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Opinion: The Great Canadian Grain Robbery

If you can’t identify the problem then you can’t provide a solution

Allan Dawson, in the April 12 edition (Putting a price tag on the grain backlog), continues to defend a false narrative of ‘blame the railways.’

The information provided by Ken Larsen in his National Farmer’s Union op-ed on March 22 was confirmed by a highly respected journalist for the Western Producer, Brian Cross, who noted that “… despite what some industry observers are describing as a shipping disaster on par with the industry-wide grain backlog of 2013-14, total exports of all Canadian grains and oilseeds as of Jan. 31 were slightly ahead of last year’s record pace, Statistics Canada figures showed.”

Likewise Canadian Grain Commission data shows total grain shipments to week 37 (April 9 to April 16) for wheat, oats, barley and rye, are all up over last year’s pace.

We know that the railways want to remove the rail revenue cap, deregulate the system and share in the spoils like the grain companies have done.

The NFU will not be part of former agriculture minister Gerry Ritz’s bogus narrative of blame the railways and divert attention away from the grain companies, that we feel are engaged in their own “Great Canadian Grain Robbery.” The following are just some of the ways farmers lose revenue.

Low prices

Farmers are receiving some of the lowest prices in real dollars ever for their grain. Analysis by Richard Gray, agriculture economist with the University of Saskatchewan, indicated western farmers lost over $6.5 billion in the 2013-14 and 2014-15 crop years. Farmers continue to lose over $1 billion a year. A fair estimate would be $9 billion or $10 billion in total losses to date. Dawson points out that Vancouver wheat is now $1 a bushel less than U.S. wheat at Portland. With CWB marketing, the price at Vancouver was always higher than at Portland. In the book, Our Board Our Business, Gray talks of the premiums the CWB achieved for farmers. Gray said, “I have seen the premiums, I know they exist.” To add insult to injury Dawson states that the CWB assets were bought by G3. This is wrong. These assets were given to G3. Next week in Winnipeg the Friends of the CWB will be back in court to defend the farmers’ right to the assets given to G3.

Inefficiency at port

It has been widely reported that a ship at a Vancouver terminal has to dock/load and return to deepwater anchor up to six times before it has a full cargo. The Vancouver longshoremen report that they have never had so much work. Under the CWB all of the grain in Vancouver was CWB grain so ships could move from terminal to terminal. The CWB transportation department occupied an entire floor of the CWB building and it was dedicated to grain transportation logistics. The CWB could direct board grain to the terminal of its choice, which was vital for Churchill, producer cars, retaining blending revenue for the pool accounts, and negotiating rail rates such as direct to St. Lawrence or the Vancouver-Prince Rupert spread, as well as maximizing train and terminal efficiency.

Inefficient country grain movement

Grain is now trucked hundreds of miles, sometimes in opposite directions, to country terminals to get the proper blend for the export terminals. The co-ordinated movement and blending was once co-ordinated by the CWB for the benefit of farmers. In my community we have one elevator, so the so-called competition exists 200 km or more away. Farmers in Swan River receive 40 cents a bushel less in Swan River than in Dauphin or Yorkton. The argument that trucks provide competition is so pathetic.

Composite loading at Vancouver

Under pressure from the private trade, the Canadian Grain Commission allows grain companies to do composite loading. This means they can have 11 per cent protein in one hold and 15 per cent protein in another, as long as it averages the spec of 13 per cent protein. Before composite loading was allowed, the company had to blend before loading, thus making the shipment consistent. This loss of consistency has severely damaged Canada’s reputation in international markets.

Demurrage

We constantly hear of 30-plus ships that are waiting at Vancouver. Dawson states, “Demurrage charges exceeded $50 million in 2013-14. This year’s bill could hit $40 million.” After the CWB took the railway to court and won, we thought demurrage was a thing of the past. In fact the CWB often was paid dispatch for loading ahead of schedule.

Churchill

The Port of Churchill had a significant advantage to farmers in northeast Saskatchewan and northwest Manitoba. Farmers here remember the Churchill storage and freight program operated by the CWB. Omnitrax cited the loss of the CWB and grain movement as a reason for shutting down the line.

In conclusion, grain production on the Prairies has never been viable — and is not viable now — without a Canadian Wheat Board single desk. The reality is that none of these losses of $9 billion to $10 billion would have happened, had the Canadian Wheat Board single desk still been in operation.

Since the days of the Territorial Grain Growers, farmers have always had a plan for farmer-controlled marketing. The NFU can identify the problem and the solution is to reinstate CWB single-desk selling of wheat and barley.

Ken Sigurdson farms with his family in the Swan River area of Manitoba. He is a board member of the Canadian Wheat Board Alliance and a longtime member of the National Farmers’ Union. He served as a delegate to Manitoba Pool Elevators and Agricore for 27 years.

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