Tough times in grain farming could make it tough for Ottawa to change the grain handling and transportation system.
“The timing is probably bad,” said Daryl Kraft, an agricultural economist at the University of Manitoba. “I would think it would be a more difficult sell in caucus than the end of the Crow.”
When the Crow Benefit freight subsidy was eliminated in 1995, the impact on farmers’ wallets was cushioned by relatively buoyant grain prices and transition payments from the federal government.
That’s not the case this time.
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While Ottawa considers policy changes that could result in higher grain handling and shipping costs for some farmers, grain producers are suffering a severe economic crisis.
Owen McAuley, a Manitoba farmer who has served on numerous government-appointed panels, said that’s something federal Liberals are bound to have on their minds as they decide how to respond to the report and recommendations from Arthur Kroeger.
“Anything that increases our costs today ultimately decreases our net farm income,” McAuley said. “When we’re already almost in a negative position in terms of the main growing areas in Western Canada, it will cause huge political problems for the government.”
Kroeger’s report on several months of consultation with grain industry stakeholders was to be released Oct. 5, after The Western
Producer printing deadline.
The report was expected to describe the industry’s deep disagreement on major issues such as a cap on the railways’ revenue from hauling grain, rail competition and the role of the Canadian Wheat Board, and outline the different policy options supported by various players.
Kroeger was also expected to give the minister his recommendations on how to deal with those issues.
Leap of faith
Kraft said if the government opts for reforms that deregulate the system along the lines recommended by Willard Estey, it will in essence be asking farmers to accept on faith that deregulation will lead to more competition and cost savings at the farmgate.
“The problem is it doesn’t appear to be a tangible benefit,” he said. “It’s one that may be realized under a set of conditions, but not one that can be identified concretely.”
He said two key factors will come into play – how much influence transport minister David Collenette has in caucus, and the political input from western cabinet ministers Ralph Goodale and Lloyd Axworthy.
National Farmers Union vice-president Fred Tait said it will be hard for a government to justify “shoveling more costs onto farmers” when they’re in such dire straits already.
But Prairie Farm Commodity Coalition chair Greg Rockafellow said tough times could spur more aggressive reform: “It’s difficult to get change when things are good.”
Regardless of the politics, McAuley expects the government will act on recommendations to deregulate the system.
“I think it’s being driven by Transport Canada and I think it will probably move ahead,” he said.
While it may be good for the industry to get this debate resolved, he said it won’t necessarily be good for individual farmers.
