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Canadian Wheat Board

Prairie strong, worldwide

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2000

September 1, 2000

CWB launches first transportation tender

Winnipeg -The CWB today announced it has issued its first tender as part of the new commercial grain handling and transportation contract-based system. The CWB, grain companies and railways have been meeting for a number of weeks to reach agreement on how the new transportation system should operate.

"This comprehensive process took the views of all parties into consideration," said Adrian Measner, Executive Vice-President of Marketing. "The negotiations were very professional, and while everyone is not in total agreement, we've come up with a document that will allow us to start the process of tendering. We will continue to work with the grain companies and make any necessary refinements as we gain more experience with tendering."

As part of the new legislative environment, the CWB is expected to tender for the movement of 25 per cent of its business through the ports of Vancouver, Prince Rupert, Thunder Bay and Churchill over the next two years. Grain companies that win tenders will be responsible for making arrangements for the movement of this grain such as deciding where the grain will originate, which port terminal will be used and other details to ensure the tender is effectively executed and the grain gets to port on time. The contracts between the grain companies and the CWB include penalties for non-compliance by either party.

To complement the tendering process, the CWB has also developed a new car award system for non-tendered movement. The system, expected to be in place by December, requires more discussion with industry but it will award cars to the grain companies based on where farmers sign contracts and deliver. "Because the new system ties rail cars to farmer contract sign-up and deliveries, competition should increase and farmers should have more negotiating power with the grain companies," said Measner. "These were critical features in designing a new system. Our bottom line was to enhance the position of farmers in their dealings with grain companies."

In addition to these details, the CWB and grain companies also agreed on both Board and non-Board rail car requirements for the next six weeks to ensure all grains move as smoothly as possibly until all new procedures are in place.

Under the new environment, the CWB will maintain its status as the shipper of grain which ensures the grain is routed to the most economical facility, port or destination.

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 revenue, less the costs of marketing, to farmers in Western Canada.

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