(February 4, 2019)  A couple of weeks ago there was a small news story about Louis Dreyfus successfully suing CN rail for failing to provide enough grain cars to its elevators.

CN trotted out the usual excuses for being tardy:  it gets cold in the winter, there was a lot of grain to ship, and they have other customers.  It must be easy being a railway lawyer when it is just cut and paste from the same old song books.

Although no money was mentioned in the reports, some farmers may be waiting for a cheque, since in the end weren’t they the ones who lost money if grain shipments were tardy?

Well, not so fast.  This is not 1997/98 when the newly elected farmer-Directors to the Canadian Wheat Board launched level of service complaints against both railways for poor service, took them to court, and won.  That railway glitch cost farmers and the CWB some $18.7 million in demurrage charges from ships waiting for grain as well as other costs.

As the sole agent for prairie wheat and barley sales the courts recognized the CWB was a “shipper” who had every right to launch level of service complaints with the Canadian Transportation Agency and sue the railways for damages in civil court.  Over much disapproving clucking from the usual anti-Wheat Board astro-turf farm groups and others, the CWB’s directors did just that.  They recovered some $15 million from CP rail.  CN sensibly threw in the towel and made an undisclosed settlement.  This money went back to farmers through the Pool accounts.

On $4.5 billion in annual sales at the time, it was not a big amount, but still more than farmers will likely get from this latest tussle between Dreyfus and CN for the simple reason farmers are no longer “shippers.”  That power now goes to the new middle men (and a very astute woman in the case of Louis Dreyfus Company) of the giant grain companies who have taken over after the killing of the Wheat Board.

Through their Wheat Board, farmers won big both financially and legally from both the CTA and court processes.  And farmers got a cheque too.  But the bigger win happened the next crop year and the next and every crop year after that.  The Wheat Board never paid net demurrage to ships waiting for tardy trains again.  In fact, over the next 13 crop years ship owners paid the CWB and prairie farmers just under $44 million dollars in “despatch” for getting the ships under sail ahead of time, very much enhancing our reputation as reliable suppliers of high-quality wheat and barley.

Farmers delivering to Dreyfus elevators may or may not see some benefits in the form of faster grain shipments, and we may never know how much money Dreyfus won.  However, only the most optimistic farmer will expect to see any extra money on their grain cheques in the future.  After all, grain marketing is now a private club between the big grain companies, the railways, and foreign grain buyers.  Even though prairie farmers take all the risks of growing a crop and delivering it, they will never get a look behind the curtain.

If they are expecting some money out of the Dreyfus win, they may want to take some advice from the founder of Archer Daniels Midland, Dwayne Anders, who famously said “waiting for free enterprise in agriculture is like leaving the porch light on for Jimmy Hoffa.”

For farmers born yesterday and those not paying attention, Mr. Hoffa was a famous US labour leader who simply disappeared one day, never to be seen again, rather like the high prices for our wheat and barley the Wheat Board once delivered.

One comment

  1. What a good read. It is reassuring that there are some with clear heads and good memories that can relate to the ‘good old days’! Today’s generation of farmers have a different situation to handle, which by the way resembles the pre-CWB days! It is too bad that technology has not kept up and there is no way to quickly access the history of the CWB and the reason for its creation and ultimately its demise; hmmmm, ever thought of Google for example?