Dismantling Canadian Wheat

by on Apr 8, 2015 in Articles and Letters | Comments Off on Dismantling Canadian Wheat

by:  David Gehl

David Gehl has served as officer-in-charge and head of the Seed Increase Unit at Ag Canada’s Experimental Farm for the past 25 years. At the Indian Head, Saskatchewan farm, he’s overseen the production of more than 1,000 breeder plots and obtained more than 600 Breeder Seed Crop Certificates for varieties of more than three dozen crop kinds. The varieties propogated and distributed by the Seed Increase Unit under his direction represent a significant portion of pedigreed seed production, especially in western Canada.

In addition to his duties for Breeder Seed production, Gehl coordinates plant breeding winter nursery activities for Agriculture and Agri-Food Canada.

(April 8, 2015)  The Canadian Grain Commission (CGC) recently proposed to create a new class of lower quality milling wheat for a stated objective of protecting the integrity of the Canada Western Red Spring (CWRS) class.  However, the introduction of this new class may actually undermine CWRS wheat by facilitating the introduction of higher yielding, lower protein American HRS varieties.  Prairie wheat producers and others in the Canadian grain industry should give this development careful consideration.  Will western grain farmers actually benefit from introducing a new class of lower quality milling wheat?

In the world marketplace CWRS wheat has long enjoyed a well-earned reputation as a premium quality milling wheat.  Because of its versatility and ability to improve end-use quality in blends with lower quality wheats it is in steady demand and almost always at a premium price.  The integrity of CWRS and other Canadian wheat classes is protected by a grading system administered by the CGC and by a variety registration system which have, until recently, restricted commercial production of milling wheat varieties with lower-quality outside the parameters of prescribed market classes.

A combination of the dissolution of the Canadian Wheat Board single-desk, several years of adverse growing conditions resulting in quality challenges and an oversupply from the bumper crop of 2013 has resulted in lower prices paid to prairie wheat producers.  In turn, end-use buyers have complained of erratic quality and in some cases have turned to alternative suppliers.  The introduction of a new class of milling wheat has the potential to further disrupt the Canadian wheat production and marketing system, a system which has served the interests of producers and end-users so well for decades.

Recent privatization of the CGC’s system of grading export shipments and a lack of reserve capacity in the Canadian grain handling and transportation system have added to the problems.  Farmers are experiencing the freedom to market their CWRS wheat for lower returns than under the CWB single-desk.  Their resultant anger has been deliberately misdirected at the railways, a traditional scapegoat.  Meanwhile the profits of the grain companies are at record levels.

No one can blame prairie producers for their anger.  They are producing a premium product and often earning a discounted price.  Under these conditions the opportunity to produce higher yielding American HRS varieties will be attractive to many in the short term.  Some of the outcomes are predictable and include:

1) the area planted to American HRS varieties on the Canadian prairies will grow dramatically as long as higher quality CWRS varieties do not earn offsetting price premiums for growers;

2) increased volumes of lower quality spring wheat resultant from wide-scale production of American HRS varieties will add to reserve capacity problems in the Canadian grain handling and transportation system;

3) Canadian seed companies with distribution rights for American HRS varieties will enjoy high sales and profits for several years;

4)  a profusion of new spring wheat varieties will place pressure on the Canadian variety registration and provincial variety testing systems; and

5) Canadian public sector wheat breeding programs will be at a significant disadvantage to American public sector and transnational private sector breeding programs which currently focus on the development of higher yielding American HRS wheat.

     If the ultimate objective is to dismantle the Canadian wheat system and replace it with a North American system dominated by transnational grain and crop-life companies the introduction of a new marketing class of spring wheat is the next logical step. By doing so western Canada will sacrifice its international market niche supplying the highest quality milling wheat in return for competing with American and other wheat growing regions that are much closer to port, have lower land and labour costs, better climates, and whose ports are thousands of kilometres closer to end-use customers.

Trade deals no impediment to restoring CWB

by on Mar 16, 2015 in Articles and Letters | Comments Off on Trade deals no impediment to restoring CWB

By Ken Larsen, The Starphoenix March 5, 2015

Larsen is a farmer in Benalto, Alta., and a member of the board of the Friends of the Canadian Wheat Board, which is engaged in a classaction lawsuit over changes to the structure of the CWB.

Ottawa has killed the Canadian Wheat Board several times over the last 120 years, and each time western farmers have successfully demanded its return. The length of time farmers would tolerate working without the single desk wheat board became shorter each time.

Those who profit from taking the CWB away from farmers would like everyone to believe that creating a new board is impossible because of international trade deals. However, recent events in lumber, steel, labour law, and U.S. and EU agricultural subsidies show this is not necessarily correct.

So what do a chunk of Canadian softwood lumber, American steel, and restoring the CWB all have in common? The short answer is they all show that so-called “trade deals” are an excuse for Ottawa to do what it wants.

Most experienced farmers will remember the endless and ultimately successful efforts by the railways and their supporters to get rid of the Crow’s Nest Pass freight rate agreement. We were assured that killing the Crow was the way to put an end to U.S. and European farm subsidies.

Of course, in spite of the free trade deals and Canada’s Boy Scout position in killing the Crow, the Americans and Europeans actually increased their agricultural subsidies while western farmers saw their co-operative elevator systems bankrupted in an attempt to meet the increasingly unreasonable demands of the railways.

Western Canada went from more than 5,000 community elevators to around 360. Ottawa did nothing to protect our co-operatives or insist that western farmers be compensated by the U.S. and EU for their continued farm subsidies. Instead, in round after round of General Agreement on Trade and Tariffs (GATT) talks we were assured by successive Ottawa governments that a level playing field was just around the corner, if only we gave up just one more thing that helped western farmers.

Now we’ve been forced to give up almost everything, and the playing field just keeps getting more uneven.

Remember a few years ago when, despite the Free Trade Agreement with the U.S., Canadian softwood lumber exports were heavily penalized by the Americans and Ottawa did nothing beyond imposing and collecting the U.S. tariff from Canadian producers? It was a definite win for Ottawa’s treasury, but hardly a happy outcome for British Columbia softwood lumber producers.

How about a more recent example of how meaningless these trade agreements are to all concerned when national interests are at stake?

Look at the recent invocation by the Harper government of an obscure law called the Canadian Foreign Extraterritorial Measures Act to block the use of American steel in a construction project for an American ferry company dock in Prince Rupert, B.C. No fireworks. No Marines landing at Rideau Hall. Just a very quiet capitulation by the Americans.

What these instances demonstrate is that when it comes to international trade relations, national interests take priority over trade law and agreements.

Without getting into all the ways the single-desk CWB can be reinstated, two things should be remembered. First, collective bargaining is protected in our Constitution. Second, the courts have yet to speak on the legality of destroying the single desk without compensating the farmers who owned and benefited from it.

While these do not lay out a red carpet for the restoration of the single-desk wheat board, they do make the road to that destination smoother.

So when you hear some apologist throw up their hands and say we can never get back a single-desk CWB, drop a little piece of softwood lumber on their toe and remind them that a little Canadian steel in the backbone of our federal politicians means that we can exercise our right to restore a single-desk Canadian Wheat Board whenever we chose to do so.

– The StarPhoenix

Not Impossible

by on Mar 12, 2015 in Articles and Letters | Comments Off on Not Impossible

Some thoughts about the loss of the Canadian Wheat Board pre-2012.
Bernie von Tettenborn,
Western Producer, March 12, 2015

The old CWB sold only Canadian grain. It was branded as Canadian and with its advantages had good markets.

The multinationals sell grain from the U.S., Argentina, Brazil, Australia, Russia, Europe and also some from Canada but it isn’t promoted as a Canadian brand.

Because the big grain companies work on volume they promote the seeding of high yielding varieties and yet the quality of the grain in a lot of these varieties is not up to the Canadian standard that we are known for.

The CWB worked with Canadian grains for the benefit of the Canadian farmer, and all profits went back to the farming economy.

Now the profits of the prairie provinces are going through the multinational companies to offshore shareholders.

We used to hear a lot from the free marketers about all the benefits of getting rid of the CWB. But it appears they got more than they bargained for because we don’t hear from them anymore. If they were happy they would let us know.

We are told we can’t get the old CWB back because of agreements. What are we, a colony of another country? We have our own country and our own government and we should be able to legislate what is best for our own economy.

The U.S. labelled us as hewers of wood and drawers of water and have treated us as such. After the free trade agreement, they gave us a real shakedown with lumber and it was only after prime minister Stephen Harper gave a big write down that we were able to export lumber again at a fair price.

We saw the same thing with livestock (cattle and pigs) with the implementation of COOL, which has cost the Canadian livestock sector billions.

Another resource that is penalized is oil. We have only one (main) market and have to take what they will give us (which is a discounted price).

The same with grain. We used to see high prices in the U.S. and wished we could access that price also. Now with the free market we are still looking at higher prices across the border. What happened?

The assets of the old CWB were paid for with farmer money, but were expropriated by the Conservative government, which is now looking for a large company to partner with to give the “Ritz Board” and all its assets (gained from farmer equity) to. They stated at the breakup of the old CWB that the assets needed to be done away with by the end of 2017.

In the meantime, they are trying to build more facilities to make it more enticing for a takeover.

This has all come out of farmers pockets, to the detriment of the prairie economy.

Bringing back the old CWB or an entity like it is not impossible, it just is going to take some backbone.


Marquis wheat and Marquis lakers

by on Nov 27, 2014 in Articles and Letters | Comments Off on Marquis wheat and Marquis lakers

by Bill Toews
Manitoba Co-operator, November 20, 2014

Charles Saunders developed “Marquis wheat” in 1904. It appeared to be ideal for Canada’s climate and was tested at the Brandon and Indian Head public research stations. It was subsequently released to farmers in 1909. Within a decade, 20 million acres of Marquis wheat were planted from Kansas to northern Saskatchewan. Today, Marquis wheat is considered to be Canadian agriculture’s greatest triumph.

Farmers are still benefiting from Marquis because the lineage of many current high-quality varieties can be traced back to Marquis genetics.

Approximately 100 years later in 2010, the farmer-elected directors of the Canadian Wheat Board made a decision to move further up the Marquis value chain by investing $65 million in two Great Lakes ships or ‘lakers’ as they are commonly known. This would complement the farmer’s ownership of the Canadian Wheat Board’s hopper car fleet and provide an estimated return on investment of 15 per cent. The lakers would have been paid for by charging $1/tonne to the pools for three to four years and then pay back over their 30-year lifespan.

This business venture was derailed by Agriculture Minister Gerry Ritz when he unilaterally began transforming the farmer-owned Canadian Wheat Board into a private grain company. He confiscated the farmer’s hopper cars and the farmer’s laker program. The federal government’s decision to christen the first of two lakers “MARQUIS” is an affront to
farmers and to the Marquis name. For a century that name symbolized a ‘triumph for farmers,’ but sadly, Marquis will now also be remembered as something ‘taken from farmers.’

Stick to facts

by on Nov 11, 2014 in Articles and Letters | Comments Off on Stick to facts

By Bill Woods,
The Starphoenix November 7, 2014

In a recent media interview, Agricultural Minister Gerry Ritz continued his pattern of prevarication in discussing the privatization and sale of the newly created CWB.

He said that if the farmer-elected directors of the former Canadian Wheat Board were honest, they would have admitted their agency had more liabilities than assets. He was falsely insinuating the wheat board was already heavily leveraged when his government turned it into the CWB grain company.

Is Ritz paving the way for a fire sale of the neutered CWB? Could it be that he intends to sell for a pittance but boast the sale as a “marketing miracle?” If Ritz had read the former CWB’s audited financial statement, he would know that when he dismissed the farmer-elected directors, the agency’s assets exceeded liabilities by $300 million. He simply has his facts wrong, again.

It is an insult that this minister has the nerve even to raise the subject of farmers’ honesty.

This is the minister who falsely said at a federal agriculture committee meeting that he was denied attendance at board meetings of the former CWB. Minutes later he was forced to recant and acknowledge receiving numerous requests but had declined them all.

This is the minister who, just days before the federal election, promised farmers a vote on the fate of the wheat board but broke that promise immediately after the election.

His statements show he will say anything to promote the political agenda of his party.

Conservative policy changes destructive

by on Oct 14, 2014 in Articles and Letters | Comments Off on Conservative policy changes destructive

by Stewart Wells
The Manitoba Co-operator 6 | October 2, 2014

W.C. Fields’ line, “Never give a sucker an even break, or smarten up a chump,” has never been better executed than by the Conservative government and its farmer-disenfranchisement policies.

Its first move upon election in 2006 was to tear up the farmer-rail car agreement. While it wouldn’t have solved all the marketing problems from last year it would have at least given farmers a look behind the curtain.

This move was followed by taking away the community pasture network that farmers have relied on for decades, destroying the PFRA and the tree nursery, vaporizing the support that farmers had through the margin-based AgriStability program, and weakening the Canadian Grain Commission.

In parallel was the defunding and destruction of the grain varietal development and research capacity — and this at a time when the world’s population has never been higher and the climate has increasing variability.

Decimation of the Canadian Wheat Board (CWB) was next — farmers were disenfranchised and not allowed to vote on the matter according to the existing law, taxpayers were billed an unnecessary $349 million in 2011, and the $16-billion world-leading exporter was reduced from a business to a political manoeuvre with a few hundred million in assets.

Predictably the destruction of orderly marketing through the real CWB cost farmers $4 billion in lost income for the 2013 crop (money that ended up in grain company pockets, lost sales and demurrage charges), and the government now refuses to publish any financial reports for the Ritz-run CWB since 2012.

With financial cover ups and fast-tracking the giveaway of farmer-paid CWB assets, it looks like the government is trying to bury a dead skunk as fast as it can.

An agriculture minister from Ontario or B.C. could not have accomplished this much destruction. No, the minister had to be a short-term thinker from the Prairies where Conservative votes could be taken for granted.

Grain, Trains and Autocrats

by on Apr 24, 2014 in Articles and Letters | Comments Off on Grain, Trains and Autocrats

farmers pay the price of dismantling the Wheat Board

By Dean Harder

A banner 2013 crop year and some rail delays due to cold weather doesn’t account for all our grain transportation woes. Coordination of rail to ships is out of synch: a study by Quorum Corporation found that rail shipments to the West Coast are down 2 per cent from last year, but there are excess ships waiting in port. In the east, grain shipments were down 20 per cent at Thunder Bay as of March with some ships turning away empty.

There is a direct correlation between the loss of the farmer-elected Canadian Wheat Board (CWB) and the current rail transportation boondoggle which will cost prairie farmers over $5 billion in sales.

The CWB did more than sell wheat and barley for the benefit of prairie farmers. It oversaw orderly marketing and grain logistics. If premium 14 per cent high protein wheat was required by a buyer in Asia or Europe, it would be sourced from across the prairies, placed in railcars, shipped to the designated grain terminals at the ports and placed on grain ships in a reasonable timeframe. Even if there were rail delays the single desk would sequence shipments through multiple terminals until a ship of 14 per cent wheat was full. The funds made from early dispatch would go back to farmers.

Fast forward to 2014. Every extra day a ship sits waiting to get filled costs $15,000 to $25,000 per ship. This demurrage is wasteful on all fronts. Moreover, coordination of port shipments are not being managed effectively.

The former CWB was mandated by law to act as sole sales agent for wheat and barley for export and domestic human consumption. About 70 per cent of the prairie crop was exported overseas, another 20 per cent was consumed domestically and about 10 per cent went to the United States. Wheat and barley amounted to over half the grain handled by the railways and elevator companies. If rail companies were not moving grain, the CWB was able to allocate cars and sue companies unwilling to fulfill the commercial obligations they made, to make that movement happen. After a winter of poor rail performance in 1997, the CWB sued both of Canada’s largest railways. CN settled out of court and CP lost, paying $15 million to farmers in damages.  Railways had to pay-up for their poor grain handling that year. They didn’t mess with the CWB after this event.

Today, there is no regulatory body with this mandate or ability. The grain companies would not dare to fight the railroads since their elevators are largely captive to one or other of the railways and extra costs incurred are passed back to farmers in the form of lower farm gate prices. But do they need to? In the past, farmers could expect to get 85% of the pie. Today that share has been as low as 45%. Now, there is great uncertainty as to what the new norm will be. Meanwhile, grain companies are raking it in. An estimate calculated by the Canadian Wheat Board Alliance puts the total corporate bonus at $168.93 per metric tonne or $4.60 per bushel.

This catastrophe could have been prevented
On Nov. 2, 2011 during a Special Committee in Parliament to discuss Bill C-18, the act to remove the single-desk CWB, former CWB Director, Ian McCreary warned the government against removing CWB grain rail logistics operations without an adequate replacement. He referenced a 1980 example from the Soviet embargo in the US to expose the potential for a major difference between the price at port to the price at the elevator of $100/mt ($2.72/bushel), if grain on the prairies became overly abundant.

The Federal Government paid no attention to warnings by farmers like McCreary but they should have. The real cost from elevator to port in February got as shockingly high as $246/mt ($6.69/ bushel) for wheat, a Canadian record. Normal levels would be around $77.07/mt ($2.10/bushel) which accounts for standard transportation, cleaning & storage fees. Even if the cost from elevator to port were reduced in half over the next few months it would still be extreme. The weather, the record crop year and the railways do not completely account for such a large shipping cost increase.

It is concerning that the Canadian Minister of Agriculture, Gerry Ritz continues to defend his prior actions. Recently, when confronted about not setting up a grain logistics oversight organization as part of dismantling the single-desk CWB, his response was: “We saw this coming. That’s why we put together the Crop Logistics Working Group.”

Study groups are not systems. And in this case Ritz’s team advocated for laissez faire economics to allow the market to correct itself. The CWB would have seen this coming in August of 2013. Ritz only took action in March of 2014. He has bet the family farm on an ideological belief, which has turned into a $5 billion exchange of wealth from prairie pockets, to grain merchant coffers. Reality is showing us how disastrous the dismantlement of the CWB is for the rural Canadian economy.

Even as Bill C-30 (“Fair Rail for Grain Farmers Act”) works its way through Parliament, the Minister has ignored cries for a real arms-length oversight body. It includes very little to address the part that grain companies play in exploiting the current market structure.

To address this situation, the farmer elected single-desk CWB should be re-instated. We need grain logistics oversight that benefits farmers. Railways should be penalized significant amounts for lack of movement. The current $100,000/day is not enough.  Level the playing field by placing a cap onto oligopolistic grain company revenues, just as a cap exists for the railroads, which has proven essential in fighting exploitation by CN & CP.

Today, the temptation for grain companies to manipulate the market from inland to port has become far too lucrative to resist. We now exist in a system that allows grain robbery to be legal.

Dean Harder is a Manitoba farmer, a proud member of the National Farmer’s Union and a Canadian Centre for Policy Alternatives Manitoba Research Affiliate.

Does The CWB Still Exist?

by on Apr 17, 2014 in Articles and Letters | Comments Off on Does The CWB Still Exist?

by:  Leo Howse
Porcupine Plain, SK

The terms Canadian Wheat Board and CWB have been synonymous for 75 years. CWB was a recognized brand name around the world signifying a consistent and reliable supplier of high quality grain which added value for farmers. Agriculture Minister Ritz took that all away. Without farmer approval he destroyed the single desk CWB and confiscated all the assets which belonged to farmers. He then grabbed the money from the farmer’s CWB contingency fund, added taxpayer’s money to the mix and created what is best described as the “Gerry Ritz Grain Company”. He invariably calls his new grain company the “cwb” which sounds and looks a lot like CWB.

This identical acronym is not a coincidence. Ritz has steadfastly insisted that the CWB is still there for those farmers that want to use his “cwb”. He has fooled the public but farmers see through his charade. He has even been trying to convince the courts that the CWB has not been destroyed which is crucial to his smoke screen defense in the law suits.

The fact is, only the real CWB added value. Its brand earned premiums for farmers on grain sales. It defended farmers against railway abuses. Its integrity and reliability was recognized worldwide. It added efficiency to grain handling and transportation. It advocated for farmers. All profits went back to farmers. That is all gone now. The Gerry Ritz Grain Company called “cwb” does none of the above. It does not add value for farmers.  Ritz’s “cwb” is not the real CWB because it is just a grain company. So really, the CWB no longer exists. If Ritz was being honest he would stop calling his new grain company the CWB because it’s not even remotely similar to what he took away from farmers.

Extraordinary difference between country and port prices

by on Mar 31, 2014 in Articles and Letters | Comments Off on Extraordinary difference between country and port prices

Allan Dawson in Manitoba Cooperator, March 31, 2014

Farmers unable to move crops this winter have had plenty of time to notice the difference between what grain companies are paying in the country and selling for off the West Coast.

“Our calculations demonstrate the grain companies have taken over $1.6 billion in excess profits from wheat alone so far this crop year,” said CWBA spokesman and former Canadian Wheat Board director Kyle Korneychuk last week.

University of Saskatchewan agricultural economist Richard Gray independently reached a similar conclusion after comparing prices in the country, where elevators are plugged, against export sales at West Coast ports where prices are in some cases double.

The result is unprecedented grain company margins, despite what is expected to be record demurrage costs.

The CWBA estimates grain companies are earning almost $169 a tonne in excess profit from wheat, based on exports of 9.7 million tonnes to date. Gray’s calculations put company profits at $160 per tonne.

“These record-high basis levels (gap between futures and elevator prices) are costing farmers $100 to $200 per acre in forgone revenue and several billion dollars in total,” Gray wrote in an op-ed piece published in this week’s edition. “At the same time, these margins have substantially increased the bottom line of grain companies and processors (and they) will likely post record profits this year.”

Question the numbers

University of Saskatchewan agricultural economist Richard Gray expects western grain companies to earn record profits this crop year despite record demurrage charges.

The Western Grain Elevators Association denies grain companies are profiting from the transportation crisis.

“Grain companies don’t make money if they can’t move grain,” executive director Wade Sobkowich said in a statement. “We question the numbers put forward by the CWB Alliance.”

With four months left in the crop year grain companies have already paid an estimated $55 million in demurrage, Sobkowich said in an interview. The previous record of $50 million was set in 2010-11, according to Quorum Corporation, Canada’s grain monitor.

Demurrage is costing $15,000 to $25,000 per vessel per day, Sobkowich said. At the peak, 53 ships were waiting off the West Coast.

“My members have said, ‘we are bleeding badly,’” he said.

However, Gray said companies can make back their entire demurrage in one week of shipping. “And they will have change left over.”

Canola-crushing plants, also owned by grain companies, enjoy similar margins, he added.

“If they crush 10 million tonnes that’s $1.6 billion, so I suspect they’re doing pretty well,” Gray said.

Solutions differ

Gray and Korneychuk agree getting the railways to move more grain will help, but beyond that their solutions differ.

Korneychuk wants the Canadian Wheat Board’s single desk reinstated.

“The farmers’ share of the international price of grain has gone down from 84 per cent under our single-desk Canadian Wheat Board to around 40 per cent today,” he said. “It is the grain companies that have taken the lion’s share… because the railways are constrained by legislation from taking much more than 12 per cent.”

Wheat board co-ordination and system oversight was more efficient, he said.

Gray said the single desk would not have prevented this year’s anomalies in shipping and basis levels. He’s calling for expanded West Coast grain-handling capacity and more competition.

“We’ll get our highest net prices if grain goes west,” Gray said. “But for that to happen we need to nearly double West Coast capacity.”

The West’s three biggest grain companies — Richardson International, Viterra (Glencore) and Cargill own most of Vancouver’s terminal space.

“It’s not a lot of competition,” Gray said.

“Prince Rupert is particularly sinister,” he added, because the same three firms jointly own the grain terminal there. As a result, it gets used as a last resort because companies would rather maximize exports through their own terminals.

It would be more competitive with one owner, even if it was one of the big three, Gray said.

West Coast constraints

There’s little room to expand export capacity in Vancouver and even if there was, there is no incentive for existing players to solve the problem, Gray said.

Sobkowich said grain movement appears to be improving. In Week 34, the railways planned to move 8,000 cars, up a bit from previous weeks.

On March 7, the federal government gave the railways four weeks to start shipping at least 11,000 cars a week in total or face fines of $100,000 a day.

The government also promised to introduce legislation, perhaps as early as this week, to encourage better rail service for grain.

With a projected carry-over of 23.6 million tonnes there is no quick fix.

“Whether we have a normal, large or even a short crop (this fall) we’re still in this for 18 months to two years minimum,” Sobkowich said.

“Even if the railways hit the government numbers… we’re still going to have a problem.”

Farmers can also expect the basis to remain wide as more grain should be exported from the West Coast than it can handle, Gray said.

“This is a really complex thing and it’s going to require some real investment and not just a policy change,” he said. “We need to think long term and we need to think big and create capacity.

“Billions of dollars are at stake.”

Editor’s note:  Mr. Sobkowich of the grain elevators association can question our numbers all he wants, but they are NOT our numbers.  They come from Minister Ritz’s version of the CWB, the audited statements of the farmer-controlled CWB done by Deloitte and Touche Chartered Accountants, and the independent grain monitor, Quorum Corporation.

Railways want to kill revenue cap

by on Mar 12, 2014 in Articles and Letters | Comments Off on Railways want to kill revenue cap

By Bill Woods
March 11, 2014

A railway-friendly economist will say that you must pay more to get better service.  Unfortunately for farmers, when it comes to grain transportation the opposite is true.

Terry Whiteside, chair of the U.S. Rail Shippers Alliance, provided documented evidence that shippers in the U.S. who pay the highest rates, get the poorest service.  These shippers are captive to shipping only by rail, just like Prairie farmers.  The railways have to compete for freight that is not rail dependent so they give it priority over grain.

Railways get guaranteed business from captive shippers no matter how badly they treat them. The former Canadian Wheat Board (CWB) monopoly is the only shipper that successfully sued the railways for discriminatory service against farmers. In that 1998 court case the railways blamed the weather for their dismal service.  They called it “the winter from hell”. This winter, the railways are using the weather excuse again.

In 1998, the CWB had the data and clout to prove that once the mountains were cleared, the railways discriminated against grain shippers by servicing grain last. Agriculture Minister Gerry Ritz stole the farmers’ hammer by creating a neutered CWB.  Farmers watched helplessly as the railways moved them to the back of the line.

I was shocked to learn the railways are now telling Ottawa, “the revenue cap is the problem and farmers should pay more if they want better service.”  That’s hogwash.  With the revenue cap gone, farmers would be vulnerable to even more abuse.

Bill Woods, Eston, Sk.
Woods is a former CWB director