A coalition of Saskatchewan farm groups says western Canadian farmers lost an estimated $3.1 billion last crop year and could lose $2 billion this crop year because of a broken transportation logistics.
The coalition formed by Saskatchewan Pulse Growers, the barley and wheat development commissions and Agricultural Producers Association of Saskatchewan (APAS) submitted nine recommendation to the Canadian Transportation Agency last week in a bid to improve how the system works for farmers.
“Major adjustments need to be made to ensure farmers are treated fairly in a transparent environment with long-term commitment,” APAS president Norm Hall said in a Dec. 1 news release. “The coalition hopes that other organizations and individuals will respond to the call for submissions (before the Dec. 31 deadline.”
Its recommendations are based on four objectives — fostering competition, increasing market transparency, being positioned for future growth and ensuring producers have a voice in the transportation system.
The recommendations call for a full review of railway grain-moving costs before adjusting the maximum revenue entitlement program, a higher priority placed on producer cars and for the creation of a rail operations oversight group that includes farmers.
The coalition says in its submission the billions of dollars farmers lost due to delayed grain movement in 2013-14 is based on a report prepared by University of Saskatchewan agricultural economist Richard Gray. Western farmers received $135 a tonne less than they should have based on a comparison of elevator and port prices.
The coalition says for an open market to function it must be more transparent. American farmers have a lot more access to grain pricing and rail movement information.
The Canadian transportation system is not working for farmers, the coalition says. “This has jeopardized producer profitability and lowered the prospects of sector growth,” the coalition’s submission says.
“We have neither effective competition nor regulation that can give us an effective voice and fair treatment.”
The coalition also fears that despite the federal government’s promises, producer cars are not protected.
“We have concerns that over time the railways and grain companies will reduce their access to the infrastructure and remove this competitive tool for farmers,” the coalition says.
The coalition’s recommendations are as follows:
- Costing Review: It is recommended that the CTA Review Panel call for the completion of a formal costing review and adjust the maximum revenue entitlement accordingly.
- Maximum Grain Revenue Entitlement: It is recommended that in their consideration of the CTA, that a commitment is needed from the federal government that the maximum revenue entitlement will stay in place to ensure fair compensation to railways for hauling grain.
- Information Requirements: It is recommended that the CTA and/or other legislation be amended to provide mandatory information reporting for the grain-handling and transportation system to function effectively.
- Rail Oversight: It is recommended that the CTA create a rail oversight group that includes agricultural producer representation, to assess ongoing operations of the railways.
- Arbitration Process: It is recommended that the CTA create a responsive and meaningful dispute resolution mechanism that can resolve rate and service issues quickly and efficiently.
- Running Rights: It is recommended that the CTA Review Panel establish provisions to enhance the use of running right provisions in Section 138 of the CTA.
- Small Shippers: It is recommended that changes to the Canada Transportation Act support small shipper innovation, diversification and investment.
- Producer Cars: It is recommended that the CTA Review Panel ensure that the unique requirements of producer car shippers and short line railways in the transportation system are recognized and accommodated within the legislative framework.
- Rail Abandonment Process: It is recommended that the Canadian Transportation Agency be empowered to investigate and rule on a railway’s genuine ‘operational interest’ in underserviced and unused rail lines in which other parties have expressed an interest. It is further recommended that if a genuine operational interest is not confirmed, that these lines go through the decommissioning process and be put up for commercial sale.
The coalition’s submission is available as a pdf on its website.