OTTAWA – A coalition of smaller players in the grain industry last week accused the big players and the Grain Transportation Agency of colluding to get an unfair advantage in the fall and winter grain shipping season.
Western Canadian Wheat Growers Association president Hubert Esquirol suggested there was a plan afoot to create a large grain shippers’ “cartel” that would hurt farmers.
The claim that the big guys were colluding with the GTA to carve up the market was dismissed by one of the major players as a pitch for industry deregulation.
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“The idea of a cartel is ludicrous,” said Saskatchewan Wheat Pool transportation manager Keith Bruch. “This is perceived by these groups as an opportunity to push for radical change of the whole system. That is their agenda. They say they represent the farmer. Their position would hurt the farmer.”
At the centre of the storm was a proposal from the GTA, that if grain rail cars must be rationed this fall and winter, it should be done on the basis of historic share.
Grain companies get majority of cars
It would give the major grain companies 87 percent of the close to 30,000 grain cars available during the heavy schedule booked for the rest of the year.
Smaller shippers would share eight percent of the cars among them, based on last year’s performance. New shippers will have access to five percent of the cars.
GTA official Bruce McFadden said the proposal has yet to be approved and would be implemented only if a shortage of cars develops. It would end next year when further changes are made in grain movement rules.
The GTA will meet this week with shippers for one last attempt to find agreement.
For the wheat growers, the Canadian Canola Growers Association and the Western Producer Car Group, it will give the big players an unfair advantage. It amounts to “fixing market share”, they said.
Alanna Koch, executive director of the wheat growers, said eight percent of cars for small shippers is unfair because during the first months of the shipping year, they normally average 20 percent. “This will give the large shippers a lock on more cars than they really should have.”
Bruch said the proposed allocation is an attempt to avoid the chaos, the demurrage charges and the lost sales of last year.
But Koch conceded one point raised by Bruch.
“It is a fair comment that longer-term issues of reform are involved here,” she said.
