SASKATOON – A proposal that prairie farmers take ownership of the government’s fleet of rail cars will soon be put before senior grain industry officials.
That’s one alternative being put forward by a committee studying several unresolved grain transportation issues, including the disposition of the government hoppers, car allocation rules and the Canadian Wheat Board’s role in transportation.
Committee member Jim Robbins, a farmer from Delisle, Sask., said while it’s only one of several options that will be included in the Sept. 15 report, he personally likes the idea of the government either selling or giving the cars to farmers.
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“The producers would hold them, presumably through a structure like a co-operative or a non-profit corporation, and they would then continue to have some influence over how the railways handle grain,” he said in an interview after the committee’s Aug. 23-24 meeting in Winnipeg.
He likened it to the privatization process the federal government has used to turn over airports to local private groups.
If the government wanted to maximize its return, it would simply sell its 13,000 cars to the highest bidder with no strings attached. But the other producer representative on the committee, Curtis Sims of MacGregor, Man., said there is general agreement within the group that some conditions should be attached to any sale.
Must assure supply
“There is common ground that they should stay basically in western Canadian grain service in some fashion that assures us that we have a car supply while we go through all this transition,” he said.
There has also been discussion on whether the government should sell, lease or give away the cars. If they are sold, the buyer would almost certainly want to recover the costs by raising freight rates.
Robbins said that’s another argument for selling them to producers.
“We’re going to pay for them no matter whether we buy them or the railways buy them,” he said. “So why don’t we buy them and have some influence over how the railways move grain?”
If the railways buy them, it will be hard not to give them full control over how they are used to pick up and deliver grain, which has implications for the marketing system and the future of the wheat board.
“You can’t have the railways paying a very high price for cars and then have the wheat board telling them where they can put those cars,” said Robbins. And if the board can’t do that, its ability to draw specific types of grain at specific times to meet sales commitments would be compromised.
“There’s no question that the more you deregulate transportation, the greater the implications for the Canadian Wheat Board,” he said.
The committee will put together a package of four or five options, which will be forwarded to a committee of senior executive officers of the grain handling companies, railways and grain industry institutions. It will be up to them to try to reach a consensus to take to government.
Sims said the alternatives range from a “modest, incremental approach,” with an industry-sponsored agency allocating cars and the board continuing to play a key role in placing cars to pick up board grains, all the way to more radical changes that would see the railways allocate cars directly to shippers and the board’s role in putting together train runs scaled back drastically.
While there have been differences of opinion and debate within the committee, Sims said, “I’d like to think we’re trying to keep the political overtones out of it and have taken a more pragmatic approach.”
The committee is scheduled to have two more meetings in Winnipeg before submitting its report on Sept. 15.
