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Canadian Wheat Board

Prairie strong, worldwide

Newsroom

2000

April 28, 2000

CWB Board of Directors condemn rate increase

Winnipeg -- The Board of Directors of the CWBcondemned the increase in the maximum rate scale for grain movement recently announced by the Canadian Transportation Agency (CTA).

Chairman Ken Ritter said, "It is unbelievable that farmers should be expected to pay another $1.45 per tonne to the railways when it has been shown that they have been over-paying for nearly a decade."

While the rate increase is a consequence of the price indexing formula prescribed in the Canada Transportation Act, the CTA's own review of railway costs last fall documented that this calculation results in excessively high freight rates because it ignores productivity gains from which the railways have benefited since 1992.

"We have seen the results of the CTA's costing review for 1998 and it confirms that farmers are entitled to significantly reduced rail rates," Ritter said. "For an average-sized farm that entitlement is more than $5,000."

"Both railways have recently announced record or near record profit levels in the midst of a farm income crisis. Excessive freight rates are the direct result of a lack of competition in the rail industry. We are calling for the federal government to rectify this unacceptable and untenable situation."

Ritter also urged the federal government to make a decision for grain transportation reform based on the recommendations supported by the major farm organizations, Keystone Agricultural Producers, Saskatchewan Association of Rural Municipalities, and Wild Rose Agricultural Producers. With the implementation of these recommendations, the CWB is prepared to move forward with a package of tenders and commercial contracts that will enhance competition and improve system performance in meeting the needs of grain producers and their customers around the world.

The CWB is the world's largest farmer-controlled wheat and barley marketer. Headquartered in Winnipeg, Manitoba, it is one of Canada's biggest exporters and the largest net earner of foreign exchange. Marketing Prairie-grown wheat and barley to over 70 countries around the world, the CWB returns all sales revenues, less the costs of marketing, to farmers in Western Canada.

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