Farmers and communities looking over the most recent proposals for transportation reform should be aware of what a revenue cap won't protect says NFU Transportation Chair, Terry Boehm. Boehm says farmers may be comforted by the term "cap" but the proposed revenue cap has fewer protections than the existing rate cap and will likely be used by railways and grain companies to shift grain delivery to terminals.

The rate cap prevented railways from raising rates at smaller points. This will not be the case under a revenue cap. The proposed revenue cap will allow railways to adjust rates based on many factors. These factors include the ability to raise rates due to a car shortage and the ability to raise rates based on grain with a higher value such as canola. These will be arbitrary railway pricing decisions.

A number of the proposals for a revenue cap made during the recent Kroeger talks included attempts to limit differentials but seem to have fallen out of subsequent proposals.

Boehm says, "These new pricing tools will allow railways and grain companies to very quickly alter or downsize the system to suit their needs. While the revenue cap has clear benefits for the railways and grain companies, producers will incur higher costs to their overall transportation system."

For more information, contact:

• Terry Boehm (306) 255-2880 or (306) 257-3689
  
• Stewart Wells (306) 773-6852