Divergent opinions remain, but the passion has faded from the CWB debate.
For most prairie grain farmers, CWB will now be out of sight and out of mind. With the privatization to Bunge and a Saudi Arabian investment company, the organization at the centre of so much debate for so many years is now just another grain company with a relatively small number of delivery points.
There’s now another competitive bidder to consider for producers in reasonable proximity to the country terminals that CWB has bought or building, but most producers will be too far from a CWB facility for it to be a viable delivery option.
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Some of the high value specialty crops travel long distances by truck, but the major grains are typically delivered within an hour of where they’re produced unless there are compelling reasons to truck the crop farther.
The $5 per tonne CWB equity is an incentive, but the difference in bids from one company to another is often more than a $5 a tonne. As well, $5 doesn’t pay for much additional trucking, particularly when it’s a promise of money at some point in the future rather than cash at sale.
Any passion to patronize CWB facilities is unlikely. Those who were fervent supporters of the old monopoly are the ones most likely to believe farmers have been shafted by the privatization. They won’t be eager to deal with a new entity over which farmers have no control.
Producers who are happy about marketing freedom focus on economics first when deciding where to market grain. A privatized CWB will have to earn their business.
More new facilities can be expected because of the Bunge money backing the operation, but it’s doubtful the elevator network will ever surpass even the smaller players such as Paterson Grain and Parrish & Heimbecker
P & H is expanding without nearly the fanfare bestowed on CWB. The Winnipeg-based, family owned grain company bought the iconic Weyburn Inland Terminal and is building a new facility near Biggar, Sask.
CWB does represent a new competitor vying for the business of producers, which is a welcome development. It would be especially useful to have another company develop a west coast port terminal.
However, the industry will clearly remain dominated by Richardson, Viterra and Cargill, which are also spending a considerable amount on capital projects.
Unfortunately, more and better country terminals will do little to address ongoing problems with grain transportation. Country terminals already have the capacity to load far more rail cars every week than they are able to procure, and port terminals spend a significant percentage of time without cars to unload.
With movement constrained by railway capacity, buyers big and small have trouble meeting export sales commitments. Competition is muted and grain prices suffer.
Since they have a captive market, the railways provide the best value to their shareholders by keeping their investment at a minimum. There’s no use investing in surge capacity or having any more locomotives or employees than absolutely necessary. Business will not be lost from sub-standard service.
The future of CWB has been a dominant issue for most of the past decade. Perhaps it’s time for farmers to turn their attention to an overriding issue that can be a unifying cause rather than one that’s divisive: the issue of railway performance.
With the Canada Transportation Act under review, this is a rare opportunity to enact meaningful changes.
