Most farm groups are pleased and relieved by the first phase of the Estey review.
But farmers and others in the grain industry are viewing the interim report as the starting gate in the real race to convince former supreme court justice Willard Estey to see it their way.
“He does seem to understand that farmers pay the bill and have very little influence,” said Sinclair Harrison, head of the Producer Car Coalition and a Saskatchewan farm leader.
Both the Western Canadian Wheat Growers Association and the National Farmers Union praised the report, from their opposing political perspectives. They said it is a fair representation of the issues that torment grain transportation.
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In this, Estey could consider his phase one a success, since the purpose was to lay out and discuss the major issues without drawing conclusions about their validity or suggesting solutions. That will occur after phase two.
Estey does, however, make some observations in the report that have heartened farm groups. Near the beginning he notes “all the costs incurred between the seeding of the crop and the delivery of the product to the end user are borne by the farmer.”
Later, he states that farmers have no direct say in rail rate setting, even though they pay the costs.
“Under the current system the farmer has no status to challenge those rates. The issue, therefore, is what process should be established in order to protect the interests of the farmer in ensuring that freight rate reductions and savings are passed on to him/her.”
He also said the value to farmers of the railways’ drive for efficiencies is unknown.
“It is problematic whether this saving in freight costs works its way down to the producer in any significant way.”
Estey notes the biggest issues for farmers appear to be rail-line abandonment and road damage caused by trucks.
The wheat growers association said it was happy Estey detailed three areas key to its concerns – the central planning role of the Canadian Wheat Board, the suggestion of removing the board from prairie grain shipments and only giving it control at port, and the need for accountability throughout the system.
The NFU said it was pleased to see in the report branch-line abandonment, road costs, the rate cap, the lack of rail competition, the role of the wheat board and hopper car ownership.
Harrison, who was generally pleased with the report, said he was alarmed that Estey suggested there was still debate about whether large grain trucks significantly damage rural roads: “I guess we thought we were past that.”
Because Estey is obviously not convinced that rail-line abandonment and grain trucks are mostly to blame for the condition of many rural roads, farmers will have to make sure they detail and explain these problems during the next phase, Harrison said.
Saskatchewan Wheat Pool president Leroy Larsen said he hopes farmers continue to be heard through phase two. “I would hope that Mr. Estey will weigh very carefully the things farmers have been saying.”
Both the NFU and the WCWGA say they will try to advance their agendas. The NFU will argue for continuing the rate cap, giving producers more power and keeping the wheat board involved in grain transportation.
The wheat growers will push for a more deregulated system in which all players are made accountable for their performance.
Rick Sallee, of CP Rail, says it will lobby for a system in which “grain can be and should be treated just like any other commodity.”
The day the report was released, the railway held a press conference to lay out its call for a completely commercial system “where market signals are the basis for which people make their decisions.”
