Farmers will dig a little deeper into their pockets when they unload
grain at local elevators this year.
Most grain companies are increasing handling charges for 2002-03,
according to maximum tariff figures filed with the Canadian Grain
Commission.
That doesn’t sit well with at least one farm organization official,
especially in light of the drought and cash squeeze facing grain
growers.
“I’m disappointed to see the increases, but I’m not surprised,”
National Farmers Union president Stewart Wells said from his farm near
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Swift Current, Sask.
“Because we’re losing the Canadian, co-operative component of our
system and any meaningful competition, the grain companies can charge
whatever they want.”
The rate of increases vary and not all of the major companies could be
reached to confirm their new charges. Also, some companies adjust their
tariffs in September after seeing their competitors’ rates.
One company that has decided is Saskatchewan Wheat Pool. It is raising
its maximum elevation and cleaning tariffs by about four percent.
That will put the company’s elevation fee for wheat at $11.63 a tonne,
up from $11.18, while the cleaning charge will be $3.83 a tonne, up
from $3.68.
Will Hill, vice-president of Sask Pool’s grain group, said the tariffs
filed with the commission are maximums and don’t necessarily reflect
the
actual costs at individual elevators.
“We can charge less than those numbers, plus there are trucking
premiums and other programs in place to save producers money.”
The four percent rise is designed to reflect inflationary increases in
operating costs, he said, adding that the company is concerned about
the impact on farmers, but it also has to keep its financial house in
order.
Most companies are losing money handling grain, and with grain volumes
expected to fall sharply, that’s unlikely to change this year.
Several farmer-owned inland terminal companies are also raising maximum
tariffs.
For example, Mid-Sask Terminal Ltd. of Watrous, Sask., is raising its
charges by four percent while Great Sandhills Terminal Ltd. of Leader,
Sask., is bumping its fees up by five percent.
Officials with both companies said the increase is partly due to higher
operating costs, but also reflects the financial impact of commercial
tendering of Canadian Wheat Board grain shipments.
“The biggest factor is the tendering,” said Great Sandhills manager Jim
Major. “Those costs were a lot higher than anyone anticipated.”
Some tenders last year were in the range of $10-$14 a tonne.
“When you have a total tariff of $10.40 a tonne and have to pay $11 or
$14 on tendered cars, you’re losing money.”
Mid-Sask manager Blaine Kunkel said he hopes that with tendering
increasing to 50 percent of CWB shipments in 2002-03 from 25 percent
last year, the line companies may be less aggressive in their bids.
“At 50 percent, grain companies cannot continue to tender at $10 a
tonne,” he said.
Wells said the tariff increases drive home the importance of
maintaining the right of farmers to bypass the elevator system by
loading and shipping their own rail cars.
“That’s why producer cars are so important,” he said. “They are the
only meaningful watchdog on the system.”
