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By Alice McFarlane

Increasing rail competition

Saskatchewan farm group calls for extension of rail interswitching provisions

May 31, 2023 | 9:29 AM

The Agricultural Producers Association of Saskatchewan (APAS) said extending provisions included in Federal Bill C-47 would increase rail competition and lower costs for hauling farm commodities.

APAS sent a letter to Federal Transport Minister Omar Alghabra and chair of the standing committee on finance, Peter Fonseca. It stressed access to competitive rail service is critical for shippers and agricultural producers to ensure supply chain efficiency and effectiveness, as well as guard against market failure when negotiating rail service terms and rates.

APAS President Ian Boxall said rail is the most effective way to get farm products to market and interswitching is a policy tool that encourages more rail competition. He said farmers are ultimately the ones that that pay freight and bear the costs when there are disruptions in the system.

“Ninety-nine per cent of the grain elevators in Western Canada are serviced by only one railroad company, CN or CP. What interswitching would allow would be the opposite railroad of who provides your service would be able to run up the line to a maximum of 250 kilometers and pick up rail cars if the provider you normally have cannot do that for you,” Boxall said. “Adding that level of competition would be beneficial to the elevators, the shippers and also to farmers.”

When this policy was in effect during the 2016 crop year, it is estimated there was nearly $5 million in savings. Boxall said that money stayed with farmers.

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The letter makes several recommendations to the federal government, including expanding the zone distance to a minimum 250 kilometres, extending the trial period beyond the 18-months, and ensuring clear and transparent measures are in place for accountability.

“We want every producer to benefit from this policy, but the timeframe needs to be much longer than 18-months for shippers to take full advantage,” he said.

Boxall said APAS will continue to work with the federal government to ensure rail competition for Saskatchewan farm products.

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alice.mcfarlane@pattisonmedia.com

On Twitter: @farmnewsNOW