national farmers union

SASKATOON, Sask.-The NFU announced today that it will cease participating in Winnipeg talks aimed at implementing the Estey Report.

"The railways refuse to discuss open access, one of Estey's major recommendations. CN and CP are blocking discussions on creating real, effective competition in the rail transportation system," said NFU President Cory Ollikka at a news conference in Saskatoon today.

"How can we have a commercial, contractual system without competition between the railways?" asked Ollikka. "Even with effective competition, the termination of the rate cap is a bad and costly idea. Without competition, or with half-hearted measures that fail to deliver effective competition, the end of the rate cap would leave our two near-monopoly railways to charge whatever the market will bear. The removal of the rate cap will create a permanent farm income crisis."

Agricultural economists Fulton, Baylis, Brooks, and Gray calculated that deregulation and the end of the rate cap would increase farmers' handling and shipping costs by 50" - 75" per bushel.

"It is clear to us, after two-and-one-half months of talks with the railways, that they will block all moves toward a truly competitive system and that they are hostile to adequate rate and service safeguards for farmers. The railways' stance on competition makes positive outcomes for farmers so unlikely that withdrawal is our best course," stated Ollikka.

Since the release of the Estey Report, The NFU has pointed out that most of its major recommendations are extremely damaging to farmers. Estey recommended:

• The end of the rate cap. This would lead to sharp freight rate increases.
• The end of the CWB's transportation role. This would lower farmers returns, end delivery equity, and reduce farmers' power in the transportation system -The CWB was instrumental in recovering millions of dollars for farmers from the railways when they failed to move grain during the winter of 1996-97.
• The elimination of cooperative hopper car allocation through CAPG. This would deprive farmers of a voice in car allocation and increase farmer's costs by moving to an American-style allocation system.
• Selling government hopper cars to the highest bidder. Farmer ownership of hopper cars would give them a voice in the system.

Ollikka concluded: "Estey's four most significant recommendations would leave farmers with higher costs and less say in how the system operates. Now the railways are using their economic and political power to ensure that the deal for farmers is even worse. If Willard Estey, Arthur Kroeger, David Collenette, and the railways have their way, farmers will be poorer, less numerous, and less powerful."

The Winnipeg talks, initiated by transportation Minister David Collenette and facilitated by Arthur Kroeger, began in late May and are set to continue until early September. Kroeger's final report is scheduled for the end of September.

For More Information:

• Cory Ollikka, NFU President: (780) 383-2148
• Terry Boehm, NFU Trans. Committee Chair: (306) 255-2880 OR 257-3689
• Stewart Wells, NFU Sask. Board Member: (306) 773-6852
• Darrin Qualman, Executive Secretary: (306) 652-9465