Ottawa’s decision to end weekly grain shipping targets is receiving mostly negative reviews this week from Western Canada’s farmers and agricultural shippers.
The Agricultural Producers Association of Saskatchewan said it was disappointed in Ottawa’s decision, suggesting the federal government should have renewed and strengthened the order.
The Western Canadian Wheat Growers Association said it supports Ottawa’s decision to end the targets, but it added that Western Canada’s grain shipping system still needs “a significant overhaul” to avoid a repeat of problems faced in the past 16 months.
The Western Grain Elevators Association, which represents Western Canada’s largest grain companies, said it was not surprised by Ottawa’s decision, but it urged the federal government to focus on finding long-term solutions to chronic rail service issues.
And in Manitoba, officials from Keystone Agricultural Producers said they would have preferred to see Ottawa retain the mandatory volume requirements and add additional volume requirements for unregulated corridors to the United States and Eastern Canada.
Canadian National Railway said it supports Ottawa’s decision.
“Canada’s grain supply chain is fully back in sync in all corridors, and CN continues its record-setting grain movements in the 2014-15 crop year,” the company said.
The federal government announced March 28 that it will not renew an order requiring Canada’s two largest railway companies to move minimum amounts of grain each week or face fines as high as $100,000 per week for non-compliance.
Grain shippers across the West are now watching to see how service will be affected.
Ottawa introduced mandatory volume requirements for grain in March 2014, at a time when the flow of prairie grain had slowed to a crawl and millions of tonnes of grain were backed up at country elevators across the West.
In a joint statement issued last weekend, federal agriculture minister Gerry Ritz and federal transport minister Lisa Raitt said overall grain movements have improved.
Projected grain carryouts entering the 2015-16 crop year should be “within the average range historically,” the ministers said.
However, Ottawa warned that mandatory volume requirements could be reintroduced if the grain supply chain “compromises farmers livelihoods, the economy or Canada’s international reputation as a reliable shipper.”
Ritz and Raitt also said improvements to the federal Grain Monitoring Program, combined with new data being collected by the Ag Transport Coalition, will result in greater transparency and “help individual shippers make business decisions.”
As of March 28, the Grain Monitoring Program begin publishing grain movement and railway performance data on a monthly basis.
In addition, it will also begin monitoring:
- Movements of western Canadian grain on unregulated corridors to the United States, Mexico and Eastern Canada.
- The size of railway fleets serving the grain industry.
- Unloading delays at port terminals caused by either a lack of terminal staff or lack of grain cars to unload.
- Railway performance in terms of rail car order fulfillment.
James Battershill, general manager at KAP, said his organization is pleased that the government has recognized the need for improved monitoring and enhanced data collection.
He said the amount of Manitoba grain and specialty crops shipped south to markets in the U.S. and Mexico has fallen off substantially over the past year.
Recent data collected by the Ag Transport Coalition suggests that more than a third of the car order requests submitted by southern corridor shippers in the 2014-15 crop year are still outstanding.
In a March 30 statement, APAS vice-president Arlynn Kurtz said Ottawa’s decision to let the minimum volume requirements expire will affect all producers in the province.
“Producers continue to face incredibly reduced revenues at local elevators, unreliable service and cash flow constraints at a time when we are preparing for our most significant capital investment time of the growing year.”