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Western farmers wait for changes to grain rail transportation

A Canadian Pacific Rail train hauling grain passes through Calgary, Thursday, May 1, 2014. The second largest crop on record is expected this year and farmers are worried about a repeat of a rail bottleneck that occurred in 2013-2014.
A Canadian Pacific Rail train hauling grain passes through Calgary, Thursday, May 1, 2014. The second largest crop on record is expected this year and farmers are worried about a repeat of a rail bottleneck that occurred in 2013-2014. Jeff McIntosh / The Canadian Press

Farm groups said they think federal Transport Minister Marc Garneau heard their concerns about moving grain by rail and they’ll wait to see if changes are on track.

Garneau and federal Agriculture Minister Lawrence MacAulay held a meeting Thursday in Saskatoon with more than a dozen farm groups as part of the development of a long-term plan for transportation in Canada.

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Jim Wickett, chairman of the Western Canadian Wheat Growers Association, said they told Garneau about the need for competition in the rail industry and accountability.

“It was pointed out by lots of groups that the only person in the entire value chain that is not accountable is the rail. And if they’re late, they still charge the exact same rate as if they were early,” Wickett said.

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That hurts farmers who might be waiting to haul their grain and need the income to make a payment on land or equipment, he said.

Farmers also want interswitching — the transfer of traffic between two railway companies — kept at a distance of at least 160 kilometres. Wickett said that would allow producers to access more rail lines.

Ron Bonnett, president of the Canadian Federation of Agriculture, said farmers want several things, including service standards.

“There’s the whole aspect of service standards to make sure that the railways respond to the needs of the farming community and that the crops that are produced get delivered to the market on time,” he said.

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The grain delivery system has to operate flawlessly because customers are only going to buy from people and countries “that can deliver quality product on time,” Bonnett added.

The second-largest crop on record is expected this year and farmers are worried about a repeat of a rail bottleneck that occurred with a bumper crop in 2013-2014. Western Canadian farmers harvested a record 76 million tonnes of grain that season — 50 per cent higher than average, but much was left sitting in bins for months.

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Saskatchewan Agriculture Minister Lyle Stewart said he thinks Garneau understands the magnitude of the problem.

“I personally talked about the fact that up to 90 per cent of our ag produce is exported and it was $15.3 billion last year and we are land-locked, totally. There’s only one way to get it out of here, and that’s by rail,” said Stewart.

Garneau said in a news release that Ottawa understands that a strong rail-based supply chain system is essential so Canadian producers and shippers can remain competitive.

Canadian Pacific Railway (TSX:CP) and Canadian National Railway (TSX:CNR) were accused of making oil and other products a higher priority than grain in 2013-2014. But the rail companies said that wasn’t fair because frigid weather forced them to use shorter cars to ensure brakes could be used safely, which cut down on capacity.

This year, CN has launched a new online site for information on its weekly western Canadian grain movements. Two large headlines pop up when the page opens: “Pulling together for the big harvest” and “Keeping grain moving.”

Canadian Pacific Railway (TSX:CP) has said it’s ready to move what’s expected to be close to a record crop, but that the grain isn’t ready because wet weather is contributing to a late harvest.

Railway president Keith Creel said Wednesday that CP has increased its grain train lengths about 11 per cent in the past quarter and aims to add another 10 cars to reach 134 cars to boost efficiency.

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By Jennifer Graham in Regina

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