GRAIN SYSTEM CHAOS TOTALLY PREDICTABLE Its a costly, frustrating mess! Thats how farmers are describing the worsening situation in grain handling and transportation this winter. The complaints started early in the fall while producers were harvesting a record crop and available prices were still high. Concern has steadily escalated. Its become painfully obvious that the existing system is incapable of delivering that crop to market in a timely manner. The spotting of rail cars is weeks, even months, behind. West coast terminals are under-supplied. Some 40 ships are waiting in English Bay. Millions of dollars in demurrage charges are being incurred. Grain prices have dropped by 40%. On-farm operating debts are going unpaid. That price penalty and extra costs -- which farmers ultimately get stuck with -- flow from the inability of railways and grain companies to handle and transport an excellent crop. They cant seem to cope with anything beyond what they moved last year, and that is far below whats required. Moreover, the Harper government is unable or unwilling to do anything about it. Indeed, Agriculture Minister Ritz defends railway and grain company performance as adequate which it clearly is not. With producer patience wearing thin, the beleaguered Minister pulled industry players into a meeting yesterday -- at long last -- to talk about the situation, and start a study of whats gone wrong. Such a mess was entirely predictable. Long before he launched his crusade to demolish the previously existing grain marketing and regulatory system, we asked Mr. Ritz for a coherent analysis of all the costs and benefits of the changes we was pushing. Quite apart from the merits/demerits of those changes, we also asked for a comprehensive business plan to manage implementation and transition. There was no cost-benefit analysis, no business plan, no consultation. There was and is no credible system to monitor and measure the consequences of his changes and report publicly. There is no transparency around price discovery, basis deductions or transportation logistics. In a deliberate free-for-all, coordination is largely absent. And there is certainly no advocate for the rights and interests of producers with the size and clout to take the railways and/or grain companies to court, if necessary, and win. The Minister promised new legislation to rectify the imbalance in market power between farmers and railways -- to enable shippers to get a decent level of transportation service. But his new law is a joke. Its definition of service is meaningless and shippers have no access to direct remedies from the railways. So shippers remain captive, with no competitive alternatives and no legal recourse. The Harper governments intent here is becoming obvious. They are waiting for anger among producers to build to the point that farmers themselves turn against the Revenue Cap that exists within the law to provide some small measure of protection against arbitrary, discriminatory and exorbitant freight charges. Watch for it. That will be the Conservatives next move. They will blame the current transportation nightmare on the Revenue Cap, and use that as an excuse to do nothing.
Posted on: Wed, 22 Jan 2014 19:36:00 +0000
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