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Railway Overpayments Remain In Limbo

“What can I do to leave a legacy to Western Canadian agriculture? This is it.”

– Ed Rempel

Agriculture Minister Gerry Ritz says the federal government won’t consider any action on a request to refund railway overpayments to farmers until a court case in concluded.

“The money has been put in a trust while the railways appeal the CTA decision,” Ritz said in an interview. “The railways took a gamble in continuing to charge high rates toward the end of the last crop year.”

Even if the government agreed the money should go to farmers, an idea to which Ritz seemed lukewarm, it would require amendments to the Western Grain Transportation Act, a process that could easily take a year or two.

The CTA in late December ruled CN exceeded the cap by $25.9 million and CP went over by $33.8 million. The federal regulator also fined CN and CP by $3.9 million and $5 million respectively. Under federal law, the overpayments and fines are to go to the Western Grain Research Fund.

Farm groups are divided over how best to allocate the funds with Keystone Agricultural Producers becoming the latest group to weigh into the debate.

The issue figured prominently at KAP’s annual meeting – 25 years after its predecessor, the Manitoba Farm Bureau, collapsed under the weight of another debate over compensating producers directly or indirectly.

Delegates last week passed a resolution in favour of paying the WGRF after a lengthy and sometimes intense debate.

Several KAP delegates warned some producers feel strongly the money is theirs and they should have it.

“There are farmers that want this money back,” said Wilfred Harder of Lowe Farm.

But others said giving the money to the WGRF would reap long-term benefits through more research.

“What can I do to leave a legacy to Western Canadian agriculture? This is it,” said Ed Rempel.

Added David Rolfe, KAP past-president: “I don’t think we’d ever get a better investment for being overcharged by the railways.”

However, Don Dewar, another former KAP president , warned the money might not be available for up to five years, now that the issue is before the courts.

The meeting defeated an attempted amendment to have the overcharges paid to producers and the penalties to the WGRF.

The Canadian Wheat Board, Western Canadian Wheat Growers Association and the Western Grain Elevator Association want the money returned to producers.

CWB CEO Ian White says the overpayments amount to thousands of dollars for larger farms. “We are asking that the federal government to find a way to channel the money back to producers.” He says the magnitude of the overpayment merits an exemption from the WGRF funding requirement. Farmers saw grain freight rates rise by eight per cent cent during the 2008 calendar year.

Grain Growers of Canada has asked the WGRF to tell farmers what it could achieve with the $68 million.

President Doug Robertson said $68 million invested at three per cent would yield about $2 million a year in perpetuity. With 50 million seeded acres, even if yields were increased by half a bushel an acre that would pay farmers their money back, each and every year for a one-time investment, he said.

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