AAFC: New Regulations For Fair Rail For Grain Farmers Act.

[AgrivilleAdmin]

Agriculture And AgriFood Canada News

Important measures for the grain handling and transportation system now in force.

New regulations all related to the Fair Rail for Grain Farmers Act

August 1, 2014 Saskatoon, Saskatchewan - Agriculture and Agri-Food Canada, Transport Canada

Agriculture Minister Gerry Ritz and Transport Minister Lisa Raitt announced today the coming into force of a series of important regulations and an Order in Council (OIC) related to the implementation of the Fair Rail for Grain Farmers Act (Bill C-30), which received Royal Assent on May 29, 2014.

The Fair Rail for Grain Farmers Act amended the Canada Transportation Act and the Canada Grain Act to ensure that Canada’s rail transportation network moves grain to markets as quickly and efficiently as possible, following a record crop year for Canadian farmers.

The measures, which take effect immediately, include:
• The passing of an OIC, which sets out the minimum grain volumes that Canadian National Railway Company (CN) and Canadian Pacific Railway Company (CP) are each required to move from August 3, 2014 to November 29, 2014.
• Regulations requiring CN and CP to provide additional data on grain movement to better monitor the overall performance of the rail-based supply chain.
• Regulations to clarify the operational terms in a service level agreement that can be arbitrated by the Canadian Transportation Agency, to support commercial negotiations between shippers and railways. These newly defined rail service obligations will increase predictability for all shippers.
• An amendment to the Railway Interswitching Regulations extending the limit for rail interswitching from 30 kilometres to 160 kilometres in the provinces of Alberta, Saskatchewan and Manitoba for all commodities to increase competition among railway companies and give shippers access to alternative rail services.
• Regulations to provide farmers with better protection through more accountability for grain companies in contracts.

Quick Facts

• At 76 million tonnes, the 2013-14 Western Canadian crop was 50% higher than the 10-year average.
• Since March 7, 2014, when the initial Order in Council, which set out minimum weekly volumes of grain that CN and CP were each required to move was passed, the railways have together moved an average of more than 1 million metric tonnes of grain per week.
• The regulations passed today are intended to maximize the amount of grain moved by rail before the winter season and allow the government to re-assess the situation later in the fall, with the longer term goal of returning carryover stocks to normal levels by the end of July 2015.

Quotes

“After taking immediate action to get grain and other commodities moving, our Government has been building a solid foundation for managing future challenges. Today’s regulations are the latest step in our ongoing efforts to create a rail supply chain that farmers and all shippers can depend on as they grow the Canadian economy.” - Agriculture Minister Gerry Ritz

“The coming into force of these important regulations puts the measures in place to avoid a repeat of last year’s problems. Our Government has made tough decisions for the benefit of our producers, and to maintain Canada’s good reputation as a global supplier.” - Transport Minister Lisa Raitt

Associated Links

• Regulations on Operational Terms for Rail Level of Services Arbitration
• Regulations amending the Railway Interswitching Regulations
• Amendments to the Canada Grain Regulations
• Harper Government Welcomes Passage of Fair Rail for Grain Farmers Act
• Bill C-30 Passes Third Reading in the House of Commons
• Harper Government Introduces Legislation to Address Rail Capacity Challenges
• Harper Government acts to get grain moving in Western Canada

[AgrivilleAdmin]

Grain Growers of Canada statement on the Bill C-30 regulatory package

(SASKATOON, SK, August 1, 2014) The Grain Growers of Canada were pleased with the regulatory package for Bill C-30 that was announced earlier today by the Honourable Gerry Ritz, Minister of Agriculture and Agri-Food.

The changes announced today will help to ensure that Canada’s rail transportation network moves grain to markets as quickly and efficiently as possible, while providing more clarity on the obligations of grain companies and railways, and increased accountability through mandated penalties and the recovery of expenses.

Moreover, the increase and extension of the mandated weekly minimum volumes will help ensure that the backlog from last year’s record harvest continues to clear. This is important, as we are still expecting a large carryover from last year and near-average harvest this year, despite adverse conditions in parts of the country.

We’re confident that Bill C-30 and its regulations will help to ensure that Canadian farmers have a transportation network that can keep pace with the global demand for our products in the year ahead, especially in light of Canada’s aggressive trade agenda.

We know that Bill C-30 was not intended to be a long-term solution, which is why we are pleased with other steps the government is taking, such as expediting the Canada Transportation Act review – a process that we will take part in.

The Grain Growers wishes to thank Minister Ritz, and the Honourable Lisa Raitt, Minister of Transport, for their efforts on the grain transportation file and for listening to our concerns. We look forward to continuing to work with the government to achieve a transportation system that is balanced, accountable, and with adequate capacity for all commodities.

The Grain Growers of Canada provides a strong national voice for over 50,000 active and successful grain, oilseed and pulse producers through its 14 provincial and regional grower group, representing wheat, durum, barley, canola, oat, corn, soybean, pea, lentil, rye, and triticale farmers from across Canada.

[AgrivilleAdmin]

AWC commends federal government on prioritizing legislation to improve grain transportation
(Calgary, Alberta) August 1, 2014 The Alberta Wheat Commission (AWC) is pleased with the high priority the federal government has placed on improving Canada’s grain transportation system through the Fair Rail for Grain Farmers Act (Bill C-30). The Honourable Gerry Ritz, Minister of Agriculture and Agri-Food, announced the final regulatory packages supporting the legislation today at a media conference in Saskatoon.
Bill C-30 represents the first major step needed to build a sustainable and reliable rail transportation system in Canada.
“The federal government recognized that quick action was necessary,” said Kent Erickson, Chairman, Alberta Wheat Commission. “The grain industry is experiencing tremendous growth and it’s imperative that our supply chain is able to support timely grain shipments. I want to thank the Minister on behalf of AWC for moving this legislation forward.”
Today’s announcement represents the necessary progress in order for western Canadian grain to remain market competitive.
“Farmers suffered severe economic harm from the shipping challenges of the winter of 2013-14 and Western Canada’s reputation as a reliable supplier of grain was compromised. This issue needed immediate attention and we sincerely appreciate seeing the beginning of long-term solutions,” Erickson said.
AWC has been an active participant throughout the development of Bill C-30 and will continue to press for measures to enhance the accountability of railway companies as part of the Canada Transportation Act Review.

[MBgrower]

Now we need similar regulation to force graincos to report weekly export sales, both tonnes and price and elevator farmer cash bids. Perhaps the grain commision can add this to their current weekly report. Afterall there is only a few families who need to be asked to supply this information.

[gustgd]

Wheat Growers – yesterday, the federal government announced regulations relating to rail transportation as well as farmer contracts with grain companies.

The government has extended the Order (initially issued in March) under which CN and CP were required to each ship 500,000 tonnes of western grain per week. The amount has been increased to 536,250 tonnes per week and extended until Nov. 29. Depending on the size of the crop, this level of shipments should reduce overall grain stocks to within the range of normal by the end of November. The government will re-evaluate the situation prior to the end of November to assess whether a minimum shipping order should continue. Our thinking is that the minimum shipping order may be suspended at that time, unless stock levels and basis levels are such that continuation of the order is warranted.

The government is also extending the interswitching distance from 30 to 160 km. This means that an elevator that is within 160 km of an interchange with another railway will be able to obtain an order from the Canadian Transportation Agency requiring the host railway to ship its grain (at a prescribed regulated rate) to the competing railway. This change increases the number of elevators eligible to use interswitching from 48 to 261. It is questionable as to whether this provision will significantly increase competition between CN and CP, however it should improve rail service to those elevators that are within 160 km of an interchange with BNSF.

The regulatory changes will also allow the government to collect more complete data from the railways including shipments to the U.S. and Mexico. The regulations also attempt to provide greater clarity regarding service agreements negotiated between shippers and railways. Under the Canada Transportation Act, a shipper is entitled to seek arbitration from the Agency if it cannot reach an agreement with a railway. While the regulations provide some clarity here, still missing is a provision under which a shipper could seek arbitration regarding the penalty provisions in a service agreement. This means that shippers will likely have a tough time trying to negotiate reciprocal penalty provisions if the railways fail to meet performance standards. As part of the CTA review process, the Wheat Growers will be seeking to have penalty provisions included as one of the elements in service agreements that can be arbitrated.

A final positive regulatory change that was introduced relates to grain contracts between farmers and licensed grain companies. It will now be required for these contracts to specify the compensation to be paid to farmers in the event grain is not accepted within the specified delivery window. The Canadian Grain Commission will act as an arbitrator in cases of contract disputes between farmers and grain companies.

Below is a press release we issued relating to the regulatory changes. Please feel free to contact us if you have any questions or concerns.

Blair Rutter
Executive Director
Western Canadian Wheat Growers Association
204-256-2353

[wmoebis]

I wonder what the new contracts will look like. Most contracts are 90 day delivery leeway and Co's won't budge when signing. Instead of 90 days they may go open ended or something and won't budge.