1) Why do pulse cleaning plants charge a handling tariff?
Answer: Our facilities are now licensed as primary elevators - under this license category every licensee has the provision to charge a handling tariff. This change was brought on by the Canadian Grain Commission - under this change Grain Dealers lost their ability to deduct shrink. The provision to charge a handling tariff is provided for in the Grain Act for all those facilities licensed as primary Elevators.
2) Why aren't you charging an amount that is closer to the 1% shrink deducted previously?
Answer: The handling tariff has nothing to do with shrink directly. The handling tariff is a provision under the Primary Elevator License.
3) The Line companies don't charge shrink nor do they charge a handling tariff on peas and lentils - so why do you guys charge a handling tariff when the line elevators do not?
Answer: The Line elevators generally are participating in pulse markets where they can ship bulk conventional shipments containing higher levels of foreign material and in fact a lot of their red lentil shipments are not cleaned at all and simply shipped as farm dressed shipments with no cleaning. The market we participate in, which is likely 75-80% of the total pulse crop demand require a higher levelof purity and in more and more cases each year are demanding a product that is virtually free in F.M. To reach this ever increasing demand for a higher purity standard we lose more and more good product in the cleaning process - so the handling tariff helps us to offset this cost.
4) So how did you arrive at the $8.50 per m/t?
Answer: First, the primary elevator can post any amount of tariff per m/t that they wish to post. They then can charge any amount per m/t up to this amount. The $8.50 per m/t is well below what the industry could be charging per m/t. The amount was based on what we felt our average cost was over the years in handling/cleaning these items based on across the board prices today. We don't expect the handling tariff to change frequently, but it will be adjusted upward as prices increase and/or consumers demand even higher levels of purity.
Is everyone okay with this? It seems that handling tariffs are based on a "feeling" that this is what they need to charge growers. Also, these plants charge their "feeling" not only on the cleaned net product, but on the dockage they remove as well which they say has no value, yet somehow want to keep to sell.
Answer: Our facilities are now licensed as primary elevators - under this license category every licensee has the provision to charge a handling tariff. This change was brought on by the Canadian Grain Commission - under this change Grain Dealers lost their ability to deduct shrink. The provision to charge a handling tariff is provided for in the Grain Act for all those facilities licensed as primary Elevators.
2) Why aren't you charging an amount that is closer to the 1% shrink deducted previously?
Answer: The handling tariff has nothing to do with shrink directly. The handling tariff is a provision under the Primary Elevator License.
3) The Line companies don't charge shrink nor do they charge a handling tariff on peas and lentils - so why do you guys charge a handling tariff when the line elevators do not?
Answer: The Line elevators generally are participating in pulse markets where they can ship bulk conventional shipments containing higher levels of foreign material and in fact a lot of their red lentil shipments are not cleaned at all and simply shipped as farm dressed shipments with no cleaning. The market we participate in, which is likely 75-80% of the total pulse crop demand require a higher levelof purity and in more and more cases each year are demanding a product that is virtually free in F.M. To reach this ever increasing demand for a higher purity standard we lose more and more good product in the cleaning process - so the handling tariff helps us to offset this cost.
4) So how did you arrive at the $8.50 per m/t?
Answer: First, the primary elevator can post any amount of tariff per m/t that they wish to post. They then can charge any amount per m/t up to this amount. The $8.50 per m/t is well below what the industry could be charging per m/t. The amount was based on what we felt our average cost was over the years in handling/cleaning these items based on across the board prices today. We don't expect the handling tariff to change frequently, but it will be adjusted upward as prices increase and/or consumers demand even higher levels of purity.
Is everyone okay with this? It seems that handling tariffs are based on a "feeling" that this is what they need to charge growers. Also, these plants charge their "feeling" not only on the cleaned net product, but on the dockage they remove as well which they say has no value, yet somehow want to keep to sell.