(Reuters circulated the following story by Rod Nickel on October 22, 2009.)
WINNIPEG, Manitoba — The Canadian Wheat Board called on Thursday for railways to keep farmer grain-loading sites open, but Canada’s biggest rail company said leaving the remote sidings in place poses a safety risk.
Canadian National Railway (CNR.TO) closed 40 Western Canada producer car sites in September, but at the request of the federal government left the tracks intact. Thirteen more in Alberta, Saskatchewan and Manitoba are scheduled for closure once the railway advertises its intentions later this month, said CN spokeswoman Kelli Svendsen.
The 53 sites consist of track branching off rail lines, where farmers can unload grain into rail cars. Loading cars at producer sites can save farmers grain-handling and transportation costs, said wheat board Chairman Larry Hill, especially if they live far from the grain elevators that handle most of farmers’ grain.
“The loss of this many sidings can only have a negative effect on the farmers of Western Canada and on the availability of the producer car shipping option,” Hill told the House of Commons agriculture committee in Ottawa.
The wheat board holds a government-granted monopoly to buy Western Canada’s wheat and malt barley.
The 53 sites represent 30 percent of CN’s farmer grain-loading sites.
The sites were little used by farmers, according to CN. But Hill said they should be left in place in light of farmers’ growing shift to loading rail cars themselves.
Farmers loaded a record 1.1 million tonnes of grain into 12,447 producer cars during the 2008-09 crop year.
Even if farmers aren’t using the loading sites, CN has to inspect and maintain each switch on main lines at a cost of C$12,000 ($11,400) per switch per year, CN Executive Vice-President Sean Finn told the committee.
“It’s about also mitigating our risk so we don’t have a very unfortunate derailment in the middle of the Prairies,” Finn said.
Svendsen of CN said she doesn’t know if the federal government has the authority to force CN to keep the loading sites open.
The cost of rail transportation — the primary way Canadian grain moves to port — has been of keen interest to farmers, many of whom believe the railways charge too much. Rail costs are one of farmers’ two biggest expenses, along with fertilizer.
The federal government recently appointed a panel to review rail freight service, a move that farmers have long urged.