Research finds need for car oversight

MOOSE JAW, Sask. — Economic models show that the grain backlogs of 2013-14 and this past winter would not have been as bad if the Canadian Wheat Board car allocation process had been in place.

University of Saskatchewan master’s student Devin Serfas said his research shows that the grain shipping system would benefit from some type of car oversight.

His research paper was accepted for the International Conference of Agricultural Economists later this summer in Vancouver, but he presented some of his results at the recent Farming For Profit? conference.

Serfas said he ran eight models that all found the same result.

“From these results the Canadian Wheat Board had a significant impact on inland terminal turnover ratio and grain deliveries to stations,” he said.

“This is after we control for production, and distance to port, railway company, elevator company, terminal capacity and car spots.

“These results suggest that if the Canadian Wheat Board regime would have maintained its stay within the rail crisis period, we would have seen a positively significant increased grain handling performance, which would have also lowered the export basis and increased producer returns.”

Serfas said his research doesn’t address the question of whether the CWB should be re-instated, and he isn’t calling for a single desk marketing system, but it does point to the board’s impact on logistics.

“I can’t argue with the numbers,” he said in an interview. “When I run the models, this is the effect the Canadian Wheat Board had.”

He said even accounting for record production, the board’s logistics function should have better managed the cars.

Railways like to split up trains, which might not be efficient for grain companies, he said.

“In terms of setting aside the capacity the elevators have to move this grain, I think there might be improvements on the railway side and modelling how they can distribute cars to certain regions in Western Canada,” he said. “In order for it to be as efficient as possible, they would need an overseer and (to) work together.”

Derek Brewin, an agricultural economist at the University of Manitoba, said Serfas’s results might be useful to the railways.

“If I was a railway and I look at your results, I would think it’s in my interest to start behaving a lot more like the wheat board in the way I allocate cars,” he said after the presentation.

Vaughn Crone, a farmer from Central Butte, Sask., said he can see the value in better car management. Farmers were for or against the board for different reasons, but its organizational skills were an asset, he added.

Serfas said the recent transportation crises might make producers who wanted the government out of the way more willing to accept some oversight.

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