The Canadian Wheat Board has loaned another $25,000 to a farmer-run organization trying to buy the federal government’s fleet of grain hopper cars.
The loan, approved by the CWB’s board of directors at its January meeting, brings the amount provided by the board to the Farmer Rail Car Coalition to $160,000 over the past four years.
That includes grants of $35,000 and $50,000 and a previous loan of $50,000.
CWB chair Ken Ritter said the financial assistance represents a small investment with the potential for huge returns in the form of lower grain transportation costs.
Read Also
Agriculture ministers agree to AgriStability changes
federal government proposed several months ago to increase the compensation rate from 80 to 90 per cent and double the maximum payment from $3 million to $6 million
“It’s a prudent expenditure of farmers’ money,” he said. “The alternatives are far, far more expensive.”
The FRCC wants to buy the roughly 12,000 cars for a nominal sum, then set up a non-profit farmer-run corporation to lease them to the railways. The coalition says it can save millions of dollars in maintenance costs, savings it says will be passed on to farmers in the form of lower freight rates.
Ritter said the board has studied the coalition’s business plan and is satisfied that it is a well-designed, solid proposal and the best option for farmers.
“It looks like it has the best chance of success and it is in farmers’ interests,” he said.
But a rival bidder for the cars is unhappy with the board’s decision to provide more money to the FRCC.
An organization called the Farmer Industry Partnership, made up of several commodity organizations and grain companies, has put forward its own proposal to buy the cars.
FIP spokesperson Albert Wagner of the Western Barley Growers Association said the wheat board shouldn’t give money to the FRCC or anyone else.
“We don’t think it’s appropriate for the wheat board to be putting money into any proposal,” he said.
“That’s not the way to spend farmers’ money.”
Cherilyn Jolly, president of the Western Canadian Wheat Growers Association, also a member of FIP, said the board’s mandate is to return all revenue from grain sales to farmers, not to spend it on “political” issues like grain transportation.
“They’re to speak on behalf of all western farmers and there is by no means a consensus among western farmers that the FRCC proposal is the right one,” she said.
Ritter said the FRCC has been around the longest and represents the most farmers through its 17 member organizations. He said it’s unclear whether the FIP represents the interests of farmers or its grain company members.
He added it wouldn’t be right for the government to turn over a taxpayer financed asset like the cars to the control of Western Canada’s grain companies, some of which are foreign owned.
“We have decided that FRCC is the group we’ll stick with and support,” he said, and urged other farm organizations to join the coalition.
FRCC president Sinclair Harrison said the board has provided valuable advice to the coalition on car ownership issues over the years, adding the group has also received financial support from the Saskatchewan Grain Car Corp. and the federal western diversification department.
Both national railways have said that while they would prefer the government continue providing the cars to them at no cost, they would bid for some of the cars under a commercial bidding process.
