The recent Prairie Farm Commodity Coalition insert in this paper promised tremendous benefits for farmers if the Estey report is implemented. Before jumping on the bandwagon, farmers might want to question the PFCC’s assertions.
Estey proposes port tendering, which will undermine the Canadian Wheat Board’s ability to be an effective marketer. How does this benefit farmers?
Estey would eliminate CAPG and turn car allocation over to the railways, who would determine the car supply and the level of service. In the U.S. Burlington Northern allocates cars and therefore service through a bid car system at up to $600/car over the freight rate. How much would bid cars cost in Canada?
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All parties are to be accountable for their performance under Estey, with those responsible for failures paying the damages.
Would railways and grain companies build in a cushion in tariffs to offset risk? Isn’t the farmer still paying? Although the CWB was the only party to demand and get accountability on behalf of farmers for the 1996-97 backlog, Estey would eliminate that possibility in the future. Who will stand up for farmers then?
Based on a study co-authored by the architect of the BN bid car system, the PFCC suggests handling and transportation deregulation could save $1 per bushel even though grain companies are reporting losses and our regulated freight rates are already $14-25/tonne lower than non-regulated rates for comparable distances. Are they dreaming?
The CWB believes a costing review would find $5 per tonne in efficiency gains that railways have failed to pass on to farmers. This number has not been challenged.
A recent study by Travacon Research concluded that both railways could increase rates and lose grain volumes but still be money ahead. Why would the railways compete? How high would rates go after Estey’s temporary revenue ceiling ended?
Answers to these questions and an alternative transportation vision can be found in the CWB position paper on Estey and the CWB action plan, Linking Farmers to Customers. Check the CWB website or call toll-free.
In the meantime, farmers may want to view the overblown benefits of deregulation with the same suspicion reserved for telemarketers who promise a valuable prize if you just give them your credit card number.
– Bill Nicholson,
CWB Director, District 9,
Shoal Lake, Man.
