MELVILLE, Sask. – Farmers struggled with an old problem at a recent Canadian Wheat Board information meeting here.
“Why should farmers be charged all the demurrage?” asked Merv Werk, a farmer from Fenwood, northwest of Melville.
Since the wheat board says it strives to make the most money possible for farmers, Werk asked the board at the March 5 meeting if it would negotiate sharing demurrage charges among all the players. Demurrage is compensation paid to shipowners for loading delays.
Rick Steinke, a wheat board marketing manager, said staff have tried to reduce demurrage charges by increasing the amount of money gained from grain loaded into ships ahead of deadline, a practice called despatch.
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
He said the possibility of charging demurrage to and earning despatch on rail cars has been discussed.
According to CWB financial statements, demurrage costs for wheat in 1994-95 were 31.6 cents per tonne, or about $4.6 million. In the durum account, demurrage totaled just over half a million dollars, or 13 cents a tonne.
The highest demurrage payments were for feed barley. The board paid $7.1 million, or $6.74 per tonne, largely because supplies couldn’t get to port.
Demurrage costs for designated barley were $371,000, or 16 cents a tonne.
CWB commissioner Gordon Machej said the board isn’t the only one charging producers.
“Have you ever paid demurrage on canola?” he asked the crowd. “Well I can tell you, you have but you don’t see it.”
CWB advisory committee member Micheal Halyk said despatch in the wheat account equaled about half of demurrage charges.
Pat Stewardson, representing the Hudson Bay Route Association, said a study should be done on where demurrage originates.
“Why should the farmer be held accountable for Mother Nature if there is inability to load due to weather?” she said. “We have to get more ethics into the system. Those who are responsible should pick up the cost.”
