CWBA argues competition creates chaos at ports

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Farmers facing long delays to deliver their grain are not accepting Agriculture Minister Gerry Ritz’s excuses for the chaos at Canada’s grain ports warned the Canadian Wheat Board Alliance, a prairie wide organization representing grain farmers.

“The Minister’s excuses are a diversion from the fact he destroyed the logistical efficiency created by the single desk Canadian Wheat Board,” explained Bill Gehl, the group’s chairperson.

“This shipping chaos is a good example of where competition wastes resources and makes sure farmers are not able to deliver a good harvest and get full value for it. Farmers have now missed record high prices and no amount of magical thinking about competition will change the problem of chaotic grain transportation created by the loss of our single desk wheat board,” Gehl observed.

“The basic problem is without the farmer-controlled single desk Wheat Board nobody is coordinating grain sales, transportation logistics, and the efficient use of port terminal facilities” Gehl said. “Port terminals are now competing with each other to use rail transport capacity just to generate grain handling revenue.  The result is they do not always have the right grade and type of grain in place so ships either cannot get a full load at one terminal, as they could when our Wheat Board arranged deliveries, or ships have to wait for more of the correct grade and type of grain to arrive. The result is too many ships waiting much too long and that means farmers get less money.”

Gehl went on to say “a bumper crop is not unprecedented and Stats Canada’s November report indicates available grain supply is up only 10 percent. The Minister’s proposal to give more money to the railways by trashing the freight rate cap on grain transport when he concedes the railways have moved 20 percent more grain this year is another example of his ideological blindness to reality.

“A lack of orderly marketing also allows a flood of Canadian grain to depress the world market and congest the transportation system. This means those farmers who get to deliver will get a lower price and those who miss being able to deliver get no price at all” Gehl said.

“Orderly marketing and the single desk Wheat Board addressed our disadvantages of distance, a constrained transportation system, and competition from other often heavily subsidized nations. This provided benefits to everyone in the Canadian grain system. Without the single desk farmers are simply exploited by more powerful players who can download the costs of competition onto them, which is exactly what we are seeing with the chaos at port this year and the Minister’s suggestion that farmers should pay even more to support this deeply flawed private system,” Gehl concluded.

Organizations: Canadian Wheat Board Alliance

Geographic location: Canada

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