The Canadian Wheat Board has just signed an agreement with CP Rail to improve service – something that’s likely to make a lot of farmers happy.
CP’s bad performance has been a topic steaming up farm meetings this winter, so anything that improves that situation is a good thing. It’s a frustrating year to louse-up sales of Prairie grains, because prices are high and our quality of all crops is low. We need to be able to capture the high prices in the market and clear our junky crops before the prices go away or better crops go on the market. We don’t want a lot of this stuff left over at the end of the summer.
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But something CWB chief operating officer, Ward Weisensel, said to me this morning highlighted the unbearable weight of imperfection that so often hangs above us all in the Western grain industry. I had asked him a number of questions about how much true competition there was amongst the railways for farmers’ grain, and whether voluntary agreements like the one just made could make the system work in a truly more functional, commercially competitive manner, or is a new regime of regulations like those in the recent federal government response to the Rail Freight Review truly required. (I wasn’t surprised by Weisensel’s answer, because it was what the board has long argued, but I thought he summed up nicely the dilemma the entire ag industry is stuck with, something left, right and centre seem to agree upon.)
“We’re not operating in an environment where there’s perfect competition, unrestricted access to capacity. We’re operating in an environment where there is less than perfect competition. We’re operating in an environment where there is capacity constraints in many aspects of the system. And we’re trying to use our position as a large shipper on behalf of farmers to move the grain to customers in a manner that creates as much value to the farmer as possible.”
That’s what makes all these ideological arguments about the grain system that we always have so terribly endless: without a fully functional and competitive market in the critically important, unavoidable and central transportation system, we can’t fully assess fairly the divergent approaches taken by upstream and downstream parts of the industry. The uncompetitive nature of the rail duopoly makes it an always-up-in-the-air question, as does the grain elevator triumvirate and the giant role played by the monopoly-marketing wheat board.
How truly well any of these players are playing (in terms of service to farmers) is always unknowable because of the profound imperfection threaded throughout the system. There’s always someone to blame for why things went wrong but no definitive proof about what actually happened. And no doubt no one thinks they did a bad job, or if they did, there were always extenuating circumstances. (I heard something like that from CP today.)
That is our eternal existential situation.
Well, at least it keeps little ink-stained scribblers like me busy. There’s no end to this story.
