SASKATOON – It’s frustrating, but not surprising, that the grain industry can’t agree on how to allocate rail cars, say farmers on the senior grain transportation committee.
“It really doesn’t surprise me,” said Russell Paul, a committee member who farms near Simmie, Sask.
“The industry is always in turmoil because nobody can agree on anything. It’s been that way for years and it will probably never change.”
Committee chair Manson Moir, who farms at Tilston, Man., said the car allocation issue will be on the agenda at the SGTC’s next meeting Oct. 14 in Winnipeg.
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While he’s disappointed the various competing interests in the grain industry can’t agree on how to ration a limited supply of rail cars, he concedes that may be too much to hope for.
“There’s too many players coming at it from too many directions,” he said. “They all are protecting their own interests and I don’t blame them for that.”
During the summer, the Grain Transportation Agency sponsored a series of meetings aimed at developing a new car allocation system for 1994-95.
The plan was to establish fair and equitable rationing of limited rail car supplies during periods of peak demand.
But on Sept. 9 the agency declared the effort a failure and announced a short-term policy that, not surprisingly, drew criticism from all sides.
“At one point we were hopeful that we would arrive at some consensus through the car allocation focus group, but in the end it seemed unattainable,” said Bruce McFadden, the GTA’s director of operations.
The focus group originally proposed doling out cars on the basis of historical market share. Small shippers said the large line companies were trying to prevent them from gaining more of the market. Two more meetings were held at which small shippers argued for a sales-based system, but no agreement could be reached.
The new system, in place for this crop year only, will allocate West Coast cars on the basis of each exporter’s share of last year’s export clearances. Five percent of non-board cars will be set aside for new entrants and small shippers.
At Thunder Bay, until the close of navigation, non-board allocations will be based on sales with a special registry set up to ensure companies don’t over-sell in order to gain additional cars.
New policy draws criticism
The GTA’s unilateral announcement led to renewed criticism of the agency from some farm groups and Reform politicians, who advocate a totally deregulated transportation system. Rail cars would become just another commercially-traded commodity, rationed by the law of supply and demand.
SGTC member Glenn Sawyer, a farmer from Acme, Alta., doesn’t like the new policy, which he said will limit the number of companies bidding for his canola. The GTA is “past its usefulness”, he said, and the solution is deregulation.
But Harry-Jae Elder, committee member from Fillmore, disagrees, saying the GTA has become a scapegoat for bickering industry groups and those who want deregulation for purely ideological reasons.
