(Regina, April 19, 2012) In a Canadian Press story former Conservative Agriculture and Transportation Minister Chuck Strahl is obviously trying to distance himself from the ongoing disaster happening to prairie agriculture following the demise of the single-desk Canadian Wheat Board – a process he played a key role in starting.
His warning to Canadian Pacific Railway shareholder Pershing Square Capital Management that focusing on profits will hurt shippers is simply disingenuous. It is the rules and conditions Mr. Strahl helped to put in place that will allow this group to use its market power to take more money from farmers.
When Mr. Strahl was Minster of Agriculture and Transportation he only listened to calls from astro-turf farm groups like the Western Barley Growers Association with a membership of less than 130 farmers, to dismantle the single-desk of the Canadian Wheat Board. Real farm groups and the farmer controlled Wheat Board itself warned him that one of the negative consequences would be railways taking advantage of farmers’ loss of power to take more profits from farmers.
Strahl should have known that only the Wheat Board had the independence to challenge the railways. He certainly could not have missed the fact the only real improvement in railway service happened after the Wheat Board successfully sued both foreign-owned railways for poor service and took tens of millions of dollars in penalties from them.
He should also have known that grain handling companies, no matter how large are captive to the two railways and have seldom, if ever, launched level of service complaints with the Canadian Transportation Agency (Commission). Nor have the grain handling companies taken the railways to court as the farmer controlled CWB did. Rather than fight with the railways they simply pass extra costs onto farmers.
In the November 21/11 Macleans magazine there is a business section article where Pershing Square Capital Management indicated it expected freight rates on the prairies to increase anywhere between 25 and 50%. This will cripple most export oriented farmers. With the single-desk Wheat Board gone, knowledgeable people, like Mr. Strahl, are attempting to distance themselves from the disaster for grain producers unfolding on the prairies.