Producer car shippers and elevator charges
Editor’s note: the Federal Government’s Crop Logistics Working Group is to plan for the removal of the single desk Wheat Board’s role in transportation. Here is an edited observation from a member of the Battle River Railway, a new generation cooperative in Alberta about that process.
By: Reg Enright
The Producer Car Shippers in their report to the Sub Committee of the Crop Logistics Working Group identified four factors affecting the future of producer cars under the new system:
1. Access to ports
2. Timely access to railcars
3. Marketing partners and
4. Multicar incentives
These are all hugely important. However, there is another point that was briefly mentioned and is the most important point going forward with the new marketing system.
The issue of elevation is the lifeblood of producer cars. Currently each shipper of a board producer car realizes a saving of $14 per tonne or $1,300 a producer car. This saving is transparent and real. With the new system this elevation becomes non-transparent and not real. The companies that own the port terminals, the same companies that own prairie elevators and want grain elevated, have no interest in paying producer car shippers their savings in elevation. Under the new system the $1,300 elevation savings will not be realized by the producer car shipper. How do we know this? Because under the current system canola is a non board grain as wheat will be after August 1, 2012. The terminals currently do not pay canola producer car shippers their elevation savings.
After August 1, 2012 when terminal operators do not pay producer car shippers elevation, the lifeblood of producer cars will cease to exist. The Battle River Railway in 2010-2011 shipped 731 cars. Their members or customers received $1,300 per car or $950,000 from saved elevation. That is real money, extra to what these farmers would have received delivering to a country elevator. If this money cannot be realized after August 1, 2012 why will farmers use producer cars?
When the CWB was in charge it was a simple transparent calculation. If an elevator elevated a farmers grain $14 a tonne was deducted at the elevator. If the grain was loaded in a producer car $14 was not deducted and the farmer received $14 per tonne more when the grain was unloaded at the coast terminals.
After August 1, 2012 a procedure must be in place to ensure producer car shippers can realize their savings when not using inland elevation. If no procedure is found to make the savings real the lifeblood of producer cars is gone and producer cars are dead. If producer cars are dead grain dependent shortline railways are also dead.
The only way producer car shippers can be sustained is by ensuring they capture their elevation savings. That can only be done with regulation. There is no other way. Producer car shippers have no tools in their toolbox to force terminal operators to forward the savings from elevation. When terminal operators keep the elevation savings it is the same as a person washing their car in their backyard and having a commercial car wash company charge that person for a car wash.
It is the official position of the Battle River Railway to ask, implore, and plead to the Federal government of Canada to create a playing field where producer car shippers can realize their rightful elevation savings. The future of producer cars and the future of grain dependent shortline railways depend on positive action by the federal government.
Wherefore Art Thou ‘strong and viable’ CWB?
By Stewart Wells
Western Producer, May 24, 2012
So here we are, a little more than 60 days from the end of the orderly marketing of wheat and barley in western Canada. When July ends, so do the marketing advantages of the real Canadian Wheat Board (CWB).
Of course those that have made careers by mindlessly bashing the Board at every turn are pleased.
But what about the rest of us—you know—the majority.
Despite the endless hype from Minister Gerry Ritz, and the long line of grain companies that pledged to ‘play nice’ with a voluntary Board, only one company has actually signed a handling agreement with the Board at the time of writing.
In July of last year, the farmer-lead CWB sent a letter to Minister Ritz outlining six points which we needed the government to think about if it was serious about trying to maintain some kind of voluntary Board. Those six points included:
- Government willingness to be the initial owner of a new entity that has a share capital structure. Under the circumstances, and in view of the short timeframes, a new entity would be unable to become operational under any other ownership structure. An appropriate exit strategy would have to be put in place to enable the government to divest its shares in a new entity in due course.
- Government willingness to ensure regulated access to country and port terminal to ensure competitively-priced access to these facilities with service levels that would enable third parties to compete effectively.
- Government willingness to provide a new entity regulatory authority to direct its own grain to port terminals of its choosing.
Our concerns didn’t come out of thin air—they came after years of planning and looking at different options under which the CWB could continue to operate and add value for Prairie farmers.
And the Minister’s response to the issues we raised in the points above? After a delay of several weeks, the Minister rejected these issues with one sentence in a return letter saying that our issues “appear inconsistent with an open and competitive grain market”.
Instead of acting responsibly, the government then went on to publicly insult the elected Directors as individuals, and the staff and CWB as an organization. And on October 18 the Minister illegally introduced legislation which ended any elected any farmer oversight and control of the CWB.
As for the Minister’s creation—the Conservative Wheat Board, it is the exact opposite of ‘strong and viable’. The recent announcement that the new temporary Board would cut its staff by more than ¾ shows just how maliciously untrue the Minister’s statements have been. No asset-less start-up grain company is strong or viable when it has to rely 100% on its competitors for its day to day operations. Period.
Organizations like the Friends of the CWB, the Canadian Wheat Board Alliance, the Producer Car Shippers of Canada, the former elected Directors, the National Farmers Union, and others are fighting back.
In 2007 the Harper government tried to illegally remove barley from the jurisdiction of the CWB. The Friends of the CWB and the CWB itself forced the issue into federal court and prevailed. A peer-reviewed analysis by U.S. based economists that had access to the CWB books showed that our court action has put an extra $428 million dollars into the pockets of western Canadian farmers since 2007.
We did it then, and we can do it now. To find out more visit www.friendsofcwb.ca. Don’t settle for less—support the Friends of the CWB and settle for more.
Stewart Wells was a farmer-elected director of the CWB and is currently the chairperson of The Friends of the Canadian Wheat Board.
The Fallacy of “Use it or Lose it”
RE: CWB offering new crop prices, contracts now, The Manitoba Co-operator, April 5, 2012, by Allan Dawson
Grain Growers’ executive director Richard Phillips tactlessly comments in this article farmers need to use the CWB or lose it.
This idea coming from Phillips is ironic and quite frankly foolish. Phillips was a cheerleader for his Conservative patrons as they crippled the CWB by removing most of its powers including the single desk. The CWB is now just another grain broker without access to the complete elevator system and no ability to allocate rail cars. This is because the CWB cannot get all the grain companies to sign handling agreements beneficial to farmers. So it is basically impossible for farmers in many areas to move grain through the CWB when they don’t have access to a company willing to handle CWB grain. It is dishonest to blame farmers for not doing business with a CWB that cannot physically handle their grain.
If Phillips subscribes to the use it or lose it philosophy, than why doesn’t he apply it to his own organization? Why not have public policy meetings so farmers can direct the Grain Growers group to do things farmers want – not what the government wants? Why didn’t they support the right of farmers to vote on the changes to the CWB, instead of acting like Conservative lackeys? Why does the Grain Growers hide behind the its phoney membership of industry-dominated check-off organizations?
If the CWB fails, it cannot be blamed on farmers, period – full stop. We never got our right to vote because folks like Philips thought farmers weren’t smart enough to pick our own future.
The current legislation ends the CWB in less than five years. We can thank the Conservatives, as well as characters like Phillips who acted as their mouthpiece for setting the CWB up for a fall. I hope Mr. Phillips enjoys his day in the sun being rewarded by having the Minister’s ear.
Kyle Korneychuk, Pelly, Sask.
Con Board
Letter to the Editor: March 28, 2012
I attended the CWB meeting in Ohaton AB along with about 150 other farmers to hear about the changing landscape to grain marketing and the CWB without the single desk. I knew real farmers were there because the street was lined with ½ tons.
The first presentation was a sugar coated package by CWB employee Gord Flaten about how wonderful it was that Harper & Ritz are paying off the Lakers cost, and the severance costs of fired CWB employees. He neglected to tell the farmers that our own money earned from grain sales and put into our contingency fund was paying for this. He went on to say this new Grain Agency or Company, the “Conservative Wheat Board” (Con Board) would be a functioning Company on Aug.1 2012.
The new Con Board will be keeping the Office Bld. in Winnipeg, 1700 or so Hopper Cars, the Lakers, and a scaled down staff. Flaten went on to explain the grain marketing programs of the new Con Board. On the question of where the profits will go on grain sales outside the Pools, Flaten dropped a bombshell when he said “it will go to the Government.”
There was a rumble of disgust and annoyance across the room when farmers heard that the Harper & Ritz Govt will use the profits from farmers’ grain to do as they please. Flaten responded by saying farmers needed to think long term, the next 4 yrs. about what they want to see happen with the Con Board. He said farmers could buy it back, that we needed to talk to our MP’s, and other farmers, and act or it will be sold off.
Why would farmers want to support the Con Board for the next 4 yrs. to sustain assets we once owned? Why play that game when Harper & Ritz hold all the cards in their stacked deck?
As I see it there are two options. The court has ruled Ritz broke the rule of law, so they must enforce that ruling and give us back our Wheat Board, or sell all the assets and pay it out to Western Canadian Farmers.
Dale Fankhanel
New Norway
Poetic Justice
There once was a PM named Stephen,
who said “With my majority, I’ll get even.
They’ll be down on one knee at the CWB
and only 62 percent will be grieving.”
By Don Bamber
Western Producer, Feb. 14, 2012
Speak Up
This poem was published by a German Social activist, Pastor Martin Niemoller in 1945.
He had spent the war in labour camps because of his views of the actions of the government of Germany.
They came first for the Communists,
and I did not speak up because I was not a Communist.
Then they came for the Jews,
and I did not speak up because I was not a Jew.
Then they came for the Trade Unionists.
and I did not speak up because I was not a Trade Unionist.
Then they came for the Catholics,
and I did not speak up because I was Protestant.
And then they came for me,
and there was no one left to speak up.
Martin Niemoller (1892 – 1984)
So who will speak up for you when
- The grain companies decide they want another $20/T for elevation.
- The railways decide they need another $50/T to take your grain to the coast.
Don’t forget….they already came for our Canadian Wheat Board.
Darrell Stokes
Hussar AB
Trading Grain Companies instead of grain
by Herb Schulz
Winnipeg
The “expressions of interest” to buy Viterra “Canada’s biggest publicly-traded grain handler” by foreign-owned agri-food giants (“Sask. To Weigh Impact Of Viterra Takeover”) indicates the Harper Government’s emasculation of the Canadian Wheat Board has made grain-handling so profitable for CORPORATIONS that it has induced trade in grain COMPANIES instead of grain.
A warning to Canadians about grain quality
Dear Concerned Parties,
(March 7, 2012) The Harper Government is proposing the elimination of mandatory requirements for inward inspection and weighing at licensed terminal and transfer elevators. The Canadian Grain Commission issued a letter to external industry stakeholders on Tuesday February 8, 2012, requesting feedback regarding the proposed changes.
How this will affect producers:
Grain shipped by hard working Canadian farmers to terminal and transfer elevators will no longer be officially inspected and weighed. The results of this change will jeopardize the protection for producers from the lucrative, often undependable railways or the profitable, multi-national grain companies. Prior to unload, there will no longer be unbiased Government inspections to carriers, which assist the producers in any claim against the railways. During unload, there will no longer be the monitoring of terminal and transfer elevator operating practices by highly trained professionals. The grade and weights used for payment will instead be issued by the companies themselves. Further, there will be no mechanism in place to resolve any disputes regarding weight and grade (Dispute Resolution and Grain Appeal), should the producer disagree with the terminal or transfer elevator’s decision.
How this will affect Consumers:
The Canadian public is being put at risk by a decision that ultimately affects the finished food product. Without regulated handling, we are seriously concerned about the undetected presence of toxins and foreign material in grain. The changes that the Canadian Government is proposing will protect and regulate export shipments, while neglecting to do the same for the Canadian market.
The Canadian Grain Act was enacted due to farmers lobbying the Canadian Government for legislation that would help protect them against unfair practices. The Act streamlined existing legislation and regulations about grain and grain handling to achieve this. As well, the Board of Grain Commissioners (as the Canadian Grain Commission was then called) was created with a mandate to work in the interest of farmers. Since 1912, the Canadian Grain Commission has helped farmers and grain dealers work together by offering a neutral perspective.
Please be aware of the negative effects of these proposed changes for Canadian producers. Please speak up in response to these changes. The Canadian Grain Act came into effect due to Canadian farmers lobbying for protection; we need that same vigour now.
We need you to speak up!
Sincerely,
Jenn Kovacs, Agriculture Local 30 President Thunder Bay, ON
Hardly done deal
By Kyle Korneychuk,
The StarPhoenix, January 30, 2012
It was really quite funny to watch the agriculture minister strut in front of his flock at the Western Canadian Wheat Growers’ conference.
He used his bully pulpit to describe as baseless the recent court cases against his government over legislation to dismantle the Canadian Wheat Board’s single desk.
Like so many bullies, Gerry Ritz first sounded arrogant in saying: “We’re still very antagonistic with the eight and the Friends of the Board.” Then he started to sound desperate and almost delusional in saying: “This is a done deal, folks. No one is going to blink at this point and no one is going to change. C-18 is the law of the land.”
At least one Federal Court judge has disagreed, so I’m not sure if Ritz is trying to convince himself or his boss, Stephen Harper, that it’s a done deal. However, it appears that the Western Grain Elevator Association and even the wheat growers aren’t convinced. They continue to appeal the court rulings and are trying to get intervener status in other cases. If it’s a done deal, what do they hope to gain?
Farmers are using their own money to defend our wheat board. However, it appears the elevator association and wheat growers have access to an endless stream of money. For a minister who was so critical of the CWB spending money on legal cases, Ritz seems to have no hesitancy in watching his shadow groups blow money supporting his dirty work.
Kyle Korneychuk,
Pelly, Saskatchewan
Recipe for failure
By Leo Howse,
The StarPhoenix, January 27, 2012
If someone had told me the Canadian Wheat Board would have a chairman who was not a farmer, I would have said they were crazy.
How could an organization that represents farmers have anyone other than a farmer as its chair?
But Gerry’s Grain Company is nothing like the former CWB. It has no farmer-elected directors, as (Agriculture Minister) Gerry Ritz appointed them all. Its chair is a former grain company executive from a failed grain company.
Instead of making money for farmers, Gerry’s company will be taking money from farmers. It is no longer the farmers’ voice in negotiating freight rates, ocean shipping, blending, or even grain handling fees.
CIBC reports that it expects Viterra alone to earn an extra $40 million to $50 million a year without the CWB. That’s money coming from farmers.
Some are now calling Ritz’s wheat board another grain company. However, it has no elevators, no agents, no delivery points, few field staff, no terminal elevators, and a mandated life expectancy of five years or less. This doesn’t sound like a winning recipe. It sounds like buying shares in an ostrich farm.
Leo Howse
Porcupine Plain
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