Trucking and the shift to large inland terminals is adding enough competition to grain handling on the Prairies to allow for deregulation, argues transportation consultant Graham Parsons.
Regulations traditionally existed to protect farmers from local monopolies of grain and rail companies, said Parsons, an economist and former bureaucrat.
He noted grain companies like Agricore and Saskatchewan Wheat Pool are working outside their traditional handling areas.
“The major grain handling companies have broken out of their cages,” he said in a presentation at a transportation conference here last week.
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More processing on the Prairies and new farmer-owned ventures are also adding competition, said Parsons.
To attract market share, terminals are paying trucking premiums and grading and cleaning benefits, which make it possible for farmers to truck grain further.
He said less than 10 percent of prairie farmers are captive to one or two grain companies within 100 kilometres, and fewer than 15 percent are captive within 60 km.
Most farmers are within reasonable trucking distance of both Canadian railways. If regulations changed to allow Canadian farmers to use rail line in the United States, many would be within trucking distance of other rail lines.
A survey done last year showed 78 percent of prairie farmers believe more competition is their best protection against rising freight rates, Parsons said.
But he added existing regulations limit competition by protecting the old delivery network and inefficient branch lines.
One farmer in the audience pointed out trucks cause damage to municipal roads, which farmers pay for through taxes.
Parsons agreed, saying provincial governments encourage processing and other forms of economic development like forestry and oil, and should increase spending on roads.
“The road issue is much bigger than just grain.”
Alan Clayton from the University of Manitoba said grain trucking accounts for only five to seven percent of all truck traffic on Canadian highways.
But pavement on prairie highways is being battered. “These pavements were never envisioned to handle the axle weight we see today,” he said, pointing to road near Avonlea, in south-central Saskatchewan as a particularly bad example.
“The last time I drove a road like that was in Ghana.”
Over the winter, Clayton and other transportation researchers from the University of Manitoba will start creating detailed maps of municipal roads, livestock operations, grain elevators and rail lines for municipalities.
The study will be paid for by the Union of Manitoba Municipalities, which wants to be able to gauge effects of future truck traffic on roads so it can plan for road repairs.
