National Farmers Union joins call for rail costing review and Maximum Revenue Entitlement adjustment

(April 2, 2015 - Saskatoon) - The National Farmers Union (NFU) has added its voice to the Agricultural Producers Association of Saskatchewan, the Saskatchewan Barley Development Commission, Saskatchewan Pulse Growers and the Saskatchewan Wheat Development Commission in calling for a full rail costing review and adjustment of the Maximum Revenue Entitlement according to the results of the report, Estimated Contributions Earned by Railways from Handling of Statutory Grains and Grain Products 2013/14, by John Edsforth of Travacon Research Limited.
 
“The last full rail costing review was done in 1992. The Maximum Revenue Entitlement, also called the Revenue Cap, is based on an estimate done in 2000-01. Back then there were 685 grain delivery points with 976 country elevators in Western Canada. Now there are only 272 grain delivery points and 342 country elevators,” said Jan Slomp, NFU President. “CN and CP’s costs have come down because they can run longer trains and make fewer stops, but they have not passed on their efficiency gains to farmers by reducing freight rates.“
 
“Farmers are paying more than their fair share of grain transportation costs,” said Matt Gehl, NFU Region 6 (Saskatchewan) Board member. “We are not just paying excessive freight rates. Delivery points are fewer and farther between, so farmers have to drive longer distances to deliver grain. That means higher costs for fuel, hiring or buying and maintaining bigger trucks and more time spent driving.”
 
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For more information:
 
Matt Gehl, Region 6 (Saskatchewan) Board member: (306) 216-6064
Jan Slomp, President: (403) 704-4364
 
 
 
Note: The Maximum Revenue Entitlement (MRE) provides a statutory limit on the amount CN and CP can increase the rates applied to the movement of regulated grain from western Canada to an export position in Western Canada. It applies currently to the rates and revenues earned by CN and CP, and affects all export shipments from western Canada handled through the west coast ports and Thunder Bay. Shipments destined to eastern Canadian domestic markets or to export positions are also eligible but must be routed through Thunder Bay (CP) or Armstrong (CN). Shipments through a west coast port for export to the U. S. for consumption are excluded. The revenue limits for CN and CP are based on an estimate of each carrier’s total tonnage, average length of haul, and revenues for the 2000-01 crop year. – from A Review of the Maximum Revenue Entitlement by Quorum Corporation