WINNIPEG (Staff) – Leaders from Manitoba Pool Elevators and Keystone Agricultural Producers say their organizations knew that the formula to calculate the Crow payments would be inadequate.
However, it was only when the new freight rates were filed on Aug. 1 that the groups could confirm their suspicions. They put the numbers in a report they recently released with the Manitoba government.
“The division of the available dollars was based on historic recognition, without taking into consideration the impact for the future,” said Manitoba Pool president Charlie Swanson.
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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
The Manitoba analysis used a number of projections to consider the long-term impact, including:
- How increased freight costs will decrease producers’ net returns.
- Reduced federal contributions to the Net Income Stabilization Account because of lower producer contributions.
- The impact on the alfalfa dehydration industry.
- The one-time impact on land values.
Craig Lee, an assistant deputy minister who helped prepare the report, said the way the alfalfa industry will be compensated also works to Manitoba’s disadvantage.
“There’s a bit of double compensation in Alberta and Sask-atchewan at the expense of Manitoba,” Lee said. The majority of alfalfa dehy plants are in the other two provinces.
The report outlined how the government accounted for alfalfa dehy shipments when it determined how it would distribute the $1.6 billion Crow payout. The industry is to be compensated with $40 million from the adjustment fund.
