Saskatchewan Wheat Pool president Leroy Larsen says Willard Estey’s recommendations would improve the grain transportation system by allocating responsibility for specific functions.
“One thing we asked for is some accountability in the system,” Larsen told a news conference in Regina after the Estey report was released.
“That we have seen as a shortcoming in today’s system.”
Part of the reason for the lengthy legal battle between the Canadian Wheat Board and CP Rail over the level of service in the winter of 1996-97, he said, was a “lack of accountability.”
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“The grain industry is changing. We need to make sure the logistics, the transportation and handling system, fit with today’s environment. The recommendations probably will bring some accountability – put some responsibilities on Saskatchewan Wheat Pool, on the railroads – that are not there currently. Hopefully, those will be a benefit to producers.”
Larsen said Estey’s proposals are aimed at improving the system’s efficiency and passing some of the benefits on to farmers: “Right now, I think the railroads are capturing a number of efficiencies and putting it in their pocket.”
Because elevator companies are competitive, he said, if they get savings in rail charges they are likely to pass them on to producers.
Asked about Estey’s proposal to replace the wheat board’s role in car allocation with a contract-based system in which the board pulls from port, Larsen said: “I think it can work. I think we have to make sure none of the players has too big a lever to pull here. I would be concerned about the railroads having excessive power.”
Larsen said he is also concerned about the recommendation for removal of the maximum rate cap.
“Unless there is proven competition between the railroads, we have what is called a duopoly. We need some competition or some regulation to protect the producer from excessive charges.”
He said Estey’s report is sketchy on how short-line rail companies could gain access to the two major railways’ track.
Larsen said he hopes federal transport minister David Collenette “will act quickly if the recommendations are seen beneficial to the farmer and to the industry.”
“We wanted accountability, we wanted to capture efficiencies for the producers.
“We have to have efficiencies in the whole transportation system if we’re going to be competitive in the international grain market.”
