Government wants grain moving
Agriculture: Alberta Ag minister suggests penalties to railways
Wednesday, Feb 26, 2014 06:00 am
Financial assistance may be available to producers affected by delays getting a robust crop to ports in Vancouver, according to Alberta’s Agriculture minister.
“One of the things I have heard from farmers that I have met with is the request for greater flexibility in terms of the federal cash advance payment program,” said Alberta Agriculture Minister Verlyn Olson. “For example, increasing the payment limits from the current level of $400,000, extending the interest free portions and allowing producers to have over-lapping advances, in which they could overlap years.
“I am also talking at my own department to look at what possible assistance we have to offer.”
Producers across western Canada have their bumper crop from the 2013 harvest sitting in bins at their farms or stored in elevators waiting to be shipped by rail out west.
“It is frustrating that elevators and farmyard bins are filled to the rafters — literally — while empty ships are lined up in ports in Vancouver and Prince Rupert waiting for railcars to bring them enough grain waiting for them to fill their cargo holds.”
Olson said the delays tarnish Alberta and western Canada’s reputation.
“Our reputation as a reliable supplier of food around the world is at risk if we can’t meet the needs of our customers in a timely fashion,” he said.
Olson said he feels the railways have to be held accountable when they do not meet their obligations.
“We would support the federal government making some legislative or regulatory changes that would make it possible to level direct monetary penalties on railways when they fail to live up to their obligations,” he said. “When producers and grain companies don’t hold up their end of the bargain they feel it immediately in their pocketbooks with contract penalties and restricted cash flow for producers.”
He said the issue is exacerbated by the fact there are only two railways, CN and CP.
“The vast majority of grain elevators don’t have a choice for which rail company they do business with,” he said. “There is no competitive incentive for railway companies to up their game.”
CN spokesman Mark Hallman said the railway company continues to make getting grain to port a high priority.
“CN’s goal is to lift its performance, as soon as extreme cold temperatures abate, to return to a more normal winter spotting performance of 4,000-plus cars per week,” Hallman said in a prepared statement. “CN last week spotted 3,530 empty grain hopper cars at country elevators for loading in spite of extreme winter conditions.”
He said CN has another 500 hopper cars coming on stream and it is lining up the required crews and locomotives to spot as many as 5,500 cars per week at country elevators once the Port of Thunder Bay reopens, likely in early April.
“CN is doing its level-best to move this 100-year grain crop to export position and world markets,” he said.
CP is also working to get things moving.
“CP is looking at being in a position to respond to its grain shippers more quickly and more efficiently,” said CP spokesman Ed Greenberg. “Despite the challenging weather, our grain volumes from September through January are 17 per cent above the five-year average and eight per cent more than last year. We are confident that with the weather’s cooperation, that we will return to above average grain volumes.”
He stressed CP will continue to work with government and the other parties in the supply chain to ensure maximum efficiency is achieved in the transportation of grain.
Wildrose agriculture critic Ian Donovan agrees with Olson financial assistance may be needed for producers.
“I have asked for banking establishments to be a little bit more lenient for a month or two without penalties,” said Donovan, the MLA for Little Bow. “If your grain doesn’t move, it adversely affects your cash flow.
“I think it is a great idea to help out some of the guys who have the equity, the inventory but don’t have the cash flow.”
Donovan said he would not be opposed to the province providing loans to farmers in need as long as it was done in a responsible manner.
However, he doesn’t know if it is realistic to fine the railways for the delays.
“It would be an interesting concept, but I would caution is that we only have two railway companies,” he said. “The downside is they are private companies and they would just raise their freight rates to cover up the penalty side.
“We need to come up with something that is enforceable among the three parties… CP, CN and the producers that is equitable…the devil is in the details on how you would do this.”
He added the railway also falls under the federal government’s jurisdiction and not the province.