CALGARY, AB: The Western Canadian Wheat Growers Association strongly endorses the decisive action taken today by the federal government to address the severe grain shipping backlog in western Canada.
The federal government has issued an emergency order instructing the railways to ramp up grain shipments to clear up the backlog, which has climbed to over 60,000 rail car orders, representing more than five million tonnes of grain.
“This action was necessary to stem the financial losses to prairie farmers and the western farm economy,” says Levi Wood, President of the Wheat Growers. “We thank Ministers Raitt and Ritz for the action taken today and look forward to even further measures to substantially improve competition, capacity and service in the rail sector.”
The Order in Council to immediately increase grain shipments will help lift artificially depressed grain prices, generate more cashflow for farmers ahead of spring seeding, and reduce the carryout of grain that will be left on farms at the end of this crop year.
Grain railcar shipments this crop year are down 6% from the same period last year, despite a record prairie crop that was 37% above the five-year average.
The Wheat Growers estimate the failure of CP and CN to provide adequate shipping capacity has caused financial losses to prairie farmers of at least $2 billion due to the resulting grain price discounts to farmers. This is lost income that will never be recovered. It is also income that will not be spent in rural areas across western Canada.
The performance failure of the railways has also resulted in lost export sales, plant shutdowns within Canada and undermined our nation’s reputation as a reliable supplier of grain. Offshore customers have diverted ships and sourced grain supplies from other countries due to the poor shipping performance of the railways.
The Wheat Growers are pleased the government intends to introduce further measures to improve our grain transportation system when Parliament resumes sitting on March 24. The Wheat Growers have recommended several measures to improve competition and add rail capacity including a strengthened Canada Transportation Act, expanding interswitching distances and modifying the grain revenue entitlement formula.
“Today’s order is a welcome stopgap measure to stem the financial losses,” says Wood. “We look forward to the introduction of further measures to help create a world-class transportation system that fully meets the needs of farmers and our customers.”
About the Wheat Growers:
Founded in 1970, the Western Canadian Wheat Growers Association is a voluntary farmer-run advocacy organization dedicated to developing public policy solutions that strengthen the profitability and sustainability of farming, and the agricultural industry as a whole. For more information, please visit wheatgrowers.ca.