national
farmers union
SWIFT CURRENT, Sask. -The National Farmers Union is disgusted that Transportation Minister Collenette refuses to conduct a railway costing review and role back farmers' freight rates by $200 million.
"At the height of the worst farm income crisis since the 1930s, Minister Collenette has given his blessing to CN and CP to continue overcharging farmers by $200 million annually. A costing review and resulting reduced freight rates would put about $5,000 in the pockets of the average grain farmer over the next year. That's far more than the AIDA program will provide to many of those families," said NFU Saskatchewan Region Coordinator Stewart Wells.
Independent economists and the CWB have calculated that current freight rates are about $200 million above the level, which they would have been, had quadrennial costing reviews and productivity-gain adjustments continued. On a 1500-acre prairie grain and oilseed farm, that works out to $5,000 annually.
Prior to 1992, the government conducted regular costing reviews and adjusted freight rated downward to reflect railway productivity gains resulting from factors such as new technology, more fuel efficient locomotives, and lower staffing levels. Since the government conducted its last costing review in 1992, railways have eliminated cabooses, cut staffing levels by up to 45%, and benefited from new cost saving technologies. "In 1992, CN had 34,000 employees, it now has less then 19,000. Current freight rates are based on costs which allow for those 34,000 employees," said Wells.
At the May 12 meeting in Winnipeg where Minister Collenette announced his Estey Implementation Process, group after group called for a costing review. In late April, the CWB and numerous organizations called for a costing review: those organizations included: Agricore, Alberta Soft Wheat Producers Commission, the CFA, the Hudson Bay Route Association, Keystone Agricultural Producers, the NFU, the Sask. Association of Rural Municipalities, Sask. Wheat Pool, Wild Rose Agricultural Producers, and Winter Cereals Canada Inc. United Grain Growers has also endorsed a costing review.
"No one can dispute that the vast majority of farmers want a costing review and subsequent rate reductions. There is far greater consensus on that than on implementing Estey," said Wells.
Wells suggested that Minister Collenette's department could estimate productivity gains and implement rate decreases in time for the August start of the coming crop year. The government could then undertake a detailed review at its leisure and adjust rates more precisely based on its findings. "The accumulated windfall to the railways over the seven years since the last costing review is approximately $645 million. Even if the government errs in its estimate and sets total freight rates $10 million or $20 million too low, the railways will not be unduly burdened," said Wells.
Wells concluded: "Farmers are under intense financial stress and feeling the pain. They cannot continue to subsidize multinational rail corporations. A costing review can dramatically reduce farmers' costs. Minister Collenette's plan to implement Estey will have precisely the opposite effect. Minister Collenette is refusing to conduct a costing review for the same reason he is intending to implement Estey: he is intent on pleasing his friends at CN and CP, regardless of the costs to farmers."
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