CTA ruling gives the lie to Ritz grain narrative

(December 20, 2014) Most farmers will remember the wide-eyed assertions of the grain companies and Agriculture Minister Ritz that a bumper crop and incompetent railways were the reason grain ships were piling up on the west coast and farmers could not deliver their grain. They claimed grain prices cut by half were no fault of the grain companies. “Blame the railways  – nothing too see here – move on” was the mantra. A mantra dutifully repeated by the stenographers pretending to be commentators and reporters in too much of the media.

That line of reasoning was discredited on a quiet Thursday just before Christmas when the Canadian Transportation Agency (CTA) released its determination of the Western Grain Maximum Revenue Entitlements (MRE) for the 2013-14 bumper crop year. The CTA is an independent, quasi-judicial tribunal with all the powers of a Federal Court to subpoena witnesses, documents, and records. They can and do put people under oath and for those who have participated in one of these processes it is a sobering and very stressful experience.

Each year the CTA examines and audits the railway’s documentation on the amount of grain hauled, where it went and over how many miles. This is all used to determine how much the railways will be allowed to charge western grain shippers for moving grain. For a detailed explanation of the MRE click here

The Transportation Agency ruling found that the tonnage of grain the two railways hauled in 2013-14 was “18.8 percent higher than the western grain volume for the previous crop year.” [Emphasis added] In other words a bumper crop was hauled by bumper railway performance.

Given that 18.8% increase in tonnage hauled, it means the grain companies served themselves very well indeed by taking literally billions of dollars from western farmers while using poor rail service as an excuse to confuse farmers and the media with bogus claims about high basis costs being caused by the railways. The CTA ruling shows the grain company claims were so much cow flop.

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As was reported here some months ago, ships waiting, customers complaining, and the terrible damage to our reputation for providing quality assured grain is entirely the fault of the incompetence and greed of the private grain trade. The CTA ruling shows grain was moving and being sold but without the single-desk Wheat Board, the grain companies were taking all the cream and most of the milk. As the smallest players in the system farmer Producer Car shippers were squeezed by both sides.

The CTA ruling also demonstrates that Minister Ritz’s Fair Rail for Grain Farmers Act was more of an attempt to divert attention from the fact the grain companies were ripping off farmers for billions of dollars than to do anything for farmers.

Another part of the CTA’s Ruling found that CN rail had overcharged grain shippers by $4.98 million dollars and gave them 30 days to pay this amount to the Western Grains Research Foundation (WGRF). This follows on penalties in other years of tens of millions paid to the WGRF. All showing that the argument there is no money for public interest plant breeding and research is simply not true. It should be noted this is the argument which is being used by Minister Ritz as an excuse to give away cereal grain genetics to the private sector through a disingenuous process his department announced a few weeks ago.

Lastly, this ruling shows that now is the time for the Canadian Canola Growers Association and the other check-off organizations to stop wasting farmers’ money on overseas junkets, very expensive regulatory stunts, endless media propaganda, along with supporting the industry-captured Cereals Canada in Ottawa – all to provide their Conservative masters with political cover. Instead they should start donating the check-off money they take from farmers to the Western Grains Research Foundation as well. Then farmers’ money could be put to a good use which will directly benefit them.

The December 18, 2014 CTA ruling is certainly a gift to farmers but will the truth contained in its pages catch up to the misinformation spread so thickly in the press over this past crop year?