WINNIPEG – It’s time the railways and other decision makers started asking farmers some serious questions about what they want the grain transportation system to do for them in the future, says Doug Livingstone.
Even more important, it’s time they started listening to the answers.
The Vermilion, Alta., farmer and former president of Alberta Wheat Pool, told a grain industry conference last week that farmers have had little influence over shaping the handling and transportation system that is so crucial to their business.
“Change in the grain industry is being led by the railroads’ desires, followed by the grain companies,” he said. “They have the power to design the system.”
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Farmers are simply asked to react, adjust and live with the results, he said, and that’s no longer good enough.
“Yes, we have to understand where they would like to be and see if we can fit in,” he said. “But they too should ask us where we would like to go and whether we can be part of it together.”
The railways seem to assume that prairie farmers will continue to grow wheat and barley and oilseeds, deliver it to elevators and ship it out by rail, he said. But as grain prices languish and freight costs increase, that assumption may prove false.
“Producers are going to do a lot of things differently in the future,” he said. “What about livestock enterprises, ethanol plants, crushers, maltsters, etcetera, that can and do consume huge amounts of these grains locally and in most cases are served by truck?”
Livingstone fears that little or no flexibility is being built into the system to take account of those “very likely developments.”
He added that he and his neighbors often gets calls from chemical companies, fertilizer dealers and machinery manufacturers asking them about their plans and what kinds of products and services they want, but no one has ever received such a phone call from a railway.
The transportation policy review being conducted by justice Willard Estey provides a golden opportunity to look at the system as a whole and try to design something that takes everyone’s needs into account, including producers and customers, he said.
Following the remarks by Livingstone and other members of a panel discussing transportation policy, several farmers in the audience raised questions illustrating the wide division of opinion on how to fix the grain transportation system.
Art Macklin, an Alberta farmer and chair of the Canadian Wheat Board’s advisory committee, took issue with suggestions that deregulation is the answer, saying his experience with fewer rules in the telephone and airline industry has been poorer service and higher costs.
Criticizing status quo
But Ken Motiuk, another Alberta farmer and a director of United Grain Growers, said farmers are sick and tired of the whole debate. They can’t survive doing things the old way and are increasingly demanding change.
“People have to stop protecting the status quo,” he said. “The world is changing and we mustn’t set up a new system based on a world that has passed.”
Livingstone said those who think deregulation is a panacea are kidding themselves, and all they have to do is look to the United States.
“Deregulation in the U.S. does not seem to have resolved their system problems and I would even suggest there the negative signs of deregulation are all there, with deteriorating service, mergers and so on,” he said. “I do hope we’re not doomed to repeat that scenario.”
Murray Fulton, a University of Saskatchewan economist who is studying the transportation system, told the conference that while some amount of deregulation is inevitable, one way to give producers some influence would be to introduce joint running rights.
Under such a system, the two national railways would be required by law to allow other rail carriers access to their rail lines for an established fee. That would provide competition, help keep a lid on rail freight rates and would give producers and grain companies the opportunity to acquire their own rail cars and run them over existing CN and CP tracks.
“The grain industry could get together and act collectively to use the system to keep the railways honest,” he said. “Clearly CN and CP do not like this idea and it would be a difficult sell.”
But he thinks it’s an idea that the entire grain industry could get behind, as well as shippers of other bulk commodities like coal, potash and sulfur.
