Membership crisis rocks Cereals Canada

Glacier FarmMedia—Several members of Cereals Canada are on the verge of quitting the organization, jeopardizing plans to build a major new ag tech centre in Winnipeg.

The official launch of the funding campaign to establish the Global Agriculture Technology Exchange (GATE) has been postponed, with Cereals’ Canada’s June 27 board meeting expected to clarify which members are staying and which might leave.

One medium-sized grain company has definitively decided to leave the organization, a large one has triggered a two-year option to depart if it chooses and other grain companies may have also triggered two-year potential-departure options, sources say.

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Both North West Terminal and Cargill told the Western Producer that financial considerations are behind their decisions to reconsider their participation in Cereals Canada.

Cargill “continuously evaluates” its memberships in industry organizations and since it is required to give two years notice if it might leave, it supplied that on June 1.

“No final decision has yet been made that Cargill will withdraw from the organization,” says a statement from Cargill.

“We will continue to be committed participants in Cereals Canada over the next two years and are eager to engage in strategic planning and membership review discussions as we assess our membership in the future.”

Major multinational seed and crop protection companies are also mulling departures and planned to discuss the situation around this week’s annual Cereals Canada board meeting.

Farmer-based organizations appear to be mostly on-side with Cereals Canada’s plans in their broad outline, if not with every detail.

The GATE is designed to “contain state-of-the art analytical milling, baking, noodle- and pasta-making, malting and brewing, oat processing and educational training facilities to support and train global customers about the quality, functionality, safety and sustainability of Canadian grains,” according to promotional material for the proposed centre.

Cereals Canada is the successor organization to the Canadian International Grains Institute, which operates today’s version of the GATE’s proposed functions. Current facilities, in an office tower not designed for industrial and scientific uses, has long been recognized as inadequate, constricting and unfit for future uses. The Canadian Grain Commission, which also resides in the same office tower, does not have the room it needs to conduct all of its function and has moved some to other facilities.

Cereals Canada said it needs to begin making plans now.

“Cereals Canada’s current building lease is expiring on March 31, 2027, with no option to renew,” said a statement from the organization.

“With this date fast approaching, a new home is needed to continue to build on the vital work to advance the Canadian grains value chain. Creating a new state-of-the-art facility will allow Cereals Canada to continue to offer best-in-class technical expertise to support Canadian farmers, as well as domestic and global customers.”

The plan involves constructing a new building, probably between the Richardson building at Portage and Main and the new Richardson Innovation Centre in the heart of downtown Winnipeg, on what is today a surface parking lot beside the Fairmont hotel. Most Winnipeg-based grain companies are within a few blocks of the proposed location, as are Cereals Canada and Agriculture Canada.

The GATE plan is a surprise for some grain industry players since it follows only a few years after a consultant’s report into the need for better facilities. That report found building a new structure from scratch was the least attractive option of those considered.

It also confounds those who believe other locations in Winnipeg or elsewhere on the Prairies should be considered. The University of Manitoba campus houses a critical mass of agriculture research and development departments and private companies and is seen by some as a more natural home.

The Wheat Growers Association has attacked the plans for the GATE, highlighting the large amounts of vacant office space in post-pandemic Winnipeg that could be used to house improved facilities without the costs involved in a major capital project.

The desire to build an integrated crop industry centre goes back decades in Winnipeg, with many seeing the city’s plethora of agriculture organizations, agencies and companies providing a critical mass of expertise that could benefit from closer physical co-operation. Both federal Liberal and Conservative governments have been supportive of the idea.

However, the cost of building a new centre has seen the hopes punted from one federal government to the next since the early 2000s and now is not primarily seen as a government-driven project, especially with farmers and industry controlling Cereals Canada today.

Grain companies are not on very good terms with each other right now, sources say. The western Canadian drought years hammered profit margins following extensive re-investment in their grain-handling systems. For some, the idea of a major new industry project today is poorly timed.