Farm Credit Corp. will help finance farmer takeovers of short lines that have a solid business case, says president and CEO Greg Stewart.
“We’re going to be receptive to doing more of that in the future,” he said while answering questions from Manitou, Man. farmer Robert McLean during the annual meeting of the Canadian Federation of Agriculture.
In a later interview, Stewart said FCC has already lent $45 million to one group of Prairie farmers to acquire a line. “We would support any investment that supports agriculture. That would certainly include a short line that helps farmers move grain cars.” It could also finance a locomotive for a short line already owned by producers.
Of course any proposal needs to have a good business case, Stewart added.
McLean was buoyed by the answer. He said in an interview that loading producer cars on their own rail line can save a farmer at least $1,000 in transportation costs. He belongs to a group of 35 farmers that purchased a 25-mile branch from Morden to Manitou last year. In its first year, it handled 500 cars.
“At that level, it’s a break-even proposition for us,” he said. The group hopes to boost that figure this year as well as attract inbound shipments of fertilizer and other farm supplies. A loading facility has been built at Manitou.
He said the ability to get financing from FCC will make it a lot easier for farmers to gain control of lines the main railways no longer want.