Released on October 5, 1999
Recommendations from federal facilitator Arthur Kroeger to shape the future ofthe grain handling and transportation system in Canada, are unacceptable
because they do not put farmers first.
Kroeger's recommendations came after five months of effort by all stakeholders
in the system and were forwarded to the federal Minister of Transport David
Collenette without being shared with participants.
"We have always said any changes to the grain handling and transportation
system must benefit farmers first, and Mr. Kroeger's recommendations fail to do
that on three major issues," Premier Roy Romanow said. "There is inadequate
freight rate protection for farmers, there is failure to recommend open access
and the Canadian Wheat Board (CWB) is not being given the freedom to
effectively market wheat and barley on behalf of all farmers."
Kroeger's recommendations will see farmers continuing to pay excessive freight
rates.
"The safeguard for freight rates offers no useful protection for Saskatchewan
farmers. If such recommendations are adopted then Saskatchewan farmers could
be paying hundreds of millions of dollars in excess freight rates," Romanow
said.
"Just last week three western farm groups recommended an alternative, supported
by Saskatchewan, which would have provided reasonable protection for farmers,
as well as adequate revenue for railways. Mr. Kroeger chose to ignore us,"
Sinclair Harrison, President of Saskatchewan Association of Rural
Municipalities (SARM) said.
Kroeger recommended a further study be done before a decision is made on open
access.
"Enough research has been done on open access that it could be a viable option
to increase rail competition. Let's try it," Romanow said.
"Open access was widely supported by producer groups during the Kroeger
Process, a further study is not acceptable," Harrison said.
Kroeger also recommended a significant change in the role of the Canadian Wheat
Board in removing them from transportation and making them only an offshore
marketer.
"If that solution were adopted then farmers would get less money for their
grain," Harrison said. "It could limit farmers' delivery opportunities and
hurt their cash flow."
Premier Romanow recognized that a great deal of effort had gone into the
"Kroeger Process" from farmers, farm organizations, grain companies, railways
and others with a stake in an efficient, effective grain handling and
transportation system.
"Saskatchewan farmers and farm families are facing a crisis. Mr. Kroeger's
recommendations do nothing to help. He had a choice to help farmers or the
grain industry and he picked the railways and grain companies over farmers,"
Premier Romanow said.
"It is time the federal government put farmers first and I am writing to the
Prime Minister demanding that they do just that. I will also be pressing them
to take an urgent first step by reducing freight rates by $5/tonne
immediately."
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For more information, contact:
Bernie Churko
Saskatchewan Highways and Transportation
Regina
Phone: (306) 787-4866
Sinclair Harrison
President, Saskatchewan Association of Rural Municipalities
Regina
Phone: (306) 757-3577
Backgrounder
In the winter of 1996/97 backlogs on prairie railways cost Saskatchewan
farmers more than $65 million. Saskatchewan led the call for reform to the
grain handling and transportation system.
Saskatchewan and the other provinces said any reforms had to benefit
farmers first – that means benefits must return to farmers before the grain
companies and before the railways.
The Estey Review examined all aspects of grain handling and
transportation and came up with 15 recommendations.
Federal facilitator Arthur Kroeger was given the mandate to develop a
consensus position amongst farmers, grain companies, the Canadian Wheat Board
and railways based on the Estey Recommendations.
In the Kroeger process consensus was reached in several areas. The
province of Saskatchewan recommends that the federal government move ahead with
legislation where consensus was achieved.
Arthur Kroeger made recommendations on four major issues in which
consensus was not achieved.
Those issues are:
Role of the Canadian Wheat Board in transportation
Regulation of freight rates
Open access to rail infrastructure
Final Offer Arbitration
The first three of those issues are so important Saskatchewan cannot
accept the Kroeger Recommendations.
Saskatchewan does not support the Kroeger Recommendation on railway
freight rates. (The Kroeger Recommendation would see farmers continuing to pay
excessive freight rates and would cost farmers millions annually.)
On the CWB, Saskatchewan says the Board must have the flexibility and
autonomy to use all tools to maximize returns to farms and market grain. (The
Kroeger Recommendations would inhibit the CWB and penalize farmers as a result.)
Saskatchewan is writing to the Prime Minister asking, that as a first
step, freight rates be lowered by $5 per tonne retroactive to August 1, 1999.
This would put $100 million in the pockets of farmers.
Saskatchewan supports open access as a means of creating more
competition in the rail sector. The Kroeger Recommendation says more study is
needed before a decision is made on open access. Saskatchewan believes that
enough research has been done on open access to show that it could be a viable
option to increase rail competition.
Saskatchewan generally supports the recommendation on Final Offer
Arbitration.