Farmers who want changes to grain shrinkage allowances will have to be patient.
Nothing is going to happen for at least 14 months.
The Canadian Grain Commission is reviewing the rules that provide for an automatic weight reduction on grain delivered to country elevators across the Prairies.
When the review was initiated last fall, officials said changes could be implemented for the crop year that begins Aug. 1, 2001.
But commission spokesperson Paul Graham said that’s no longer possible.
“We decided there’s not enough time to do it for August 2001.
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The commission recently released a discussion paper on the subject and asked farmers and others in the grain industry to submit comments by
Oct. 31.
Shrinkage allowances, which have been around in one form or another since 1912, are designed to compensate elevator operators for the loss in weight that occurs in grain during handling and transportation.
Dust and grain can be left in equipment or bins, or can leak from rail cars. Weight can also be lost when moisture evaporates as grain dries.
Grain handlers traditionally charge the maximum allowable levels, which are currently set at 0.1 percent for wheat, oats, barley and rye, 0.35 percent for flax and canola, and one percent for other grains such as pulse crops (all for straight grades).
The review was prompted by continuing questions from producers about the need for a shrinkage allowance, particularly in light of new grain handling technologies.
The commission has put forward three options:
- Continue with the status quo, with the commission setting a maximum allowable shrinkage. That way, the deductions are visible to producers and not hidden in handling tariffs.
- Deregulate and allow primary elevator operators to establish their own shrinkage deductions and use them as a competitive tool. Shrinkage could vary between companies and from elevator to elevator. The onus would be on farmers to be informed about shrinkage deductions and do business accordingly.
- Set all shrinkage allowances, including for tough and damp grain, at zero. Companies couldn’t recover shrinkage costs directly. However they could incorporate shrinkage in their handling tariffs.
“We think we’ve given three clear options and we’d be interested in knowing what people think of them,” said Graham.
“We haven’t received enough comment so far to say ‘this is what producers think’ or ‘this is what industry thinks.’ “
However, comments sent by farmers to the commission’s internet website at www.cgc.ca are overwhelmingly critical of existing shrinkage rules.
They say there’s no legitimate reason farmers should have to pay for grain that’s lost after they’ve delivered it to an elevator. And they say the maximum shrinkage levels allowed by the commission are too high, especially for special crops.
One farmer described shrinkage as “a licence to steal” for primary elevator operators.
Another said farmers shouldn’t be held responsible for the carelessness of elevator managers and shrinkage should be set at zero.
“If I ship a producer car, I am not compensated for loss of product due to sloppiness,” said the message posted by a farmer identified only as Ted. “The grain companies are making enough money without being compensated for being careless.”
An official with the Western Grain Elevators Association said elevator operators are pleased the discussion paper acknowledges that shrinkage does occur.
“We just have to make sure that whatever happens, it doesn’t become a hidden kind of cost,” said association spokesperson Ed Guest. “There is shrinkage, producers know there is shrinkage and it’s listed as something that they can look at and know about. To put it in tariffs is hiding the fact that something happens.”
He said the companies could accept either deregulation or the status quo, but would object to a zero shrinkage allowance.
