With one deadline safely behind it, a coalition of farmers and unionized railway workers is embarking on the next phase in its attempt to set up a co-operative for regional grain collection and transportation.
The Prairie Alliance for the Future had until March 15 to show CN Rail that it was a credible organization with enough grassroots support to make the plan work.
As far as CN is concerned, that has been done.
Railway spokesperson Jim Feeny said the support shown at community meetings, along with the preliminary work the group has done on a business plan, convinced CN to carry on discussions.
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“Everything is progressing pretty much as could be expected,” he said.
Now the two sides will get down to the nitty gritty of working out a commercial agreement.
The deadline for the alliance to submit a detailed operating proposal is May 1.
“We’ve already started work on the business plan,” said alliance co-chair Kyle Korneychuk.
“We’re trying to develop some (grain) volume figures and looking at some issues we need to address in the commercial agreement.”
The alliance, made up of farmers, local community groups and union members of the Brotherhood of Maintenance of Way Employees, wants to take over operations on 1,600 kilometres of CN branch lines in Saskatchewan and Manitoba.
It wants to set up a grassroots, non-profit federation of local co-ops that would operate a regional grain system.
CN would lease the lines to the groups on a long-term basis. The alliance would be responsible for operating trains and maintaining the track.
Most of those lines have also been targeted by Omnitrax Canada Ltd. in its application to the Canadian Transportation Agency for running rights over 2,400 km of CN track.
Feeny said CN will work closely with the alliance as it develops its business plan.
“We’ll sign a confidentiality agreement, then exchange information. That’s standard operating procedure.”
According to a memorandum of understanding signed in January, the commercial agreement will clearly define the role of each of the parties and address the following issues:
- The lines to be leased, rental rates and haulage agreements.
- Performance criteria, including safety, operational requirements and volume commitments.
- Interchange agreements.
- Arrangements for traffic generated by the co-op that doesn’t originate on the co-op’s lines.
Korneychuk said the alliance has hired rail industry consultants to help develop its business plan, and will get input from academics, economists and community representatives at a meeting in Regina on April 6.
He said the group’s plan has been well-received at meetings.
“They start out the same way all farm meetings start now, with everybody gloomy-doomy,” he said. “By the end of it, they’re saying ‘let’s do it because what’s happening now isn’t helping producers.’ “
Farmers are being asked to take out memberships in the co-op.
Korneychuk said they seem more interested in supporting the alliance proposal, rather than the application by Omnitrax for joint running rights, mainly because of the alliance’s structure as a locally controlled, non-profit co-op.
“Farmers say they’ve had too many people making decisions for them and they know what happens with the money, so they’d rather do something themselves.”
