Thorough examination of rail transportation needed: KAP

Long-term solution to sluggish rail transportation may require new infrastructure, 
but in the short term, producers should re-evaluate the terms of their operational loans

Keystone Agricultural Producers meeting in Winnipeg called on the federal government to fine the railways for failing to perform as Prairie farm leaders worried creditors will come calling on farmers who can’t sell grain to make loan payments.

With many bins still full, and grain bags lying in fields across the Prairies, some producers won’t be able to repay last year’s input loans, says Norm Hall, president of the Agricultural Producers Association of Saskatchewan.

“Input loans that are coming due at the end of this month, and we put it out to producers… have you talked to your financial institutions? Can you make those payments?” said Hall, speaking at the annual Keystone Agricultural Producers meeting in Winnipeg.

“Some of the contracts that you’ve signed, you get five per cent interest, but if you go past that deadline, it more than triples, and… if you go into default, you may not be eligible for financing next year.”

But the responsibility doesn’t lie solely with producers, farm organizations across the Prairie provinces have asked financial institutions to extend the terms of operational loans.

“We’re running into the same problems, and have spoken to FCC (Farm Credit Canada),” said Lynn Jacobson, president of the Alberta Federation of Agriculture.

And while FCC has been open to extending loan terms for producers struggling to deliver grain, Jacobson said other financial institutions have not been as receptive.

Doug Chorney, president of Keystone Producers, said the same situation is being faced by farmers in Manitoba who are fighting to get grain off the farm.

“There’s a huge cost to producers,” he said, adding that the recent decline in commodity prices is compounding financial pressures faced by producers in Western Canada.

Describing friends and neighbours as “shell shocked” by the sharp drop, Chorney noted the market price for some crops has fallen by almost 50 per cent from the same time last year.

However, much of the pressure on Prairie farmers could be relieved if grain was flowing out of the bins predictably and efficiently.

More from the Manitoba Co-operator website: Grain transportation a hot button among wheat growers

“We’ve been watching the trains go by… and it used to be a few cars of containers and a few cars of bulk commodities,” said Hall. “Now it’s lots of black tankers.”

Members attending the annual Keystone meeting questioned whether rail companies weren’t passing grain shipments by in favour of higher-value cargo, such as hydrocarbons.

Others in attendance noted that the loss of single-desk marketing has left producers with less power to negotiate with rail companies.

“What they used to do in this kind of situation — it wasn’t perfect — but they would get together with industry on a weekly or bimonthly basis and allocate the cars so everyone can get their fair share of access,” said Wilf Harder. “At least that way everybody would have some opportunity to deliver, of course we’re away from that now.”

Chorney warned against oversimplifying the problem.

“The railroads have to make money, farmers have to make money, everyone has to be successful together,” he said. “There is important work to be done to define the problem properly and respond to it properly, a lot who are looking at it as farmers want immediate response to our problem, but the fact is this problem wasn’t created overnight and it won’t be solved overnight.”

But in the meantime, farmers can’t be asked to carry the burden alone, Chorney said, adding assistance should be provided by both levels of government.

About the author

Reporter

Shannon VanRaes is a journalist and photojournalist at the Manitoba Co-operator. She also writes a weekly urban affairs column for Metro Winnipeg, and has previously reported for the Winnipeg Sun, Outwords Magazine and the Portage Daily Graphic.

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