Arthur Kroeger doesn’t have much sympathy for those who don’t like his report on reforming the grain handling and transportation system.
His contentious recommendations to the federal government have been met with a near-unanimous chorus of criticism and complaint from grain industry interest groups.
But Kroeger said in an interview last week that the complainers have only themselves to blame.
“I would have been much more comfortable if the stakeholders could have worked it out amongst themselves, but the fear and mistrust of each other was too great,” he said.
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The retired civil servant led four months of consultations among farmers, railways, grain companies and government, aimed at figuring out how to implement the reform proposals put forward last year by justice Willard Estey.
Kroeger’s recommendations, released Oct. 5, triggered an avalanche of reaction from the affected parties, virtually all of it negative.
No money to re-invest
The railways complained that his proposals would starve them of the revenues they need to re-invest in the rail system and leave too much regulation in the system.
Some farm groups complained his recommendations would provide windfall profits for the railways at the expense of farmers, and leave producers and grain shippers with no protection.
Other farm groups complained the recommendations didn’t move far enough or fast enough toward creating a fully commercial, deregulated system.
The Canadian Wheat Board complained the proposals leave farmers at the mercy of the railways and make it impossible for the board to properly carry out its job of marketing grain.
Kroeger said he’s not surprised at the negative reaction, joking that he had spent most of the day “reading my fan mail.”
He said his recommendations on the major issues reflected an attempt to find the “middle course,” an approach that is bound to attract criticism from all sides.
And he said the reaction continues the trend that was evident in the consultations, with stakeholders unwilling to set aside their own selfish interests and reach a consensus on how the system could be improved.
“During the process, everybody was fixated on their own particular problems, their own particular needs, their own particular interests,” he said. “They didn’t ask themselves often enough if it would be good for the overall system.”
That left it up to him to make recommendations to Ottawa, keeping in mind that the government had made it clear that it supported the basic thrust of the Estey report.
“Estey said go to a more commercial, contract-based system and the government said it agreed with that,” said Kroeger. “That was a fairly clear framework for me.”
He said that if he had found during the consultations that moving along that path would create major practical problems, then he would have said so in his report.
“I did not find any such problems, and that being so it seemed to me the advice I gave the government should be in the framework they and previous governments have been operating in.”
The major recommendations put forward by Kroeger include:
- Replacing the freight rate cap with a revenue cap. The cap would initially be set at $838 million, which is 12 percent, or $3.73 per tonne, below the railways’ 1998 revenues of $950 million. There would be no regulated sharing of future productivity gains. Rather, savings would be passed to farmers through increased competition among railways and grain companies.
- Steps should be taken to increase competition between the railways. However, the report made no specific recommendations on issues like open access to rail lines or interswitching, saying the government should consider the issue further.
- In case of disputes between shippers and railways, a system of final offer arbitration should be set up in which shippers and railways would simultaneously submit offers to an arbitrator.
- The wheat board would no longer be involved in day-to-day transportation planning and co-ordination. Railways and grain companies would handle the logistics of moving grain from country elevators to export positions based on commercial contracts. A system of tendering for grain movement would be phased in over the next three years.
