Thursday, 08 March 2018 06:33

Grain producers frustrated as the wait to ship product continues

Written by  Jamie Rieger
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For grain farmers from western Canada to get paid for their product, the grain must first be delivered and the longer it takes for the rail companies to start transporting the grain, the harder it will be for farmers who are in the midst of preparing for the upcoming seeding while still waiting to be paid for last year's grain.

The Canadian Federation of Agriculture (CFA) held a press conference at Parliament Hill  on March 1, to talk about the cash-flow problems being faced by grain farmers because of the backlog with rail shipments and of the inability of the Liberal government to pass Bill C-49, the Transportation Modernization Act, which if passed, would provide the tools needed for the government to assist farmers with cash-flow and would compel rail companies to move grain or face penalties.
"The numbers keep getting worse and worse," said John Barlow, Conservative Minister of Agriculture and Agri-Food, who represents the Macleod riding in southwest Alberta.
"We have the Prime Minister defending the rail industry and they're blaming the weather. In 2013-14, it was CP with the issues. Now it's CN Rail. If it's the weather, then it doesn't make sense that is one and not the other. The rail lines have to be held accountable," he added.
The grain backlog in 2013-14 cost the economy $8 billion. In March, 2014, then Transport Minister, Lisa Raitt and Ag. Minister Gerry Ritz announced that the Harper government would be taking action to get the grain moving. The railways were required to increase the volumes of grain to a combined target 1,000,000 metric tonnes per week or face penalties of up to $100,000 per day.
According to a statement issued by the CFA last week, CN Rail only delivered on 17 percent of the rail cars ordered by grain companies during the week of Feb. 11, 2018.
For local short-line operator, Forty Mile Rail based in Foremost, it has been business as usual with just a small disruption as this is their slow time of the year.
"For us, it hasn't been too bad, only about one to two weeks behind and we can manage it, said Paul Laqua, spokesperson for Forty Mile Rail, which runs between Foremost and Stirling. "The backlog is hurting the wheat and durum more. The buyers know it may not be getting to the coast in time, so the guys aren't selling. We're chugging along here and don't think it will affect us. We aren't high-volume and have more of a niche market."
According to the Alberta Wheat Commission, wheat is grown on 6.8 million acres of land in Alberta and 24 million in Canada. Alberta grows 80 percent of Canada's Canada Prairie Spring Wheat. Canada is the top wheat exporter with 20 million tonnes shipped around the world each year.
The AWC has called for a quick passing of Bill C-49 and solve the issues of rail transportation of grain, including holding rail companies accountable. "Costs associated with railway delays are ultimately passed down the supply chain to me, the producer," said Warren Sekulic, grain farmer and AWC director. "As a price taker, I am dependent on the price the market dictates. I cannot adjust the price of my product so ultimately, these costs reduce my profitability."
Almost 100 percent of Sekulic's grain is destined for the export market.
On Monday March 5, The Board of Directors of CN announced that Luc Jobin was leaving CN effective immediately. On March 7, Jean-Jacques Ruest, who was taking over from Jobin on interim basis, apologized to CN’s “grain customers” and it leased 130 extra locomotives and have sent extra crews.
 "The entire CN team has a sense of urgency and is fully focused on getting it right for farmers and our grain customers, regaining the confidence of Canadian businesses and protecting Canada's reputation as a stable trade partner in world markets,” said Ruest in a prepared statement. "Moving the Canadian economy is in our DNA. We can and we will do much better and that starts today -- no excuses."

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