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September 3, 2015

Where are the farm issues this election? Let's start with grain transportation
By Dan Mazier

Every day I tune into the election news, hoping for some mention of agriculture, the issues we in the industry are facing, and proposed solutions. And every day I’m disappointed.

But I remain optimistic because surely the parties and the candidates will realize at some point that agriculture is a major economic driver, creating one in eight jobs and contributing over $100 billion to the Canadian economy – and it cannot be ignored.

If they’re short on ideas about how to engage the farm vote, how about starting with Canada’s grain transportation system? It’s been broken for such a very long time now, and efforts over the past 30 years to fix it have yielded little for farmers.

Deregulation was supposed to have resulted in better, more innovative rail transportation services, but in reality it’s meant branch line abandonment, a drastic decrease in the number of delivery points, and increased costs for hauling grain to these points.

On the other hand, deregulation has allowed the railways to reduce expenses, reduce services and increase profits.

The issue has been and still is a lack of competition, and that means the railways have cart blanche to do whatever they want. This was apparent in the fall of 2013, where at one point, only 27 per cent of cars were delivered to elevators on time – and that was to haul a record-breaking bumper crop.

Farmers lost billions that year because of backlogs at the local elevators that caused basis points to skyrocket. And the sad part is, not much in the way of rail service has changed. Last year, according to the Ag Transport Coalition, a group working for improved rail service, CN delivered on average 62 per cent of cars on time, while CP averaged 36 per cent.

It’s ridiculous to think about anyone running a business in this manner – until you remember that the railways have a monopoly. Farm groups have been decrying this monopoly for years, and the federal government finally took action last year.

First, the government ordered the railways to each move 500,000 tonnes of grain per week, or face $100,000 fines. This was followed by a review of the Canada Transportation Act (CTA) that is still ongoing, with a final report due in December.

I cannot stress enough the importance of this review. It is paramount to improving grain shipping – the best hope we’ve had in a long time.

I sat on the Crop Logistics Working Group with other key stakeholders from across the country – including producers, shippers and processors – to develop a submission for the review. It’s a testament to the gravity of the situation that so many organizations came together at the same table, some which have traditionally been at odds with each other, in the hopes of fixing the system.

In addition, many of these groups – including Keystone Agricultural Producers – made individual submissions, and it appears that essentially most agree what the elements of the fix must be.

They include creating railway accountability and transparency relating to service, giving the Canadian Transportation Agency increased power to monitor railway service and enforce service agreements, improving shippers’ rights in service agreements, and improving small shippers’ access to rail service.

I also sat on the sub-committee of the Crops Logistics Working Group that looked into the maximum revenue entitlement mechanism that prevents the railways from overcharging farmers to move their grain. The railways would like, obviously, to get rid of this mechanism, but our group found that it really does work the way it’s supposed to.

The first positive steps have been taken with the CTA review, and now we need buy-in and a commitment from each political party that if elected, that party will not allow the review recommendations to sit on the shelf. This is an opportunity to finally repair our broken grain transportation system, and move it forward.

If they still don’t think it’s important, I point to the fact that new and expanded trade agreements require moving more and more farm goods and other Canadian products to export markets. What’s the good of a trade agreement if we can’t get our products to market? In essence, we’re putting the cart before the horse.

Ever the eternal optimist, I will continue to scan the news in the hope that some politician or candidate out there thinks farm issues are important – starting with a promise to act upon the recommendations of the Canada Transportation Act review. If not, the door remains open for more heavy losses for farmers.

Dan Mazier is president of Keystone Agriculture Producers. He produces grains and oilseeds near Justice, Manitoba.