Another year, another transportation study

It is 18 months after Ottawa killed the CWB, grain is not moving and prairie prices have fallen by half on wheat and barley.

Farmers are no longer being paid for their high protein wheat;

Our major customers are complaining about delays and a lack of quality assurance so they’re going elsewhere.

Even the western Australians are eating our lunch on feed barley.  Could the fact they are on average less than 300 flat miles from deep water, as compared our almost 800 near vertical miles through three mountain ranges have anything to do with it?

Upwards of 40 giant grain ships have been waiting since before Christmas for the grain they ordered.  Demurrage on each vessel amounts to around half a million dollars a month and this comes out of farmers’ grain cheques.

When the farmer-controlled CWB faced a similar problem there were only a couple of ships a week waiting a month or so.  The farmer-controlled CWB successfully sued those responsible and recovered over $30 million for the Pool Accounts.  In most years after that an extra six to ten million a year went into the Pool Accounts as extra payment for getting the ships out ahead of time.

We know snow in the mountains is nothing new, but could it be all those oil cars we hear so much about?  Given that oil goes south and grain goes west, this is just more spin and nonsense.  However, if you want the detail of why, consider this article by Richard Dixon, Executive Director of the University of Alberta’s Centre for Applied Business Research in Energy and the Environment (CABREE)  where he  decimates the pathetic oil instead of grain argument Minister Ritz,  the Western Canadian Wheat Growers, and others have spouted as an excuse for the chaos at Vancouver.

A reasonable estimate for what killing the CWB has cost western Canada so far this crop year would be in the order of $2.8 billion dollars on wheat and barley.  Add in the masking effect of the declining Canadian dollar and this loss would easily top three billion dollars.  All of it is out of farmers’ pockets and spring seeding with its demands for costly inputs is around the corner.

With no Canadian Wheat Board to blame, our Conservative Agriculture Minister has few places to hide from his responsibility for completely wrecking a system that it took western farmers almost a century to build.  He should stand up, take responsibility, and resign, but Ministerial responsibility is no longer the Ottawa way.

Instead last month Minister Ritz announced yet another committee to examine rail problems.  This is the same thing he did in November of 2011 when he announced a “Working Group on Rail Transportation” at around the same time his handpicked group of AstroTurf representatives claimed the market could sort out the logistical problems so many had warned about growing out of the rubble of the CWB.

For this new so-called study the Minister is inviting more or less the same group of friends to wine and dine with him.  After its five year mandate is finished, how many farmers will be left standing on the prairies and how many over-seas customers will we have?

My far eastern friends tell me that a recent Canadian trade mission to Asia heard dissatisfaction expressed in almost every country they visited about the delivery failures and the poor quality control the private trade is providing on Canadian grain shipments.

Apparently one well turned out Western Canadian Wheat Growers Association member on this tax-payer-funded junket told our former Asian customers they should just complain to the people they bought the grain from.  Her amateur-hour “let them eat cake” attitude no doubt did further damage to our already soiled reputation.

Western Cdn Wheat Grower Assoc Member visits Asia
– May not be exactly as illustrated –

Western farmers need a resolution to the mess Minister Ritz is responsible for now, not five years from now when his latest committee is due to report.

We know this mess is a logistical problem caused by the loss of orderly marketing by the CWB, and giving the railways more money out of farmers’ pockets will not help.

Restoring the single desk farmer-controlled CWB would be the most efficient way to solve these problems.  The only other alternatives are draconian regulations imposed from above or being prepared to see the collapse of Canada’s niche in the global grain market for reliably supplying the highest quality grain.  As the weeks pass it is painfully clear Ottawa has thrown western Canada’s grain farmers and its economy to the wind.