USMCA goes against Canada’s grain

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.