With the federal and provincial governments putting pressure on Canada's two railways to do more to reduce a massive backlog of grain from last year's record harvest, West Central Alberta farmers are starting to feel the pressure.
During the board's monthly meeting on March 10, Alberta Agriculture's Grant Lastiwka updated board members on the current crisis, saying railway and port delays are causing the local agriculture community difficulty because product remains here instead of being shipped to market.
"It isn't easy trying to negotiate rental agreements and trying to put another crop in the ground and having to borrow money against grain that isn't moving,î said Lastiwka, who is based in Olds. "How do you survive? Some of those issues are short and long term. It is affecting everybody.î
"The urgency is certainly being felt in our community. It is affecting our area in Central Alberta, like everywhere else.î
Asked if the current situation is an emergency, he said, "For many people, I think they'd probably say that. People have increased crops at increased costs because it has cost them more to get the higher crop. So it's not like a real cash cow.
"They invested in fertilizers and extra sprays and chemicals and in extra storage to have that higher crop and now they can't move that higher crop. In a time when agriculture continues to carry more debt load, which they are, it's fair to say that circumstances like this put more pressure back on them.î
Asked if he sees the potential for area farmers to go out of business because of the crisis, he said, "There are discussions right now that people might have to, although they don't want to, get into their agri-invest accounts. If they've got some money saved there, do they want to get into it? For many people they don't want to cash them in.î
Agri-invest is an account where farmers have contributed to an investment account with the provincial government encouraging them to do so, he explained.
Lastiwka regularly updates the MVC agricultural service board on the state of the agriculture industry in the region.
The Western Canada 2013 grain crop of 75 million tonnes is the highest ever. Much of that grain has not been moved to ships in Vancouver and Prince Rupert.
The rail companies say cold winter weather has meant that train lengths have had to be reduced as a safety precaution.
Both the federal and provincial governments say the rail companies have failed to meet their minimum volume obligations.
On March 7, the federal government announced an order in council requiring CP and CN to move 1,000,000 metric tonnes per week, or more than double the current volume being moved.
Failure to meet the new levels could result in non-compliance fines of up to $100,000 per day.
"For the past several months, the bumper crop of grain produced in Canada has not been moving fast enough to Canadian ports,î said federal Minister of Transport Lisa Raitt.
Agriculture Minister Gerry Ritz added: "The current grain logistics system is not meeting demand and our government is taking concrete action to ensure the livelihoods of farmers and our overall economy.î
The provincial government has come out in support of the federal order in council.
"We thank the federal government for listening and for today's important steps to address the rail service backlog that is affecting our grain producers and other sectors of our economy,î said Alberta Minister of Agriculture Verlyn Olson.
"Our reputation as a world-class supplier of food, energy and other commodities is reliant on the timely and efficient movement of goods to market.î
Kevin Good, a Carstairs-area grain farmer and former Mountain View County councillor, says the transportation crisis is really starting to impact area farmers.
"Absolutely it has become a problem,î said Good. "My wheat was supposed to be moved in the middle of November and the shipment date was cancelled six times due to no railroad cars. The railcars have been cancelled so many times.
"You want to ship the grain in November to make your payments in December but there it sits.î
Asked if he foresees local farmers going out of business, he said, "In this particular area, my personal feeling is not so much, because most people have fairly well established farms and/or other income sources. I don't think it will be quite as bad as east of here where people are solely grain farmers.
"That being said, if people have upgraded their machinery, I think a lot of these guys are going to have problems making payments on their new equipment.î
During the March 10 agricultural services board meeting councillor and board member Duncan Milne questioned why late oil deliveries by train are penalized but late grain deliveries are not.
"There's no penalty for not moving it,î said Milne. "Is that something we need to address in the contract itself? Right now there are lots of oil cars moving and lots of container cars coming though with all sorts of stuff for Walmart and it takes up train space when those trains are going back to the port empty.î
Although he did not attend the March 10 agricultural service board meeting, Reeve Bruce Beattie says the grain crisis is certainly impacting farmers in the district.
"It is having a significant impact for sure,î said Beattie. "It is affecting the cash flow for the grain sector. If you can't ship your grain you don't have the income and that's what they rely on.
"It doesn't help when you have a pile of grain in your yard and you cannot move it. I understand the frustration. There certainly are problems, right across Central Alberta.î
The Alberta Association of Municipal Districts and Counties (AAMDC) was scheduled to consider a resolution at its annual meeting this week related to the grain crisis. The resolution was reviewed by Mountain View County's policies and priorities meeting on March 5.
The resolution calls on the provincial and federal governments to "enact a short-term and long-term strategy to increase railway capacity for grain shipments.î
A background note accompanying the resolution states, in part: "Farmers are frustrated because, despite harvesting the best bumper crop in history in 2013, grain is backed up due to elevators not getting enough shipping to move grain to portî and "Farmers are not being paid for last year's harvest until spring seeding, translating into lost sales and a serious cash flow issue for many producers.î
The agricultural service board is made up of sitting MVC councillors and members of the public at large. It advises the county and province on agriculture related issues and concerns.
