With harvest ’14 underway across the Prairies, all eyes are focused on getting that grain to market.
Last winter’s transportation backlog (caused by frigid temperatures, a record crop and major miscommunications across the supply chain) is still fresh in farmers’ and politicians’ minds.
The crisis was a wake-up call no one could ignore.
Farmers and shippers know that Canada’s reputation as a reliable supplier is on the line. Last winter’s chaos means international and domestic customers’ patience may be short.
A repeat of last year’s crisis is the last scenario anyone wants or needs.
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Worrisome drop in grain prices
Prices had been softening for most of the previous month, but heading into the Labour Day long weekend, the price drops were startling.
Expectations are that this year’s crop will be smaller than last year’s because of a soggy spring and a colder fall. The latest numbers from Statistics Canada, released earlier this month show lower than expected on-farm grain stocks too.
Last winter’s backlog might be easing, albeit it slightly.
Still, that’s not to say everyone should, or can, relax. There’s still work to be done and lots of it.
Many within the agriculture community are determined to reach a long-lasting solution to grain movement issues. Most eyes are focused on Agriculture Canada and the department’s minister, Gerry Ritz, to lead the charge.
That’s easier said than done.
While on the surface the issue of grain transportation may seem agriculture focused, it is as much a transportation problem as it is an issue caused by a lack of communication in the supply chain.
There’s a reason both national railways each remain under federal orders to move a minimum 536,250 tonnes of grain each per week or risk government fines of up to $100,000 per day.
This despite sharp words and anger from the railways, which insist that industry and government are using them as scapegoats for a wider, more complex problem.
And, while Ritz appears to have established himself within cabinet and caucus circles as the agriculture guy (he is one of the prime minister’s longest serving ministers to remain in the same portfolio), the railways know he’s powerless without the support of transport minister Lisa Raitt.
At the end of the day, it’s the transportation minister, not the agriculture minister who can tell the railways what to do. This chain of command, in part, is why last winter’s crisis escalated.
To be fair to Raitt, she has been engaged in the grain transportation file for months, holding meetings with railway executives and urging Transport Canada to pay close attention.
She even expedited the rail service review, now expected to be complete sometime before the end of 2015. That report is expected to include longer-term suggestions and im-provements for the transportation end of the supply chain.
Those longer-term solutions will likely be welcomed by industry. Still, it is critical for Transport Canada to remain engaged in the short-term.
There’s word that industry and government officials have started discussions about grain logistics. It offers hope that those talks will bear fruitful results for all stakeholders.
Agriculture Canada is steering the talks and has been researching and monitoring the grain supply chain for months.
It is safe to say, though, that Transport Canada will require a seat at the table too.
Parliament is set to return from its summer break soon, where political eyes, likely those belonging to Ottawa aggies and Opposition agriculture critics, will be watching this year’s harvest closely to see if more government action is needed.
They’ll also be watching to see if Bill C-30, the Fair Rail for Grain Farmer’s Act, for which regulations were re-leased Aug. 1, actually works in getting Canadian grain to market.
On that, only time will tell.
