When the railways start replacing hopper cars as expected if the Transportation Modernization Act becomes law, western farmers will pay more, in total, to ship grain to export. That’s because the maximum revenue entitlement (MRE) will be adjusted to pass on the purchase costs to shippers and ultimately farmers. Most farm and shipper groups agree
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Calls for a review of railway costs
Some farm groups suspect producers are paying more than was originally intended under the maximum revenue entitlement
Prairie farm leaders meet CN Rail in Vancouver
It was an attempt to build bridges and ultimately improve grain shipping, but farmers remain unclear about the impact the MRE is having on car replacements
Prairie farm leaders praised CN Rail for agreeing to meet here last week to discuss ways to improve Western Canada’s grain-handling and transportation system. “I was impressed with the openness of CN,” Keystone Agricultural Producers (KAP) president Dan Mazier said in an interview (watch a video interview further down). “I think they were genuine today.”
MRE counterpoint claims system hurts everyone
VIDEO: Barry Prentice says the MRE is bad for western grain farmers and the railways
Western grain farmers and the railways would be better off if the maximum revenue entitlement (MRE) was scrapped, according to Barry Prentice, an agricultural economist and professor of supply chain management at the University of Manitoba. “Farmers may be losing more on (grain) prices (because Canada is seen as an unreliable supplier) than they ever
Grain sector hails transport reform
But some farm groups worry about the future of the maximum revenue entitlement
Farm groups, grain shippers, crop processors and supply chain organizations are all praising Transport Minister Marc Garneau’s plan to make Canada’s grain transportation system more competitive. But some farm groups are uneasy about the future of the maximum revenue entitlement (MRE). Speaking to the Chamber of Commerce of Metropolitan Montreal Nov. 3 Garneau announced legislation
Scrapping maximum revenue entitlement will double farmers’ freight bill
Agricultural economist Derek Brewin concludes the MRE works for farmers and the railways and has resulted in a more efficient system
Western Canadian farmers will pay the railways at least double what they do now to ship grain if the maximum revenue entitlement (MRE) is phased out as recommended in the Emerson Report. “The increase is somewhere between 100 and 150 per cent in real rates if we remove the MRE,” University of Manitoba agricultural economist
Cost index for railways’ grain revenue cap gets boost
The loonie’s decline since last year has led federal regulators to dial up the index guiding how much money Canada’s big two railways get to keep from hauling Prairie grain. The Canadian Transportation Agency (CTA) announced Friday it will raise its volume-related composite price index (VRCPI) by 4.8 per cent, to 1.3275, for the 2016-17
More farm groups pan CTA review panel report
It’s thumbs down from the NFU, SaskWheat, SaskBarley and APAS
The National Farmers Union (NFU), and a coalition of Saskatchewan farm groups, are disappointed with a report prepared by the panel that reviewed the Canadian Transportation Act. “The CTA review was carried out by the previous government’s appointees, and its results predictably reflect an alignment with CN, CP and the multinational grain companies regarding grain
Editorial: Long wait, more rhetoric
A long-awaited report by the panel reviewing the Canadian Transportation Act will disappoint those in the grains sector looking for more accountability in the system that moves their crop to market. The report “Pathways: Connecting Canada’s Transportation System to the World” is the result of an accelerated review of the federal legislation. The scheduled review
Editorial: Shedding light on the heated debate of grain freight rates
One of the most heated farm policy debates of late has been over the fate of the maximum revenue entitlement (MRE) keeping a lid on grain freight rates. In the debate that emerged from the abysmal railway performance through the winter of 2013-14, axing the MRE has increasingly been portrayed as a quid pro quo
Cost index trimmed for railways’ grain revenue cap
A sharper-than-expected drop in fuel costs has led federal regulators to dial back the index that decides how much money railways get to keep from hauling Prairie grain. The Canadian Transportation Agency on announced Thursday it will cut its volume-related composite price index (VRCPI) by 5.6 per cent, to 1.2517, for the 2015-16 crop year.