ELIMINATION OF CROW SUBSIDY WILL MORE THAN DOUBLE FREIGHT RATES

Released on March 14, 1995

Premier Roy Romanow said today the elimination of the Crow benefit, as
well as Ottawa's plans to fast-track rail branch-line abandonment, will
create high long-term costs for prairie farmers.

Romanow was addressing delegates to the annual convention of the
Saskatchewan Association of Rural Municipalities in Saskatoon.

"With the elimination of the Crow subsidy, farmers now will have to pay
about double the present freight rate," Romanow said. "The average
producer's freight rate in 1994-95 is $14.72 per tonne. This will more
than double to about $31 per tonne."

Romanow said a second phase of the federal government's changes to
transportation policy next year will revise the way the Canadian Wheat
Board obtains revenue for movements through the St. Lawrence Seaway,
further increasing freight rates for delivery points in most of
Saskatchewan.

"The overall result, barring crop adjustments, will be a loss of $320
million a year in net farm income in Saskatchewan. This represents a
drop in income of about 50 per cent for farm families and any shortfall
in grain prices will compound their losses.

"At the same time federal safety net funding is to be cut by 30 per
cent over the next three years, hurting the grain sector further."

Romanow said Ottawa's changes to the regulatory system mean that about
500 miles of light steel rail lines, and another 3,000 miles of branch
lines, will be abandoned affecting hundreds of Saskatchewan
communities. This fast-tracking of branch-line abandonment means
higher trucking costs and higher road maintenance costs.

"Above all, there is no new national grain transportation policy in
place. There is no guarantee that the proposed changes will result in
efficiencies that benefit farmers and no consultation process for
involving producers in this or future decisions.

"Our task now is to convince the federal government to address these
concerns to ensure the voice of our farming community is heard in the
development of a true national policy for transportation."

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