As Saskatchewan flax acres have declined in recent years, this has had a negative impact on revenue for the flax commission.
SaskFlax Board Chair Gregory Sundquist said the loss of revenue and the departure of executive director Wayne Thompson had forced them to make some tough decisions.
Sundquist says SaskFlax had already announced it has entered into a new management collaboration with SaskCanola.
He said a resolution passed at the AGM states SaskFlax will seek input throughout the year on restructuring the flax levy to a percentage-based system of 0.5 per cent of gross sales, effective Aug. 1, 2024.
“Currently, our levy is $2.36 per tonne. As tonnage goes down, that has a major impact on the income we receive,” Sundquist explained. “Prices have moved quite a bit since that levy was set, so if we go to a percentage-based levy system, we have the ability to reflect the value of flax, and that value of flax will also determine the amount of income that comes to the commission.”
Sundquist pointed out the resolution is taken under advisement and will be the starting point of conversations with levy producers this year.
“On something as important as a levy increase, we have to work with our levy payers to find out if they think it’s appropriate or if they don’t and what the appropriate percentage of the levy is if we move forward with that.”
Sundquist said that even with its challenges, flax is a good crop option for growers.
“Flax has a good net return. It’s a little cheaper to grow and you can get a decent yield and there are some great varieties coming out,” he said. “It is a good crop for rotation, and it has a good return, and if we can increase the demand, I think it will be a very profitable crop for Saskatchewan farmers.”
The canola and flax levies from producers will continue to be collected separately, and SaskCanola and SaskFlax will maintain individual Board of Directors and separate governance structures.