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Farmers split over revenue cap excess

“This is an excellent opportunity for Western Grains Research to share its vision of what could be done with this money. “

– Doug Robertson

Farm groups continue to disagree over what to do with the $59.8 million the railways owe them after overcharging to ship grain in 2007-08.

Last week the Western Canadian Wheat Growers Association (WCWGA) said the money should be returned to farmers, while the Saskatchewan Canola Growers Association (SCGA) said it should go to the Western Grains Research Foundation (WGRF) as required by law.

Meantime, the Grain Growers of Canada, which both the WCWGA and SCGA belong to (the latter through the Canadian Canola Growers Association), wants the WGRF to explain what the money could do to enhance research and benefit western grain farmers.

Regulations under the Canada Grain Act require the money, plus a 15 per cent penalty (bringing the total to $68.7 million) go to the WGRF where the interest earned would be spent on crop research.

However, nobody, including legislators, ever expected the railways to exceed the cap set on the revenue earned from grain shipping by so much. Until this year overages were never more than a few million dollars or 20 cents a tonne. In such cases the costs of returning the money to farmers would have exceeded what they were owed.

But with farmers now owed so much – an average of $2.23 a tonne of every tonne they shipped – the Western Grain Elevator Association earlier this month said the money, not including the penalty, should be returned to farmers, either directly or by cutting rail rates this crop year.

The Canadian Wheat Board (CWB) said it favours the same. It has a record of what farmers were charged for shipping wheat board crops, but since freight charges are part of the basis in non-board crops freight charges won’t be as easily determined.

“We want that (money) back in our pocket,” Oakville-area farmer Bob Murray told CWB president and CEO Ian White at Ag Days Jan. 22. “I don’t know how that’s going to happen, but you’ve got to take the lead somehow through a website or get to the government. That money has to come back to our pockets.”

White agreed.

“There is no question research is important, very important. However, our basic philosophy on this is that you were overcharged and there should be found a way to get it back to you,” White said.

However, Somerset-area farmer Bill Acheson said he doesn’t want a third or more of what farmers are owed eaten up by administration costs.

“Just keep that in mind please,” he told White.

In an interview later White said he doesn’t believe getting the money back to farmers should cost that much.

“There are a number of ways of doing this and our view is there needs to be quite a lot of discussion and debate to make sure farmers support whichever direction is taken here,” he said.

The Grain Growers of Canada is calling on the WGRF to make the case why it should get the money.

“This is an excellent opportunity for Western Grains Research to share its vision of what could be done with this money,” GGC president Doug Robertson said in a news release. “Sixty-eight million dollars invested at three per cent would yield about $2 million a year, every year. What value can that bring to farmers?”

If crop yields could be increased by a half-bushel an acre farmers would get their money every year for a onetime investment, he said.

CTA regulations can be amended by the federal cabinet, but some observers question whether the government wants to change the rules for what might be a unique anomaly. Meanwhile, the money could be tied up in court as the railways challenge the legality that led to them exceeding the cap by so much – a change in the costs allowed for maintaining the federal government’s hopper cars.

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About the author

Reporter

Allan Dawson

Allan Dawson is a reporter with the Manitoba Co-operator based near Miami, Man. Covering agriculture since 1980, Dawson has spent most of his career with the Co-operator except for several years with Farmers’ Independent Weekly and before that a Morden-Winkler area radio station.

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