Farmers deserve to get back almost $60 million in railway revenue earned above the Western Grain Revenue Cap for the 2007-08 crop year, the CWB’s president and CEO said recently.
“Farmers were overcharged for the rail freight of their grain by $2.23 per tonne. For many farms, this amounts to thousands of dollars,” Ian White said. “We are asking that the federal government find a way to channel the money back to producers who paid it.”
The Canadian Transportation Agency (CTA) recently ruled that both Canadian National Railway (CN) and Canadian Pacific Railway (CPR) respectively earned $26 million and $34 million more than they are entitled to under the statutory cap. The revenue cap is designed to help keep rates affordable for farmers and shippers in the absence of railway competition for grain transportation from Western Canada.
White said the unprecedented magnitude of the revenue overage warrants action to return the money directly to farmers in this instance.
“The Western Grains Research Foundation, which is currently the intended recipient of these funds, does important work in plant research that benefits farmers,” White said. “But the point here is that farmers overpaid by a very significant amount last year. They should get it back.”
In addition to being overcharged for 2007-08, producers this year faced the largest-ever annual increase in rail rates for grain, with costs increasing eight per cent.
Farmers, through the CWB, have been working with a number of producer groups to urge the federal government to order a rail costing review of grain transportation. This could help ensure the revenue cap is set at a reasonable level. A study commissioned by the CWB, which was released last year, estimated that the railways are making more than $100 million a year in excessive revenue from western grain transportation – not counting any revenue earned above the revenue cap.
The CWB, Canadian Federation of Agriculture (CFA), the National Farmers Union, Keystone Agricultural Producers, the Agricultural Producers Association of Saskatchewan, Wild Rose Agricultural Producers are jointly calling for a review.
Concerned farmers can send an e-mail to their Member of Parliament by visiting the CFA website.
Controlled by western Canadian farmers, the CWB is the largest wheat and barley marketer in the world. As one of Canada’s biggest exporters, the Winnipeg-based organization sells grain to over 70 countries and returns all sales revenue, less marketing costs, to farmers.
