If the railways’ revenues are cut too much, they’ll take it out on farmers, says an official with the Prairie Farm Commodity Coalition.
“I know what happens when you take a whack at the railways,” said Paul Orsak. “You take a whack at the railways and they turn around and whack back at farmers. It isn’t nice.”
Orsak, a farmer from Binscarth, Man., was one of the coalition’s representatives in transportation reform discussions led by Arthur Kroeger this past summer
He was in Ottawa last week as part of a PFCC delegation urging the federal government to move quickly to implement changes based on Kroeger’s report and recommendations.
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One message they delivered to government officials was that while a significant cut in railway revenues might appear to be a good way to provide immediate economic relief to cash-strapped grain farmers, it would be counterproductive in the long term.
Kroeger recommended a revenue cap be set 12 percent below the railways’ 1998 revenue levels. Some say that’s too generous to the railways and the cap should be set 18 percent or more below current levels.
Interviewed after his return from Ottawa, Orsak said if rail revenues are cut too drastically, those farmers who patronize smaller elevators on local branch lines stand to lose the most.
“If the railways feel they’re faced with a revenue crunch … they will turn to the cost side of the ledger,” he said.
“They’ll begin to service the high cost element of the network less and less and less.
“As long as the revenue cap is set at a level where the railways have flexibility in the service packages and prices they can offer, they will offer those packages out at various prices and farmers can respond to them.
“If you simply chop the revenue cap, then those service providers will only offer you one thing, and that’s what we worry about,” said Orsak.
