What good is a statutory right to a producer car that can’t be loaded or unloaded?
That’s the question former National Farmers Union (NFU) president Terry Boehm wants answered.
It’s also why the NFU wants C-49, the Transportation Modernization Act, amended to protect and enhance farmers’ access to producer cars — rail cars farmers load themselves, bypassing country elevators saving the farmers money.
The NFU proposes establishing ‘Grain Car Receivers’ at the West Coast and Thunder Bay, to direct a producer car to whichever grain terminal has space. The receiver, which farmers could pay for through a handling fee, would get the Canadian Grain Commission (CGC) to grade the grain. Any discrepancies in space allocations and sales could be cleared up on a monthly basis by the receiver.
“The opportunity for producer cars is shrinking in the true sense of what a producer car was in terms of (loading) sites and in terms of destinations (for unloading),” Boehm said in an interview March 16.
“More and more what is happening is the producer car is becoming a dealer car, going through a grain company system and it ends up at that particular grain company’s terminal. So that true alternative and discipline (from using a producer car) in terms of pricing and costs is being eroded significantly. I suspect it will, in time, disappear as an option simply because of the lack of viable loading sites et cetera.
“It would give some independence to farmers as far as knowing they had a port to receive their cars. And if basis and elevation charges got too far out of whack they would start demanding more (producer) cars to send to the grain car receiver.”
Both CN and CP Rail have been closing producer car loading sites — sidings where a car can be spotted and loaded by farmers using trucks and augers.
The CGC allocates producer cars on a first-come, first-served basis, although car supplies are sometimes rationed by the railways when demand outstrips supply.
Producer cars can be shipped across Canada and into the United States and are not restricted to West Coast ports and Thunder Bay.
But before allocating a producer car, the farmer must have a confirmed sale and destination for where the car will be unloaded.
“After the application is completed, the producer will be asked to verify, via email, a confirmed sale,” the CGC website says, a prerequisite to avoid port terminal congestion with unwanted cars and grain.
That requirement seems to make the NFU’s proposed grain car receiver redundant. But Boehm counters that the idea has merit so as to ensure grain companies continue to receive producer cars if they have space.
According to Boehm, producer car use has declined since the Canadian Wheat Board lost its single-desk marketing powers on Aug. 1, 2012.
CGC records show the decline is more recent. In fact in 2013-14 — the second year of an open wheat and barley market in Western Canada and the year of a massive grain shipping backlog — producer car numbers set a modern record at 15,218. That was up significantly from 9,257 cars in 2012-13 — the first year of the open market.
In 2014-15 producer car numbers fell to 9,867. They fell again in 2015-16 and 2016-17 to 5,871 and 5,519, respectively.
As of week 34 this crop year 3,322 producer cars had been shipped, versus 5,010 during the same period last crop year.
The most producer cars allocated ever was 51,000 in 1912-13, but that was at a time before elevator numbers peaked in Western Canada. Also boxcars are smaller than today’s hopper car.
Western Canadian grain farmers have had the legal right to order and fill a rail car with their own grain and ship it to market for more than 100 years. Early in the last century grain companies that built faster-loading elevators, instead of so-called flat warehouses, received preferential access to cars. Farmers complained and the federal government amended the Manitoba Grain Act in 1902 making it law that cars be allocated on a first-come, first-served basis. When CP Rail ignored the law farmers took it to court and won, giving them access to cars and the ability to bypass country elevators.