bread vs. pasta vs. crackers, etc.). There are standards for grading every load of wheat (Grades 1, 2, 3, Feed and Sample) based on quality factors. Once the elevator purchases the grain, it goes into a bulk hopper at the grain elevator with other loads of wheat of the same class and grade. Later it goes into a rail car that takes it to port, and it is loaded onto a ship for export.
The USMCA breaks this system. It says our elevators have to accept US-grown grain, give a grade as if it was Canadian-grown, and allow it to be mixed with Canadian grain. Mixed shipments of US-grown and Canadian wheat sold as if they were 100% Canadian will undermine our Canadian brand and its quality premium. The CGC is responsible for upholding our quality standards, but would have no ability to enforce compliance if American growers violated our rules, as it has no authority in the USA. Quality issues that could result from US-grown grain include fraudulent sales of unregistered varieties, unauthorized pesticide residues and incidents of genetically modified wheat contamination.
The USMCA’s third paragraph on grain is a further attack on our grading system. It would force Canada to discuss with the USA “issues related to the operation of a domestic grain grading or grain class system, including issues related to the seed regulatory system associated with the operation of any such system.” This gives Americans a front row seat in our consultation process. Under the banner of “Seed Synergy” multinational seed and chemical corporations are aggressively lobbying for radical changes to our seed system. They aim to get rid of existing public-interest-based quality control measures and set up an “industry led, government enabled” system that would maximize the companies’ ability to control access to seed and increase seed prices and input costs for farmers. The Canadian Food Inspection Agency has held numerous consultations on our seed regulations. For more than two decades, results have always supported upholding our quality control system and regulating in the public interest. The USMCA undermines our seed sovereignty by giving the USA undue influence over Canada’s decisions.
Along with dairy producers, Canada's grain farmers are being asked to shoulder the burden of failed trade negotiations. We are giving away, to a foreign competitor, the capability to set the parameters of our grain trade. Given the federal government's hope that agriculture will lead the way in increasing Canada's export trade, it is incomprehensible that they are planning to hand the keys over to the United States. The section on grain in the USMCA cannot be allowed to remain.
Cathy Holtslander is the Director of Research and Policy for the National Farmers Union