Farmers will be stripped of their voice in the grain transportation system if the Estey report is adopted, says a producer involved in grain transportation planning.
Jim Robbins, a Saskatchewan farmer and the lone producer representative on the Car Allocation Policy Group, said the report advocates giving all the power in the system to grain companies and railways.
“At least in CAPG we have a farmer at the table listening to what policy is being put into place,” he said. “Under Estey’s recommendations, we’re completely out of the picture.”
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In his report to federal transport minister David Collenette, retired Supreme Court justice Willard Estey recommended doing away with CAPG, an industry committee that each week allocates the available supply of rail cars between Canadian Wheat Board and non-board grains.
Car supply should be negotiated between shippers and railways, Estey said in the report, although he provided no detailed plan on how. He proposed a meeting of railways, grain companies and farm groups to set up an acceptable process.
Estey also recommended that the wheat board be stripped of the central role it plays in transportation planning. The board would stick to selling grain, while the grain companies and railways would be responsible for getting it to export ports to fill the wheat board’s orders.
Bad for farmers
Robbins said those two recommendations freeze farmers out of the transportation system.
“I don’t see any place where farmers, elected or otherwise, would have direct input,” he said in an interview from his farm at Laura, Sask.
Saskatchewan Wheat Pool president Leroy Larsen is less concerned saying he doesn’t think farmers have much control over the system anyway.
“The level of input by producers is very insignificant under the current system,” he said.
With or without CAPG, the process of dividing up cars for different grains and among grain companies will still be carried out in essentially the same manner.
As for the proposed change in the wheat board’s role, Larsen said the board would still control the movement from the farm to the grain companies and would still take ownership of the grain once it reached port.
“The logistics of getting it to port is what would change, and I guess we’ve got to look at what input do producers need in the logistics of moving that grain from the grain company to port position,” he said.
Estey said in his report that during the review, the current allocation system was criticized by grain companies and railways.
Railways repeated their longstanding complaints about having a “third party” having control over car allocation. Grain companies complained that the allocation split between board and non-board grains sometimes works to the detriment of the movement of non-board grains.
“At times, cars allocated to move board grains would have been more profitably employed in moving canola or other non-board gains,” Estey wrote.
But Robbins disputed that, saying the opposite is more often true.
“There’s not much evidence of non-boards taking second place,” he said. “In fact, I think the board is often too reasonable.”
He cited this fall’s unexpectedly high canola shipments through the West Coast. Previously negotiated car allocations to board and non-board-controlled grains would not have accommodated the level of canola movement that materialized. For several weeks the wheat board didn’t pick up some of its allotted cars, freeing them up for canola.
Officials from the two national railways were reluctant to comment on the Estey recommendations, saying they needed time to study the report.
Jim Feeny of CN Rail acknowledged the railway has been critical of the CAPG system.
“We’ve said in the past that a direct relationship (between shippers and railway) would be a more efficient way to go,” he said.
While recommending an end to CAPG, Estey said there may be a need for a federally appointed “referee” to handle complaints when cars are in short supply. The referee would have the power to order the railways to get more cars or pay damages to affected shippers.
Robbins said cars are usually in short supply for at least six months of the year going to the West Coast, meaning the referee would become almost a permanent part of the system.
“It sounds like ‘let’s get rid of the third party we have and let’s go back to the federal government providing a third party’, which I think the federal government is completely uninterested in doing.”
CAPG was created to take up some of the duties of the old Grain Transportation Agency, which was abolished when the Western Grain Transportation Act was replaced in 1995.
