The Farmer Rail Car Coalition has added another organization to its membership list.
The Alberta Soft Wheat Producers Commission, or ASWPC, announced last week it has joined the coalition, which wants to buy the federal government’s fleet of grain hopper cars.
The addition of another member was good news for the coalition, whose proposal to take ownership of the cars for a nominal fee and operate as a not-for-profit leasing company has come under attack in recent weeks from grain companies, the national railways and some farm groups.
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FRCC president Sinclair Harrison said the coalition was happy to have the Alberta commission on board.
“It’s important for the coalition to speak for all producers in Western Canada and the addition of the ASWPC moves us closer to that goal,” he said.
The coalition now has 16 farm organization members and describes itself as the largest single-issue farm group in Canadian history.
Lynn Jacobson, president of the soft wheat commission, said his organization decided that the coalition’s proposal to buy the 12,400 hopper cars represents the best option for farmers.
“After reviewing the FRCC’s business plan, we have decided that no other plan exists that will ensure producers have available a secure supply of hopper cars at no additional cost,” Jacobson said in a News release
news.
He said the commission was also concerned that the federal government might consider selling the cars to the railways or maintaining the status quo, both of which would continue the practice of overcharging farmers for hopper car maintenance.
A study by the Canadian Transportation Agency concluded that under the rail revenue cap, the railways were receiving more than $4,000 per car to cover maintenance costs on the hopper car fleet. The coalition said it has solid estimates from rail car maintenance companies that the work can be done for $1,500 per car.
“Any producer that looks at the facts could only come to the conclusion that the FRCC option is best for farmers,” said Jacobson.
Federal transport minister Jean Lapierre has said he wants to take a recommendation on the fate of the hopper cars to cabinet before Christmas.
At a recent industry meeting in Winnipeg, Transport Canada said it was considering three options:
- Maintain the status quo with the government owning the cars and providing them to railways at no cost.
- Transfer them to the FRCC at a nominal fee or a lease-to-buy arrangement.
- Sell them to the highest bidder through a commercial auction.
Canadian National Railway has said it wants to buy its share of the cars, which is roughly half. Canadian Pacific Railway wants to negotiate a new leasing agreement but says it will bid on the cars if they are offered for sale.
The government first announced its intention to dispose of the cars in 1996 but has never issued a formal sales proposal.
The coalition has been working since that time to promote its plan, arguing that the cars were bought for the benefit of prairie farmers and should therefore be turned over to them for a nominal fee.
It also argues that if the railways are allowed to bid on the cars in any sort of auction process, they will simply recoup whatever they spend on the cars from farmers through higher freight rates.
Grain companies and farm groups say they have numerous concerns over the FRCC plan, including such issues as future freight rates, the apportionment of cars among shippers, the relationship between the FRCC and the railways, system efficiency, trade implications and future producer liability.
To see the coalition’s business plan, go to www.producer.com and type “rail cars” in the go box.
