WINNIPEG – Talks aimed at working out details of the new-look grain handling and transportation system are going nowhere fast.
New rules were to have gone into effect Aug. 1.
But the Canadian Wheat Board and prairie grain handling companies can’t agree on how grain should be picked up from country elevators and moved to export position.
While progress has been made on some technical and operational questions, the two sides remain far apart on several fundamental issues on how rail cars will be distributed to grain elevators.
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The board has proposed a system of awarding rail cars based on where farmers choose to deliver grain, saying that will force grain handlers to compete hard for farmers’ business.
“The cars will follow the grain,” said Adrian Measner, the board’s executive vice-president of marketing. “It will certainly put more power into the hands of farmers.”
But the grain companies are opposed, saying it will do nothing to create a low cost, efficient and competitive commercial system.
“It’s crucial that we see a system that pulls grain into the system when it’s needed and keeps the system fluid,” said Gord Cummings, chief executive officer of Agricore. “As best as I can tell, farmers deciding when to deliver to what elevator doesn’t fit that criteria.”
The two sides have also been unable to agree on how to structure the commercial tendering system that will account for 25 percent of the board’s shipping program, although the board plans to issue its first tender by the end of the month.
“We are a long way from being able to find satisfactory resolution to these things in that time frame,” said Curt Vossen, president of James Richardson International Ltd.
“Whether it leads to an impasse that requires intervention beyond that, we will see.”
Relations between the CWB and the grain handling companies have sunk to a new low, say industry sources. Others say the federal government may eventually have to step in to get things back on track.
Under the legislation passed by the federal government earlier this year, and the memorandum of understanding signed between the CWB and the government, the board was given authority to negotiate with the railways for 100 percent of its rail car needs. The grain companies had wanted that power themselves.
Vossen said the board’s attitude seems to be “we won, so we set the rules,” and it doesn’t seem interested in designing a system that enhances rail efficiency and creates a more commercial handling and transportation environment.
But Measner said the grain companies seem to want to re-negotiate issues that were resolved in the legislation and the MOU.
“We aren’t being unfair,” he said. “We’re just implementing what the government has announced.”
He said the board’s overriding concern in designing a new system is what will be in the best interests of farmers.
