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Kinder, gentler CGC not what the doctor ordered

by Paul Beingessner
Canadian farmer, writer

(Tuesday, Feb. 17, 2004 -- CropChoice guest commentary) -- Recent comments by the Chief Commissioner of the Canadian Grain Commission to a Manitoba journalist would be funny if the consequences weren't so significant. The story focused on the failure of the CGC to enforce its own licensing regulations for grain dealers. This issue is familiar to grain companies but perhaps not so well known by farmers.

Under the regulations of the Canada Grain Act, grain dealers and companies that buy and sell grain by grade must be licensed and carry a bond to cover their liability to farmers who have delivered grain. Failing to do this is a violation of the Act and can be prosecuted as such.

There are, however, grain dealers across the prairie provinces that are not licensed. Some of these are large companies that have been in business for years. Several have gone bankrupt recently and farmers have been left holding the bag. The result has been at least one lawsuit against the CGC by farmers who want it held liable for failing to do its job.

In going after reluctant grain dealers, the CGC has shown a remarkable lack of gumption. One CGC official related a story to me about a large special crops dealer in northwestern Saskatchewan that had been ignoring demands that it be licensed for more than five years.

In the face of such refusals, the CGC has adopted an odd policy - when all else fails, write another letter. Even this appears half-hearted when we have the head of the CGC telling a reporter that "there is a segment of producers who believe we should operate in a seller-beware atmosphere". The clear implication is that we should run a popularity contest to determine if we enforce laws. Now, if only Revenue Canada could be enticed to take a similar approach to its job!

The Chief Commissioner offered a second excuse for the CGC's passive approach. The act that governs the CGC does not contain penalty clauses. The only legal route to dealing with violations is to call in the RCMP and take the offender to court. Too costly and time consuming, says the Chief.

Mind you, the CGC's wimpish approach to grain dealers is consistent with other actions in the past. It has demonstrated a similar reluctance to enforce its act in dealing with deliveries of unlicensed grain into the elevator system. Such deliveries cost Agricore United and Saskatchewan Wheat Pool dearly in recent years. Though the violators were well known, and there was vigorous debate within the CGC over its inaction, in the end it was all deemed too difficult.

It leads to an interesting philosophical debate over the rule of law. Laws and regulations sometimes become antiquated and inappropriate. When this happens, judges and law enforcement officials often simply ignore them. This would seem to be the argument made by the Chief Commissioner when she says that enforcing the Act, and shutting down violators would reduce choices for farmers. The law, it appears, is no longer appropriate.

This might even be a valid opinion if it were widely held. But the opposite is true. Farm groups have been quick to condemn the CGC's attitude and individual farmers who have sued the Commission surely do not agree with it. Even grain companies complain that the lax enforcement leaves the playing field uneven.

The Chief's point about the difficulty of enforcement is valid. But given that, where are the complaints from the CGC to the Minister of Agriculture? Where are the briefs outlining the need for a penalty act? Where are the consultations with farmers and farm groups to determine the general view on this matter?

The only reason the hue and cry from farmers is not louder is because, knock on wood, there have only been a few failures of grain companies, licensed or unlicensed. That does not mean there is no problem. Just ask the farmers who have been all but driven from the business when they lost a whole year's crop to a bankrupt grain dealer.

Since the CGC seems content with its role as toothless tiger, it will once again be up to farm groups to push for the changes that are needed. With the latest Statistics Canada figures showing that the farm economy in Canada is about as bad as it can get, more company failures may not be far off. With a new minister in Ottawa, it could be a good time to ask that the CGC be given a backbone.

(c) Paul Beingessner (306) 868-4734 phone 868-2009 fax