Grain Growers of Canada is calling on Ottawa and the railways to come up with a rail capacity plan to deal with current and looming economic damage caused by inadequate car numbers.
The Ottawa-based farm lobby group that often has the ear of agriculture minister Gerry Ritz sent a letter the minister and transport minister Lisa Rait warning that this winter’s grain delivery backlog because of a large crop and insufficient rail service is costing the farm and food industry millions of dollars in added costs and lost income.
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“We ask the federal government to seriously assess the evolving rail capacity issues for Canadian farmers and provide recommendations for alleviating the concerns we have brought forward,” wrote GGC president Gary Stanford.
“Farmers across Canada are anxious to learn if the railways are formulating plans to accommodate the immediate needs with action and if they are working on a long-term future plan to accommodate larger volumes for grains and oilseeds for next year and going forward.”
Grain Growers said with new improved varieties, rail carriers should expect larger volumes as a regular occurrence in future. “Last year’s harvest is the new normal.”
Meanwhile, use of rail cars to move fuel and crude oil has risen by 33 percent during the past year, twice the rate of increase in grain cars moving the 2013 crop.
The farm lobby told the ministers that the grain movement backlog has cost an estimated $20 million in demurrage for late delivery to port, has reduced the amount of feed grain available to the Fraser Valley livestock industry and is affecting the ability of millers, food manufacturers and maltsters to get feed stocks and then move their product to market.
The grain backlog “is beginning to have an effect on the national food supply.”
At the farm level, the cost is unsold grain and squeezed cash flow.
“Carryover stocks for several of the grains will be large,” said Stanford. “In many cases, this could mean farmers not being paid for last year’s harvest until after spring planting, translating into lost sales and a serious cash flow issue for many farmers.”
