Demand A Costing Review Of Railway Grain Transportation

Disbelief. Followed by frustration and, we hope, the desire to do something about it. That is response many western grain farmers are likely to feel upon receiving news that they may have greatly overpaid the railway companies to ship their product. Railway earnings for handling grain are the focus of a new study by respected rail analyst John Edsforth. With this information, the CFA and its members have renewed the call for a full rail costing review.

In the March 2010 study, “Estimated Contributions Earned by Railways from Handling of Statutory Grains and Grain Products, 2007-08 and 2008-09,” Edsforth concluded that the rail companies had overcharged farmers and exceeded the federally regulated revenue cap by a startling $123 million (for the crop year 2007-08). This figure jumps to $275 million for the following crop year, 2008-09. The study reports that Prairie grain farmers have paid anywhere from $4.61 to $8.81 per tonne more than what the railways could have obtained according to contribution levels that the Canadian Transportation Agency (CTA) had deemed fair and adequate under the Western Grain Transportation Act. The study is based on in part on CTA decisions from 2007-08 (628-R-2008) and 2008-09 (529-R-2009).

How can farmers continue to accept this status quo? How much longer can the government justify its reluctance to launch a full rail costing review?

Upon reviewing the Edsforth study, the Canadian Wheat Board developed a Rail Cost Calculator that gives individual farmers an estimate of how much they may have overpaid for transporting grain by rail (for shipping wheat, durum, barley, canola, peas, oats, flax, and other grains). The calculator is available on the CWB website: www.cwb.ca/rail.Try it out, and get a better sense of what you may have given away due to outdated CTA costing formulas (they were last reviewed in 1992).

To date the federal government has declined our call for a costing review, saying it would only consider the request once the current rail service review is complete. Unfortunately the service review is already behind schedule. The CFA believes that both the service and costing reviews could be run concurrently.

It’s time for farmers to take a stand. The CFA is urging producers to get involved by joining its email campaign to ask Prime Minister Stephen Harper, Transportation Minister John Baird, Agriculture Minister Gerry Ritz, and Minister of State Rob Merrifield to conduct a rail costing review as soon as possible. You can send an email automatically through our web site: www.cfa-fca.ca/programs-projects/advocacy/rail-costing-review.

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