Title: CN Rail to be fined for failing to move enough grain
Category: Business
Posted By: Hyack
Date: 2014-09-17 17:51:11
Canadian

   

Another brilliant Harper move. Force railways to move grain, then fine them when farmers have no way to get grain to the railroads.

   

Did they have these problems when the Wheat Board was operational, or was the Board able to coordinate it all?

   

I believe the Wheat Board scheduled grain cars for the trains, but truck transport to the graineries and seed cleaning plants was the responsibility of "grain handlers" or the grain elevator owners. The grain handlers bought the grain from farmers and basically owned it once the farmers put it in silos. They were regulated by the Wheat Board legislation, now farmers have to negotiate individually with the grain handlers for pickup and transport of the grain.

I might be wrong, not being a farmer myself, but that's the way I recall it.

   

Did Harper dig up the roads leading to the RR's?

   

Harper changed how the farmers get their grain to the graineries, and passed legislation that forces railroads to ship minimum amounts of grain. Railroads can't ship grain that is isn't in the graineries because farmers can't get anyone to deliver it there. Something the farmers said would happen in 2012 when this legislation was rammed down their throats.

Yet again, "Canada's Government" falls flat on it's face when trying to 'free' a market for 'greater choice'.

http://www.ipolitics.ca/2014/03/05/how- ... in-crisis/

http://www.calgaryherald.com/Time+step+ ... story.html

   

Oh............ok.

   

In your further post below you don't show how this is the government's fault, and more directly the PMs.

This seems like an issue with the private industry that's regulated by the government but operated for profit.

Not an issue with the PM doing something.

What move, as you state the 'brilliant' move, are you talking about?

   

The CWB used to set the price, quota and buy the grain (principally wheat and barley) from the producers then act as the seller. The CWB would pool all grains of varying qualities and pay an equal average price to each farmer in the pool. It was a law that affected only prairie farmers.

To illustrate the unfairness of the system during the Chretien years, a group of prairie farmers deliberately broke the law and were jailed for ceremoniously donating a few sacks of grain to a Montana civic group while Ontario farmers were free to negotiate and sell their grains (and decide how much and what type they would cultivate) to any producer anywhere in the world and donating grain to the same civic group by Eastern farmers went without penalty.

The system was good and bad for many reasons. For small inefficient farmers (160 acres or so) they benefited from the pool. So did Ontario farmers who didn't have to compete with anyone other than the CWB which didn't have a history of negotiating top dollar and in fact, often undersold prairie grain to foreign countries for politic purposes to support the party in power of the day.

Large modern farms (3-5K+ acres) generally suffered most and definitely lost money compared to what they could get by selling it directly. This of course stifled innovation on prairie grain farms. Also, the lack of grain mills and other processing facilities in Canada is generally attributed to the inefficiencies of CWB.

Economics, demographics, technology have all insured the trend is towards large grain farms and no political party would have been able to sustain the monopolistic wheat board through the 21 century.

Now the problem with the rail goes back to last years huge bumper crop that the rail companies couldn't/wouldn't move due to a tough winter and the often neglected fact that the rail companies are putting their corporate effort into moving profitable oil (I bet a tenfold increase in last couple of years) and ignoring (or at least not making enough effort in moving) the less profitable grain.

When grain sits in elevators which are on monopolistic federally mandated rail lines, whether it is under the old mandatory CWB, new voluntary CWB or whether the grain is still owned by the producer; absolutely no farmer gets paid. This makes it a government problem by default. The old CWB had about as much sway with the rail lines as a Leaf's fan has in quality on the ice and prices at the gate. In other words, lots of squawking falling on deaf ears.

Because no payment on last year's crop makes it hard to impossible for the farmer to buy seed and fertiliser for the current year let alone groceries and utilites well; thus last April's ultimatum by the Feds to the railroads to get their poop in a group and put a bit more effort into moving grain. They didn't hit the targets and are paying the price.