Accountability, incentives, efficiencies and lower costs: That was what farmers wanted when the government was looking at developing new rules for grain transportation in Canada. Instead, what they have received is more of the same - a costly, inefficient grain handling system.

On August 1, 2000, the new grain transportation reforms came into effect. The federal government had claimed these new reforms would save farmers an estimated $178 million. As I watched the rail companies deal with the legislative changes, I soon realized the expectations for $178 million in savings to farmers, will probably not be realized.

CN and CP announced, that for the 2000/01 crop year, they were reducing grain freight rates for rail cars loaded at points that handle less than 25 hopper car blocks by 4% and 1.7% respectively. That meant the remaining 13.5% reduction the rail companies had to meet, mandated by the new legislation, will be passed on at the higher through-put terminals that handle 50 and 100 car spots. While this is good news for farmers located near the large concrete elevators, producers living a long distance from these sites will see their premium eaten up in added trucking costs.

Farmers growing and shipping specialty crops are also going to be penalized as a result of the changes to the grain transportation system. Both CN and CP have increased the cost for farmers shipping small amounts of specialty crops. An extra $2 and $2.50 per ton is going to be added on in cases where the rail companies have to collect small numbers of grain cars from a variety of places and assemble them before they are taken to their destination. With those types of fee increases, the rail companies are more than off-setting any savings farmers would achieve as a result of the freight rate reductions.

Another twist stemming from the new grain transportation legislation is a reduction in the number of demurrage-free days, the amount of time allowed to unload a grain car with out extra costs. Demurrage-free days at the ports have been reduced from five down to two. This means that the grain industry could pay more than twice the demurrage it paid last year if it does not improve its performance. Who will pick up that cost? If the grain companies cannot pass the cost onto their overseas buyers, the costs will then be offset by a widening of the basis contracts for farmers on the prairies. This ultimately means lower prices for farmers.

One other major problem with the changes to the grain handling system is there is still no one to be held accountable when something goes wrong. The legislation never addressed the need to define who the actual shipper is. As a result, we still have three way contracts between the grain companies, the railways and the Canadian Wheat Board. This means farmers will continue to pick up any extra expenses because in these three-way contracts there is still no way to hold any of these agencies accountable for their performance.

The federal government had the opportunity to implement real legislative changes to the grain handling system. It was estimated farmers could have saved around $300 million per year if the government had allowed for a competitive and contract based system with penalties and incentives for performance and by removing the CWB out of the transportation role.

The federal government is responsible for the small size of the freight rate reduction because they refused to give farmers true grain transportation reform. They should also be held responsible for any extra costs incurred by farmers over the next few months when the system does not function properly.

Western Canadian farmers spent the last three years telling the government that a competitive, contract based system is what is needed in the grain handling industry. Two independent reports from two individuals hand-picked by the federal Liberals explained that a competitive and contract based system is needed. What did the government do? They pushed aside the wants and needs of Western Canadian farmers and implemented their own insignificant changes so they could continue to control and limit a farmer's ability to make a decent living. I wouldn't be surprised if in a couple of years we will go through the whole process again because the changes that have been implemented will not help farmers or solve any of the problems and inefficiencies in the current grain handling system.

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