October 18 2011

Note:  this letter was sent to Saskatchewan Producer Car Shippers

From: Donna Welke, former Assistant Commissioner for Saskatchewan with the Canadian Grain Commission

I believe that politicians should not be interfering in the farmers’ organization. I was the Assistant Commissioner of the Canada Grain Commission in Saskatchewan at the time when elevators were being destroyed and rail lines abandoned. Farmers wanted to set up loading facilities for producer cars. I learned how this could be accomplished “on the job” … and you, the taxpayer, paid for my learning curve. Even though I no longer receive a salary I feel compelled to share the information and the facts with you. I admired and enjoyed working with the grain farmers and now I want to give back.

As many of you know, every time you ship a producer car, you are using The Canada Grain Act which allows an alternative system or “safety valve” method of shipping grains. This means, if, and only if, there is someone at port position prepared to sell it then you can ship any grain in a producer car. For wheat, durum and barley this seller has been the CWB. Since the CWB has a mandate to get the best returns possible for farmers, they find sales for producer cars of CWB grains. But, for non-board grains like canola, grain handling companies want to buy your grains at their facilities on the prairies not at port. So there are very few producer cars shipped for non-board grains. If the CWB is removed, it will be the same for your wheat durum and barley.

In order for the Canadian Grain Commission (CGC) to allocate producer cars which has been repeatedly identified as a lawful “right,” there must be cars available.  Section 28 K of the Canadian Wheat Board Act allows the CWB to distribute rail cars for the loading of CWB grain.  However, it won’t matter how cars are distributed or allocated if there is no one to sell it at the ports.

It should be noted that the proposed legislation tabled in Parliament strips the Wheat Board of this power to allocate rail cars.

Payment is made on the basis of the CGC’s official grade, dockage, protein, and weight at the time of unload at the port. (Inward Weighing and Inspection). The CGC is an independent third party and its high standards are recognized around the world. It has been suggested that other grading companies could be used but it is the authority from the Canada Grain Act that ensures that the CGC’s grade is the final authority.  What good is the inspection and weighing to the producer if the companies do not have to accept it?

The CWB and the CGC work as a system in the marketing and the selling of your grain. Grain quality, consistency and safety are an important part of the niche market that the CWB and the CGC have developed world wide for the advantage of farmers.   The CGC and the CWB staff on the prairies have always worked together “in the interest of producers” in fact it is the law that the CGC must do so, a law that is currently under review.

You may have the right to ship a producer car but without the Wheat Board to send you a car and sell your grain, it won’t matter.  The future of producer cars is at serious risk. If producer car shipping is not an option, how long do you think the trucking incentives will remain?

For those of you involved in short lines and producer car facilities you know that you contribute to municipal and education taxes in several RM’s and towns. You pay considerable interest to the local financial institutions and the traffic drives IN to your town… not OUT.

The Saskatchewan Association of Rural Municipalities (SARM) was very instrumental in encouraging producer car facilities because of road maintenance costs and as part of the rural revitalization.

West Central Road and Rail (WCRR) played an important role at the Estey/Kroeger process to ensure that the revenue cap kept producer cars viable.

Agricultural Producers Association of Saskatchewan (APAS) recently came out with a statement suggesting the need for time to put a plan in place but the Federal government seems to be in a hurry and has tabled legislation which will end the Wheat Board, dismiss the farmer elected directors and take regulatory power away from its successor.

The Canadian system from seed registration to outward inspection of a vessel is an expensive system that farmers pay for. But it is worth it, because a higher percentage of the world market for both high quality and regular grain is captured because of the quality and consistency. That means more money and sales for western Canadian producers.

Because of our landlocked position and high transportation costs, we cannot compete on volume or price so quality is essential. You as producers know that and so do our competitors.  For example, it is in the interest of the United States to blend down our quality to get a competitive advantage for their corporations.

Talk to each other, talk to your MP and talk to your MLA during this Saskatchewan election time.  Our Premier was able to influence the Federal Government to retain the single desk seller of potash so perhaps he could have some influence to keep the CWB’s single desk.

Thank you for taking the time to read this letter. It is sent with the genuine belief that we will not be able to put the pieces back together after the fall and so your action is needed now.

This letter will not get to all the shippers so I hope you will pass it on.

Yours truly,

Donna Welke.

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