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A grain harvest just north of Calgary near the town of Balzac.Larry MacDougal/The Globe and Mail

Few Canadians have probably ever heard of the Canadian Grain Commission, a 100-year old federal agency that's largely responsible for regulating grain quality and safety.

For decades, the Winnipeg-based commission has been funded largely by the federal government and it offered a range of services including inspections, grain quality assurances and scientific research. All that is about to change.

The federal government has announced a major overhaul of the commission that includes dropping some of its duties, slashing most of its funding and cutting its staff. The commission will move to a user-fee system, generating nearly all of its revenue from fees charged to farmers and grain companies for its services. "It will certainly be a much smaller organization," said commission spokesman Rémi Gosselin.

The agency recently released a consultation paper outlining proposed fee increases for the next five years, catching some farmers off guard with the size of the hikes. According to the paper, the agency's fees will jump by $16-million next year to $54.3-million in total. Those fees will rise to more than $57-million by 2017.

Government funding, meanwhile, will fall to $5.4-million annually. Last year, the commission received $45-million from the government to cover its operations and raised about $37-million from user fees, bringing its total budget to $82-million. Under the new plan, the commission's budget will fall to about $62-million annually with all but the government's $5.4-million coming from user fees.

The agency said it will save some money by streamlining operations and dropping a service known as "inward inspection and weighing." That type of inspection occurs when grain arrives at port terminals from elevators and it verifies the quality of the grain. The agency along with many agricultural groups believe the service is outdated and redundant. Grain will still be inspected for quality before it is exported and monitored for safety, the commission said.

Many farmers welcome the changes, arguing that the commission badly needs to be modernized. But others worry about the impact of the fee increases and the move to a more private-oriented organization.

"I'm just not sure if Canada is going to be able to offer the quality assurance to our customers that we've had in the past," said Bill Gehl, a Saskatchewan farmer who chairs the Canadian Wheat Board Alliance, a group opposed to the government's decision to end the Canadian Wheat Board's monopoly over the sale of wheat and barley grown in Western Canada. "We are going to see farmer's costs go up and we're going to have a lot less assurance for ourselves and for our customers. So it's really kind of a lose-lose situation here."

Doug Chorney, president of the Manitoba-based Keystone Agricultural Producers, said he has been pleased with many of the changes, but he is also worried about the amount of the fee increases. "This will all be paid for by farmers, so I'm a little bit concerned about that," he said.

Mr. Chorney said he has no problem with users paying for services, but he believes the government should continue to fund commission programs such as research. However he doesn't think that will be possible with just $5.4-million in federal funding.