(CBC News circulated the following on May 4, 2010.)
CALGARY — The National Farmers Union is criticizing a move that allows railway companies to hike rates for moving western grain by seven per cent, effective Aug. 1.
“At the same time that the railways are cutting service and foisting costs onto farmers, the railways are asking for, and receiving, government approval to raise freight rates,” Terry Boehm, the president of the NFU said Tuesday in a news release.
Boehm was reacting to an April 30 announcement by the Canadian Transportation Agency that increases the maximum revenues available to Canadian National Railway and Canadian Pacific Railway for moving grain in Western Canada.
According to the federal regulator the revenue cap was allowed to increase due to rising fuel costs.
“The [calculation] is essentially an inflation factor that reflects forecasted price changes for railway labour, fuel, material and capital purchases by CN and CPR,” the CTA said in a news release Friday.
The farmers union, however, expressed concern that the calculation does not take into account efficiencies and cost-saving measures that could have lowered freight rates.
“[T]here is no mechanism in place to adjust the revenue cap downward to account for increased railway productivity and efficiency,” the NFU said.
“The railways have eliminated their cabooses, tore up branchlines, adopted more fuel-efficient locomotives, cut the number of grain delivery points, and have driven the system more toward 50- and 100-car loading,” the NFU said. “All these moves have reduced railways’ costs.”
The farmers union said there should be a thorough examination of the costs of moving grain so that farmers can share in the benefits.