Grains council plans to examine transport systems worldwide

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Published: April 21, 1994

VANCOUVER – The Canada Grains Council plans to lead a series of studies looking at how Canadian farmers, grain companies, railways and ports stand up to the United States, Australia and the European Union.

A work plan will be developed by the end of April, said council president Doug Campbell after the council’s annual meeting.

He said the council wanted to find out where the grain industry is today compared to 10 years ago, and also compare it to other countries.

There’s already circumstantial evidence: terminal elevator tariffs in the U.S. are as cheap as $3/tonne compared to Canada where they’re $9 to $10/tonne.

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“Once this is sorted out, (what) we’ll see is Canada being hurt because processing costs or handling costs are higher than at U.S. or Australian ports,” he said.

The grains council also passed a motion last week that there be a ministerial level inquiry to look at grain transportation.

Council members, as well as outside groups such as the prairie wheat pools, will be asked to offer input in identifying a list of operating improvements for grain transportation on an “ad hoc and long-term basis.”

Campbell said with the continued pressure, lost sales and demurrage bills, there’s a need in the industry to work together defining and solving the problems on a fast-track basis.

He said there’s a sense of frustration that a number of committees in the industry are in gridlock or aren’t co-operating with each other. There’s a need to involve all aspects of the industry, from the farmers to the grain customers.

For now, farmers are in the dark not knowing what’s being done to find solutions to the transportation problem, and “patience has worn pretty thin” by the customers, some of whom have ships waiting up to 40 days in the west coast harbour to be loaded.

They’re costing a third of a million dollars a day in demurrage, Campbell said.

He added that he doesn’t expect that to be cleaned up before the end of the crop year.

Farmers can still load grains into railway cars and ship them to ports even if there aren’t current markets for their products: These then take up valuable space in or near the terminals, don’t get penalized, and transfer the problem through the whole industry.

Demurrage charged

Other commodities such as sulphur charge demurrage for such a situation, and discourage such messes, he said.

The four areas the council has identified as its priorities this year are trade, transport reform, competitiveness, and new and value-added products.

While the council will examine the different international and North American trade agreements Canada has become involved in, it also considers significant the countries who didn’t join the General Agreement on Tariffs and Trade – Russia, China and Saudi Arabia.

“If there are problems with credit, we want to look at credit terms, barter, or other methods, and if we are competitive.”

Internal trade reform and overcoming interprovincial trade barriers are also high on the agenda.

The export capability of the West Coast will be examined: “We are trying to address the confidence of the buyers in Canada as a reliable exporter.

Reforming the Western Grain Transportation Act is also high on the list.

Ontario’s feed industry expressed its distress after WGTA-subsidized western grain disrupted the eastern industry. The large marketplace in the province usually uses four million tonnes of Ontario corn and a million tonnes of western grain. This year, the ratio changed to half and half.

As for the area of new or value-added products, Campbell said biotechnology – with its environmental, health and ethical concerns – needs to be dealt with. Information and more research may be needed on new products such as ethanol, noodles from soft wheats, or even straw particle board.

About the author

Elaine Shein

Saskatoon newsroom

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