Rail problems continue as Prairie ag groups tackle CTA review

CNS Canada — Better data, equitable service regardless of where you live and service contracts with teeth are just some of the ideas being tossed around by Prairie farm leaders taking part in the Canadian Transportation Act review.

“Producers want to see equitable service for everyone,” said Norm Hall, chairman of the Agricultural Producers Association of Saskatchewan (APAS).

Despite the order in council the federal government delivered to railways last year, there are still problems with railcar deliveries, he said.

“I ordered some cars on Aug. 1, and they were supposed to be here for October delivery; so they were confirmed in January and this was the last week of February and nothing yet.”

Similar problems are being felt in Alberta, according to Alberta Federation of Agriculture president Lynn Jacobson.

“Most of the elevators here are plugged up, they haven’t moved grain in over a month,” he said, adding his directors recently surveyed elevators in their respective areas. They found one company wasn’t signing hard wheat or CPS contracts at all.

“Railways are in charge of the car allocation system and really they shouldn’t be,” he said, noting the situation may have been slightly different when the Canadian Wheat Board was still a monopoly.

Prairie leaders were in Ottawa last week as part of the federal review launched last June into the country’s transportation legislation, discussing the changes they want to see happening.

One of the main problems they have outlined to the government is the lack of information producers have when it comes to understanding where their orders are.

Manitoba farm group Keystone Agricultural Producers (KAP) is on a subcommittee examining the issue of data.

The group’s new president, grain grower Dan Mazier of Justice, Man., said he was interested to find out much of the information they want is winding up in the U.S.

“(It) goes down to a main central computer system in West Virginia,” where shippers and elevator associations ultimately paid to access it, he said.

More transparency is required so shippers aren’t always guessing where their cars are, he said.

Hall agreed, “whether it’s Joe Farmer on the main line that hauls to Viterra or Joe Farmer B that’s on the main line and wants to ship by producer cars,” he said.

Mazier estimated the accuracy of getting a grain car is about 31 to 32 per cent, which ultimately costs the producer.

“If you’re a shipper of grain, or buyer and you knew you only had a 32 per cent chance of getting your cars in, you would just put it in the basis; the fudge factor. I don’t blame ’em, but talk about inefficient,” he said.

“Controlling the economy”

For Jacobson, both grain shippers and railroads have to be held accountable for non-performance.

“We’ve got to have service contracts with penalties,” he said. “Railways have to show how many cars they can actually supply each week, along with a breakdown of the allocation.”

As for grain companies, Jacobson said he wants sales to be reported to government, detailing a delivery period and how it will get to port.

Mazier agreed better regulation is the route to go. “So when you have a monopolistic type of system and you’re controlling the economy of a country, the only way to simulate competition is through regulation.”

The chairman of the CTA review, Canada’s former international trade minister David Emerson, is scheduled to present the Review’s recommendations to Transportation Minister Lisa Raitt by Christmas this year.

Hall said he believes it could take another few years after that before any meaningful legislation is actually passed.

— Dave Sims writes for Commodity News Service Canada, a Winnipeg company specializing in grain and commodity market reporting.