SASKATOON – Thought you’d heard everything there was to hear about the method of payment of the Crow Benefit?
Think again.
The most recent addition to the towering stacks of reports, studies and analyses of the freight subsidy debate (more than 100 in the last 10 years alone) was finally made public last week.
On April 7, Ed Tyrchniewicz released the technical report of his producer payment panel, four months and seven days after its original Nov. 30 deadline.
And he promised that in early May a final report will be in the hands of agriculture minister Ralph Goodale, including specific recommendations about what to do with the annual Crow subsidy.
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The 187-page technical report, entitled Implications of Changing the Western Grain Transportation Act, covers everything from the history of the WGTA, farm safety nets and grain production trends to branch line abandonment, GATT and freight rate pooling.
Issues of debate
Information and conclusions in the report are bound to be used by both sides in the ongoing debate over what to do with the annual transportation subsidy. For example:
- Pay-the-producer would result in an eight percent reduction in seeded acreage and grain production in Western Canada by 1999, as marginal land is taken out of production. The biggest drop would be in Manitoba.
- Higher freight rates under a pay-the-producer scheme would mean a 20 percent drop in overseas exports and an 18 percent increase in shipments to the U.S.
- Simply changing method of payment would have little effect on net grain income. But if the eastern freight pooling point was changed to St. Lawrence as well, net income would increase by about three percent (by 1999).
- Paying the producer would not result in any significant increase in livestock production or improved margins for hog or cattle producers.
- Changing the method of payment would provide only “modest” savings in grain transportation costs, apart from savings from branch line abandonment and reduced cross-hauling of grain.
- A producer payment would be good for the environment, by taking marginal land out of production and reducing erosion and loss of organic matter.
- There is no way a pay-the-railway scheme can be made to conform with the new GATT rules. A pay-the-producer system would likely be acceptable.
- No definite conclusions can be drawn about the impact of method of payment on land values or road maintenance costs.
The panel asked for reaction to the ideas of using some of the WGTA subsidy to pay for agricultural research and market development, perhaps on a matching basis.
About 400 copies of the report have been distributed to farm organizations, grain industry and government officials for comment.
Tyrchniewicz said he hopes the technical report will help create a consensus on some of the basic facts surrounding the method of payment issue.
“I realize there will be controversy,” he said. “But I hope we can get (the industry’s) reaction to the analysis and factual information so we can get that out of the way before we debate the recommendations.”
