FTLComm - Tisdale - December 16, 2000

car awards program

On Wednesday of this week the Canadian Wheat Board announced in a press release that the Western Grain Handling Association had announced its intentions not to handle Wheat Board grains if the Wheat Board proceeded with its planned "car awards program" scheduled for implimentation on this coming Monday. As a result of this threat the Wheat Board said it was showing its "flexibility" and would delay putting their program in place.



of years

As with all stories there is considerably more to this than it seems. The Wheat Board is responding to the needs of the grain producers and in so doing has been struggling for a couple of years trying to figure out some means to get the grain it sells to port on time. This isn't an easy task and they have been criticised by all for not having come up with a solution. Their solution is the "car awards program" which will allocate grain cars as fairly as possible to make the system work as best as it can.




The Grain companies on the other hand have made some fierce and ruthless decisions. In colusion with the rail companies they shut down their system of rural wooden grain elevators so that they could reduce the work force. By erecting massive inland terminals they believed they would improve their profits by more efficiently handling the grain with larger facilities requiring fewer employees. The rail companies went along with this plan and closed down the lines to the old wooden elevator delivery points forcing the farmers to accept the shift from local to long distance deliver. Of course as part of this shift would go higher costs to the producer who would have to pay for longer hauling using less efficient trucks and this in turn would destroy the road system which the producer has to pay for. All of this to increase the profits of the grain handling companies.




The Wheat Board, with its elected board members now is much more aware of the needs of producers and fair allocation of grain cars just makes sense especially in the light of the glutton of the grain handling companies in their drive for higher profittability. The tensions have been building for some time and small battles have been taking place over what seem like small and insignificant issues.




Last week the grain handling companies intended to end the back and forth billing procedure that takes place between they and the Wheat Board. When grain is shipped to port the cost of the shipping is billed to the grain company who pays the bill and then submitts the bill to the Wheat Board to re-emburses the grain company. On December 10 this process was to end and the bills were to go directly to the Wheat Board. The issue of car allocation continues to simmer and the Wheat Board said it would not undertake this change in billing and the grain companies would be on the hook for paying for the shipping. In essence this was a strong move by the Wheat Board but the "tit for tat" action continues as a few days later the grain companies announces they will not handle Wheat Board grain if the "car award program" goes ahead.




You will recall Ensign did a story Tuesday showing local farmers saving themselves money by not going through the grain elevators to ship their grain. $11.00 a tonne is a huge amount of money, especially when you realise the dire straits the grain companies have put themselves in by closing their profittable wooden elevators, laying of staff, borrowing huge amounts of money to build the concrete and metal terminals. The Saskatchewan Wheat Pool is bankrupt, oweing more money than it has in assets. Farmers are looking for alternatives to the grain companies and their quest to force the farmer to pay more to increase profits while at the same time making the process so much more difficult.




As we on the sidelines look on this battle has not even begun, these are the opening salvos between the grain producers, the Wheat Board and the grain companies. They are playing hard ball here and the Wheat Board has backed down this time but with the mounting pressure from their producers they will have to toughen up and the grain handling companies, some like the Saskatchewan Wheat Pool are facing extinction because of their own stupidity will fight back with everything they can put at their disposal. This issue is far to big to go to courts it will be dealt with in the Canadian way, back room political dickoring to work out something for everyone. The Federal minister of Agriculture will have to become involved but the struggle is directly between the brain dead corporate world of more profit grain handling companies and the politically impotent and somewhat divided rural wheat western farmer who will ultimately have to accept defeat and indeed ultimate extinction.
  Here are some sites to check out that sketch out this story:
  Western Producer story explaining the development of friction of car allocations
  Canadain Wheat Board site, click on news releases and find the actual statement that Wheat Board made specifying the grain companies stricke threat.
  Western Grain Handling Association Aug 29 press release about the need for negotiations between they and the Wheat Board
  By: Timtohy W. Shire