Farmers Need Railway Power Imbalance Resolved: CWB

Mar 22, 2011 | Corporate Member News

The CWB welcomed long-awaited results from Transport Canada’s Rail Freight Service Review, but emphasized that solutions will only be effective if they address the power imbalance between the railways and grain shippers, including Prairie farmers.

Allen Oberg

The government’s response is a step in the right direction, but the devil will be in the detail,” said Allen Oberg, chair of the CWB’s farmer-controlled board of directors. “It will be crucial that a new process for dispute resolution between the railways and shippers has the teeth required to compel reasonable rail service – which has been a serious problem in our efforts to move farmers’ grain to port.”

The CWB welcomes the government’s announcement that it intends to legislate shippers’ right to service agreements and its recognition of the importance of dispute resolution. The review panel’s recommendations fall short of the CWB’s proposal for a Rail Service Office with the power to make binding decisions on disputes. However, the government has committed to developing a fair, timely and cost-effective commercial dispute-resolution mechanism.

“It will be very important that this mechanism is carefully constructed to ensure it can deliver the outcomes we need,” Oberg said. “Effective regulatory or legislative recourse is crucial if shippers hope to have any leverage in rail disputes.”

The CWB is also pleased to see a much tighter timeline adopted for pursuing improvements than was originally outlined in the panel’s interim report last fall. Instead of reassessing railway performance in 2013 under a “wait-and-see” approach, the report now suggests action occur within the next six months.

“This review has already been going on for more than two years,” Oberg said. “What farmers need now is action. We urge the government to follow through as quickly as possible.”

Prairie farmers move their grain longer distances to port than any other producers in the world. More than 80 per cent of western Canadian wheat is exported overseas, making rail freight service a crucial part of Canada’s competitive strength in the global grain trade. Geographic realities leave most farmers captive to a single railway in transporting their grain. This means that commercial competitive factors have little bearing on railway performance in the grain sector.

The CWB has been encouraged by positive discussions with both major railways and looks forward to building service-level agreements that will achieve a more effective supply chain for all stakeholders in the grain sector.

Controlled by western Canadian farmers, the CWB is the largest wheat and barley marketer in the world. As one of Canada’s biggest exporters, the Winnipeg-based organization sells grain to over 70 countries and returns all sales revenue, less marketing costs, to farmers.

For more information, please contact:

Maureen Fitzhenry
CWB media relations manager
Tel: (204) 983-3101
Cell: (204) 227-6927
[email protected]

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