CALGARY – Those who think deregulation is the answer to Canada’s grain transportation woes should think again, Canadian Wheat Board chief commissioner Lorne Hehn told a roomful of deregulation advocates last week.
The former United Grain Growers president went to the 1997 UGG annual meeting to take on the railways and the advocates of commercializing the grain movement system.
“There have been glitches and lapses in performance in recent years and I believe our industry needs to think long and hard before it jumps on the deregulation bandwagon,” Hehn told UGG delegates Nov. 6. “We want to move to a better system, not just a different system.”
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UGG leaders and transportation experts have been promoting the cause of grain hauling deregulation, moving from central control of car allocation to a commercial contract system.
Last week, UGG delegates were less single-minded.
They approved a resolution calling for more accountability by the railways and a system of incentives and penalties to encourage the railways to do better.
But they also defied expectations by defeating a resolution which opposed the Canadian Wheat Board’s case against the railways before the Canadian Transportation Agency.
“I see the railways not as a business partner,” said delegate Jim Martin of Laporte, Sask. “I see them as the enemy in this situation.”
Mark Reimer of St. Anne, Man. called for UGG to pressure the government and railways to make the railways more accountable for their performance. “We are frustrated.”
Even UGG president Ted Allen got into the act, complaining that when the Canadian Transportation Act was approved by the last Parliament, it gave the railways too much power and the farmers too little.
Yet the UGG convention also heard from speakers who argued that getting government and central planning out of transportation and all things agricultural is the way to go.
Herb Karst, a North Dakota farmer and president of the U.S, National Barley Growers Association, argued that free trade and market power are the keys to prosperity. Government intervention, politics or concern for the social costs of market forces are merely impediments to a commercial system that rewards the strong and efficient and discards the weak.
He was praised for his message by some UGG delegates.
Hehn waded into that atmosphere with a caution that UGG and anti-regulation campaigners should consider the U.S. experience with deregulation and railway power before making the leap of faith.
In the northern U.S. where there is little competition, freight costs are much higher than in Canada, he said. “I suggest we take a close look at the U.S. experience before we jump headlong into American-style rail deregulation.”
Hehn defended the wheat board legal case against the railways for their winter 1996-97 performance.
He said no one blames the railways for the weather, but their recovery time was too long.
And car unloads at port are much lower now than they were five years ago.
“Despite improved load and unload capability and fewer stations to service, we are experiencing a very big decrease in throughput capacity,” he said. “This is of great concern to me.”
However, Hehn later said wheat board relations with the railways are good and they have been performing well since spring.
Exports levels and rail performance are acceptable so far this crop year, he said.
