The federal agriculture minister says grain transportation reform should go beyond improving rail service.
Gerry Ritz is pushing for a more commercial system as set out in the Estey and Krueger reports on rail reform.
“We can’t have the whole system based on a lack of efficiency and paid for unwittingly and unknowingly (by farmers),” he said.
Moving to a more commercial system would include tweaking the revenue cap, which Ritz said is outdated and impedes the development of niche markets for quality agriculture products.
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Ritz is not in charge of the rail transportation file, but vows to influence rookie transport minister Ed Fast on the issue.
He said there must be a better way to move grain from prairie elevators to ocean vessels than today’s “Band- Aid” system.
Richard Phillips, executive director of Grain Growers of Canada, said Ritz is getting ahead of himself.
“If the minister wants to do the best for western farmers and for our entire agriculture sector, we have to get the service review recommendations implemented as soon as possible,” said Phillips.
“We have to get the service review through before we even think about the costing stuff. Otherwise the whole thing will sink into a quagmire, quite frankly.”
Phillips said fixing longstanding rail service problems will put more money in farmers’ pockets than would a costing review. Pulse Canada has produced a report showing poor rail service costs farmers $11 per tonne.
Ritz said the federal government intends to implement several measures recommended by the service review panel, but also must work toward a more commercial grain handling system.
“We have to have a service agreement that benefits the shipper at the end of the day but still allows all the components to make money so you don’t have a weak link in the chain,” Ritz said.
Canadian Federation of Agriculture president Ron Bonnett was pleased to hear Ritz speak about broader rail reform.
“Taking a look at the revenue cap is something that has to be done,” he said.
However, he was not in favour of Ritz’s idea of moving toward a more commercial rail transportation system.
The revenue cap limits how much railways can earn from western grain movement.
