When it comes to farming there has always been a generous amount of hope and finger crossing involved.
Farmers hope frosts in the spring and fall will stay away until crops are grown and harvested.
Throughout the year they hope the rains will come when needed, that it doesn’t get too hot, and that hailstorms stay away.
And, then there are the hopes that grain and oilseed prices will be good, and that the transportation system will operate without glitches so they can access the best markets in a timely fashion.
In recent years the transportation system, or more specifically the rail system, has not worked glitch free. In fact, it has been a choke point at times in terms of getting Prairie grain from the farm to port, and that has caused shipping delays which have hurt farmers in their efforts to realize the best prices.
Farmers have been impacted by rail planning and performance issues since 2013/14, and the poor performance of the railways in the spring of 2018 has again resulted in problems such as higher on-farm inventories, lost sales, and increased demurrage costs.
The recent issues are not the first which have had farmers questioning how the rail companies handle grain.
The situation has been one where the federal government has been looked to in the past to smooth the relationship, or more accurately to create a structured ruleset which in essence force the rail companies to do a better job of handling grain.
That process continued recently with the recent passage of Bill C-49, which amended the Canada Transportation Act.
“The new legislation includes requirements for railways to disclose data and increase transparency on performance metrics, service and rates. It is hoped that these transparency initiatives, along with the potential for reciprocal penalties in railway service agreements, will improve accountability and system performance,” detailed a release from the Saskatchewan Wheat Development Commission (Sask Wheat).
“Bill C-49 also provides for the maintenance of the Maximum Revenue Entitlement (MRE), which ensures railway profitability while protecting farmers from excessive rail freight rates. This was a key demand from farm groups. The new bill also introduces long-haul railway inter-switching to 1,200 km, or half of the Canadian haul, which has some potential to increase competition between railways.”
The situation is one which has had a range of grain commodity and Prairie farm groups lobbying for changes.
Bill C-49 is essentially the federal government’s response to the lobbying effort.
“The passage of Bill C-49 is the culmination of a lot of hard work by producers, farm organizations, shippers and federal government officials,” said Laura Reiter, Sask Wheat Chair in their release. “The provisions that modernize the movement of grain will improve the relationship between farmers and those in the handling and transportation system and will provide the buyers of Canadian grain greater confidence in our ability to deliver the crops they need.”
The Bill may already be having an impact as Canadian National Railway (CN) announced that it would be purchasing 1000 new generation hopper cars to bolster shipping capacity.
“We knew that Bill C-49 was a strong piece of legislation and now we have the proof that it truly will help modernize the shipping industry,” said Grain Growers of Canada (GGC) Vice President Art Enns from Winnipeg in a GGC release. “Grain farmers can take comfort today in knowing that our hard work in pressing for the Bill will pay off through a balanced and robust rail system.”
Clearly there is hope in the farm sector Bill C-49 will have a positive impact on grain transportation, but past efforts have always ultimately come up short, and only time will tell if this effort has gotten it right.
Calvin Daniels is Editor with Yorkton This Week.