The Canadian Wheat Board’s decision to pay freight charges directly to the railways won’t affect the grain companies’ ability to make use of incentive rate programs, says a CWB official.
“At the end of the day, the savings from incentive rates will still go to the grain companies,” said CWB spokesperson Trish Jordan.
She said the board has made those assurances verbally and in writing to grain handling firms. Whether those savings are passed back to producers through trucking premiums, tariff adjustments or other programs, will still be up to the grain companies.
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Earlier this month, the board announced it would be named on the railways’ bill of lading for all shipments of CWB grain.
Previously, the company handling the grain was named.
The board made the move to ensure that it would be considered the legal shipper of CWB grain and be able to participate fully in new shipping programs introduced by CP Rail.
However, some farm groups worried the change might create problems administering various rate discount programs offered by the railways to grain elevator companies.
The most outspoken criticism came from the Western Barley Growers Association, which said the board could “confiscate” trucking premiums offered to farmers by grain handlers.
The barley growers said the incentive payments for block loading of rail cars would go to the board rather than the grain companies, meaning that the money grain companies passed on to farmers in the form of trucking premiums will no longer be available.
“Farmers will lose the opportunity to recover some of the increased trucking costs that they now pay because of elevator closures,” said WBGA vice-president Russ Larson, who is running for election to the CWB board of directors in District 6.
“The CWB is taking money right out of farmers’ pockets when they deliver grain.”
Larson However, Jordan said that interpretation is not true. She said the board will be billed by the two national railways in two ways.
- CN Rail will bill the board at the single car rate for all shipments. The board will pay that bill to the railway. Grain shippers that qualify for incentive rates will then be reimbursed by CN.
- CP Rail will bill the board at the multiple car rate. The board will then figure out which shipments are eligible for the lower incentive rate and reimburse the elevator company directly.
“We have told the grain companies that we have no intention of keeping the incentive rate savings. We recognize that they are to go to the grain company,” said Jordan.
