Hursh Consulting & Communications Inc.

The grain transportation backlog has put Statistics Canada field crop reporting under the microscope. Why didn’t we know that a huge crop was coming last year? How were the railways supposed to gear up when initial estimates were tens of millions of tonnes below what was actually produced?

Suddenly, the entire industry has a graphic example of why accurate yield and production estimates serve useful purposes. Whether the railways would have heeded the production forecasts is another question, but not having accurate information soon enough gives them yet another excuse for not mobilizing adequate resources to do the job.

Agricultural economist Richard Gray has suggested a network of agrologists doing yield determinations across Western Canada during the growing season as a replacement for the Stats Can farmer surveys. It’s his contention that farmers can’t always accurately estimate their potential production.

While some official yield determinations at benchmark locations may be a useful addition to production forecasts, a bigger part of the solution is fixing how Statistics Canada operates. They do thousands of surveys with farmers in each province multiple times during the growing season, but in many ways they’re stuck in the past and mired down by process.

It’s rare to find a farmer who likes Statistics Canada and who thinks their field crop reporting is a useful service. The process for this year is just beginning. In recent weeks, Stats Can has been badgering producers for their seeding intentions. Many farmers either try to avoid the calls or lie through their teeth.

Since the survey taker typically knows nothing about agriculture, they’ll accept stupid answers and not realize they’ve been scammed.

In the minds of most farmers, survey results just drive down market prices. The result of the seeding intentions survey will be released by Stats Can on April 24. Whatever crops are showing a larger acreage increase than expected will be targeted by analysts as crops that may see pricing pressure.

There’s never been a public relations exercise to convince farmers that good information is valuable to the entire industry. If there was no government survey, you can bet that grain buyers would be making their own internal estimates and those results wouldn’t be shared with producers.

There’s no use surveying producers who don’t want to participate. Explain why good information is useful and seek the cooperation of competent growers who agree to be part of the process. Even pay them a bit for their time and effort.

Most importantly, Statistics Canada has to join the 21^st century. They need to use the tools available to dramatically shorten the time between collecting information from producers and when the data is tabulated and released.

The way it is now, the information is old and out of date by the time it’s announced. A few weeks of lag time can make a big difference in acreage estimates in the spring and it can make a huge difference in yield estimates in the summer and fall. 

On many of the minor crops, acreage estimates obtained through surveys have long been suspect. Seeded acreage information from crop insurance should be used to verify the survey results coming from producers. If you can’t get the acreage right, your production estimates won’t be accurate either.

Satellite imaging should also play a role, but it shouldn’t be viewed as a replacement for talking to people on the ground.

The whole process needs a shake-up from process to public relations.

By August, the federal government plans to pass legislation strengthening Plant Breeders’ Rights so that this nation will finally conform to the international UPOV’91 treaty. The National Farmers Union continues to raise alarm bells over the change and their fear mongering resonates with those who like to view farmers as the victims of big business.

Most of the hubris surrounds the ability of farmers to save their own seed, but in truth many farmers are not fully aware of how the current rules work, let along what the changes will mean.

Most varieties of wheat, durum, barley, oats and flax are currently protected by Plant Breeders’ Rights meaning you can save seed for your own use, but you can’t sell or trade the seed to another producer. Just check the seed variety guide. 

In practice, regulators typically go after those making significant sales of protected varieties, but it’s still illegal on a smaller scale.

Under the updated legislation, the ability to save and use your own seed is specifically granted under Farmer’s Privilege, but the naysayers claim that just calling it a privilege shows it’s something that could be removed.

The regulators say they wrestled with the term privilege, considering farmers’ exclusion, but what you call it is less important than the practical ramifications.

Currently, there are many instances where farmers give up the right to save their own seed. In many closed loop production systems, there’s a requirement for producers to use certified seed and to sell all of the production back to the company. No seed can be retained.

Farmers judge the merit of these contracts and don’t get hung up on saving seed if the overall opportunity is to their liking.

With canola, virtually no one is interested in saving their own seed. With hybrid seed, many of the benefits are lost in subsequent generations. Besides, the seed treatments used for canola are not approved for on-farm application.

There are lots of complaints over the price of canola seed, but the crop dominates Western Canada’s acreage because it typically generates some of the best returns.

On the cereal grains, we’re used to most of the varieties coming from public breeding programs. Producers buy certified seed when they want to try a new variety, but after that they usually save their own seed from one year to the next.

The federal government is withdrawing from variety development on many of the major crops. Private companies are investing to fill the void and they say the improvements to breeders’ rights will increase investment.

Will the new legislation actually lesson the ability of producers to save their own seed on the crops where the practice remains prevalent? The legislation by itself won’t, but subsequent regulations could eventually curtail farmers’ privilege.

Officials promise this would only happen after extensive consultation, but it’s certainly possible in the years ahead. This also opens the door to end point royalties on farmer saved seed. 

As we move to UPOV’91 and beyond, there will be more varieties that will benefit farmers, but farmers will be paying for them. There’s no free lunch. 

Canada is one of the last developed nations to move to UPOV’91 standards. It’s been talked about since the original legislation died on the order paper back in1999. While the modernization is long overdue, as farmers we’ll also need to modernize our attitude. The private sector won’t invest without a way to recoup their money.

There are no easy answers, no quick fixes to the grain logistics backlog, but make no mistake, the primary source of the problem lies with the railways.

They haven’t supplied enough cars and locomotives to match the huge crop that needs to move. Even if they allocated more resources to grain movement, some observers say they don’t have enough trained engineers to run the additional trains.

No doubt West Coast ports have their own issues, but export terminals have lots of empty space while scores of vessels wait to load. The grain just isn’t arriving in time to meet sales commitments.

Yes, there are system and communication issues involving the entire logistics chain, but the most pressing need is to increase rail capacity and that leads to discussions about changing or removing the grain revenue cap.

Unfortunately, misconceptions abound over what the revenue cap entails and how it works.

The formula takes into account the amount of grain hauled and the average length of haul. Thus, the revenue cap is not a disincentive to move greater volumes. The cap rises in tandem with volume moved.

When the railways exceed the cap and have to pay the excess to the Western Grains Research Foundation, it’s because they set their rate per tonne a bit too high.

A volume related composite price index is also part of the annual formula. It accounts for any increase or decrease in labour, fuel and other expenses.

Cost changes move the revenue cap up and down in relation to the base year of 2000-2001, but a lot has changed since the cap was set. Many argue that with fewer elevators and more movement in large car blocks, the railways have benefited from efficiency gains and that there should be a new costing review.

Others are convinced that the only way to get better service is to let the railways charge higher rates. After all, they argue, high freight rates would be no worse than the ridiculously wide basis levels being subtracted from grain prices.

Elevator companies are paying demurrage on ships that have been waiting for weeks on end. A widening basis should be a disincentive for producers to sell, but producers have remained anxious to move grain despite dropping values. As a result, many companies have stopped buying, posting no bids for nearby months.

It’s important to note that the revenue cap does not apply to grain moving south into the U.S. and Mexico. Nor does it apply to grain moving to domestic destinations such as the Fraser Valley. And yet service outside of the revenue cap doesn’t appear to be any better.

And many other sectors also complain about rail service. For years, the Coalition of Rail Shippers involving all the main exporters fought for the right to have service level agreements with the railways. Unfortunately, the legislation fell short of what is needed to actually make a difference.

People point to the U.S. where there’s a bid system for cars as proof that paying more means you’ll get better service. However, there are big differences between the two countries. America consumes much more of its grain domestically and they also have the Mississippi River system for a great deal of their exports.

Before we volunteer to open our wallets to CN and CP, lots of questions need to be addressed. Giving the railways the ability to charge what they want is no guarantee of improved service.

Slowly, but steadily, the anti-GMO forces are winning. For evidence, you need to look no further than the decision by General Mills to make its original Cheerios non-GMO.

Social media has become the dominant public relations weapon and the anti-science crowd used it to effectively target Cheerios over the past year.

The ramifications may seem rather insignificant. Cheerios are mostly made from oats and oats aren’t a GM crop. The switch just means that the corn starch has to come from non-GMO corn and the one gram of sugar per serving has to come from sugar cane rather than sugar beets.

But for a big company churning out a large number of products in a competitive marketplace, this is a big deal. New sources for these ingredients must be found and they have to remain segregated within the production process.

The consumer is always right and increasingly consumers are fearful, non-scientific and accepting of conspiracy theories. Big business is bad, you can’t trust government agencies, natural has to be better, and the old ways were always healthier.

Consumers with an open mind who are willing to listen to both sides of the argument end up not knowing what to believe. Just in case there’s any credibility in what the anti-GMO zealots are saying, they typically decide to err on the side of safety and caution.

When anti-GMO activist Mark Lynas changed his mind and admitted he had been wrong about GM foods, it was a glimmer of hope that perhaps reason would eventually prevail. Alas, the overall tide of public opinion is shifting to the side vacated by Lynas.

For now, most GM labelling proposals have been defeated, but the proposals will just keep coming.

Recently, the Island of Hawaii banned genetically modified crops with the exception of papayas. Genetic modification has saved papaya farms on the island from a devastating disease, but that wasn’t enough to stop the majority from believing that GM has to be evil.

Groups such as Green America and GMO Inside are hailing the Cheerios decision as a major victory, noting this is the top selling cereal in the U.S. But of course, they want General Mills to go even further and make all Cheerios non-GMO.

To its credit, General Mills is defending the safety of GM foods. According to the company, the switch to non-GMO in original Cheerios is simply “because we think consumers may embrace it.”

Still, the anti-GMO crowd is no doubt emboldened. They are proving that fear can trump facts and even big companies have to be mindful of public opinion.

So what are the practical implications for farmers?

Most of Canada’s oats are exported to the U.S. General Mills helps fund variety research work in Western Canada. If original Cheerios becomes a big hit, that could increase the demand for oats.

If you’re hoping GM wheat will someday be approved, prepare to be disappointed. Unless the world becomes very hungry, it isn’t going to happen with wheat, pulse crops, or any other crop where the technology hasn’t already been adopted.

Expect more marketplace disruptions like the recent rejections of U.S. corn shipments by the Chinese due to a GM trait that hasn’t been approved in China.

Expect demand for Clearfield canola to continue increasing. It’s non-GMO.

It’s difficult to predict how quickly the anti-GM wave will wash over our cropping practices, but make no mistake. The wave is coming.

Notice to A&W. You have lost my business. Even though you have rural restaurants that I’ve often patronized, I’ll try my best to eat elsewhere from now on.

Major players in the food business are increasingly making decisions that have no basis in science. A&W says their burgers are better because the beef has been produced without the use of hormones. Even if they have to get the beef from outside of Canada, it’s going to come from hormone-free producers.

This is a carefully calculated business decision. No doubt A&W will have to pay a small premium to source their beef, but they now have a new marketing tool to differentiate themselves from the other burger chains. They think they can gain market share and more than compensate for any extra costs.

Their plan is predicated on keeping existing customers and gaining new ones. Well, this existing customer is leaving. Maybe if enough like-minded people did the same, food suppliers would rethink their attacks on science.

The President’s Choice line of Products from Galen Weston is also on my try not to buy list. It’s the same reason that I balk at organic and all-natural products, although at least an organic label has some established standards.

Imagine two virtually identical-looking food products side by side in the grocery store. They are the same price, but one is labelled organic and one is not. Which one do you buy? I buy the non-organic. In fact, I’d even pay more for non-organic.

Organic doesn’t necessarily mean local. It isn’t any safer as numerous organic food recalls have proven. It may or may not have a lower carbon footprint. And it’s deceitful because the label implies a product that’s safer and better for the environment.

And then there’s the GMO issue. While visiting the left coast (B.C.) for a conference, we had breakfast at a small resort café. The tomato slice had green streaks. The manager explained that this was an heirloom variety, not genetically modified like regular tomatoes you see in the store.

I didn’t bother telling him that there are no genetically modified tomatoes in the marketplace, nor that regular plant breeding has worked to improve plant varieties for hundreds of years.

The non-GMO crowd is horribly misinformed and they don’t want to be confused by the facts. The fight to get GMO foods labelled isn’t about choice. It’s a way to bash science.

Folks that want their foods organic and GMO free tend to be the same folks who think raw unpasteurized milk has to be better for you.

Choice is good and everyone is entitled to their opinions, but it really irks me when food promotion campaigns spread falsehoods. Food wasn’t safer ten or twenty or thirty years ago. Many of those old-time production practices had inherent health dangers.

And whether it’s a hormone, an antibiotic, a pesticide or a genetic modification, tens of millions of dollars are spent on extensive scientific scrutiny before anything is approved for the marketplace.

Our society faces important food-related issues. Many of us eat too much and a lot of it is junk. As far as safety goes, the biggest risk comes from how foods are stored and prepared in the home.

All-natural, hormone-free, organic and non-GMO are distractions from the real issues.

These nonsensical food offerings are becoming more main stream, but I’m going to make a conscious effort to avoid them. Want to join me?