Again, I'd like to thank you for the opportunity to appear before you today. I farm in southwestern Saskatchewan--the Bracken-Climax area, in Mr. Anderson's area--and I'm chairman of the board at Great West Rail.
Great West Rail is a short line in southwest Saskatchewan. It was an abandoned CPR line that they started to salvage until a group of area residents banded together and we bought it from a B.C. company. Our owners consist of farmers, private individuals, towns, villages, rural municipalities, the grain company, and two terminals.
We operate on 306 miles of track. We have 38 loading sites along our line. In saving that line we've created 30 full-time jobs, and our railway has become an integral part of our economy.
We're also an investor in and operate Fife Lake Railway. It's another short line that runs from Assiniboia to Coronach in southeastern Saskatchewan. We have three loading sites on this line.
We moved 4,352 cars last year, and we're the largest producer-car short line in Canada. All our cars are moved back to Assiniboia, where it's a hook and haul for CP.
While this review of the Canada Grain Act and the Canadian Grain Commission covers many topics, there are a few that concern us, and they're extremely important to the viability of producer-car shippers.
We're pleased to see the right of farmers to load producer cars be kept in the Canada Grain Act. We know that loading producer cars doesn't work for everyone, but it's a very important option for producers in our area.
We would like to see the inward inspection remain mandatory. While some industry players may see this as unnecessary, we feel that with the system we now have in place, mandatory inward inspection is essential for producer-car shippers and should remain for producers in general.
We also feel the recommendation for mandatory licensing and bonding of producer-car loading facilities is unnecessary. While the review mentions a safety factor concern in not licensing all our facilities, producer cars and producer-car facilities should be as safe as you can get. The grain is virtually all identity-preserved, as each car is loaded by one producer and its contents can be traced back to that producer. While their initial destination isn't overseas, producer cars can be regarded as container shipments of grain. You can always link the product contained in the individual cars back to individual farms.
The mandatory bonding issue the CGC has put forward also affects many facilities on our line. Being bonded certainly doesn't guarantee total payment in the case of default and doesn't guarantee the honesty of the company that's bonded. These requirements simply add cost back to smaller facilities that are doing fine without the bonds now.
I'm involved with a cleaning plant in Bracken, Saskatchewan, where we ship cleaned yellow peas for several different companies. We've been careful in choosing the companies we deal with and we've built a good reputation as a reliable company to do business with. But we still continually see producers deal with unknown companies because they're offering a few cents more for a certain product than we are. Should we, as a reputable company, have to bear the cost of being bonded because some producers let greed drive their marketing decisions?
Failures happen in the business world every day. If producers choose to deal with companies that aren't bonded, so be it. Good business practice and prudent marketing will be more of an asset to farmers than simply making bonds mandatory.
On the governance issue, we would like to see the three commissioners remain at the top level. We believe the decision-making process could be adversely affected if it's done by just one person and not by the three commissioners who are there now.
As for the assistant commissioners, we want someone in the field working for producers, as was supposedly their role. They shouldn't be government appointments. They should be hired by the Grain Commission. What their job title is would be up to the commission itself, but they should be in the field, not back in a Winnipeg head office.
While the proposed office of grain farmer advocacy might work as a base for these people, they must be available to solve problems where they occur.
We don't know if there would have to be the six field people or if the workload could be handled by fewer employees. But we do know that some of the assistant commissioners were invaluable to producer car loaders and farmers in general as they straightened out mistakes and unfair practices that occur in our industry.
The last point we want to address is by far the most important to our rail line and to producers. While the Canadian Grain Commission is always associated with producer cars, it's our present visual grading system that we find to be the biggest detriment to growth on our rail line. Farmers are never sure of grade when they load a producer car, and far too often we find inconsistencies in the grades at unload. We continually have producers load cars with grain from the same bin on their farm, and we have those cars come back with different grades.
Everyone hears about these problems, and after the stories hit the coffee shops, it takes forever to convince new customers to try producer cars.
KVD or visual grading has cost prairie producers millions of dollars over the years. We must begin moving immediately to a different system. The so-called black box technology is out there now and should be implemented.
There seems to be this myth that if grain doesn't fit into KVD, it isn't quality grain. Our producers are being forced to grow grain that fewer and fewer markets want. The U.S. has spring wheat varieties that outyield ours by 40%, and they continue to take market share from us.
Customers want to buy on the physical attributes of grain, not what it looks like. With black box technology, where falling numbers of the grain could be more of a price factor than the look of the grain, producers could be sure of the grade when they loaded their cars. The CGC will still have a role in making sure all those machines are calibrated, but visual inspections have to be phased out.
Statutory declarations are used all over the world to ensure the variety of grain delivered by farmers. With statutory declarations and black box technology, we feel a lot more grain would find its way to rail.
While this change has been talked about, there is a move by the CGC to have some new varieties outside of the KVD system. Hard red spring wheat and durum would still have those KVD requirements. Waiting until 2008 to end KVD requirements for minor wheat classes means they have no plans to drop KVD for hard red spring wheat and durum. We have to begin this transition now.
Please remember that there will be resistance from within the CGC for this transition, as there are jobs that will be affected by the change.
While this is a review of the Canada Grain Act and the Canadian Grain Commission, please consider how it not only affects industry players, but take it right back to the farm gate. While our grain is graded with a visual system, it is being sold into a world market that uses a different system. Too often we are selling oranges into an apple market. Being located near the U.S. border, we are familiar with their grading system. While it's deemed a premium market, the first thing they want to see when given a grain sample is a falling number test. They don't care what it looks like. They want to know what it does.
Countless trade problems and irritants have occurred and will continue to occur if we don't move to similar technology.
Given our geographic location and the condition of our road system in southwest Saskatchewan, producer cars are extremely important to our area. We must do everything we can to see more grain move by rail. This past year we kept the equivalent of 12,000 B-trains of grain off our roads. Savings in elevation charges put $4.5 million back in our producers' pockets, and that money finds its way into our local economies. Changing to a grading system that will give farmers confidence of their grade when they load producer cars will allow our line to grow and will ensure a more vibrant farm economy.
While we are sure these changes will be strongly opposed by some in the industry, please take this review back to the farm gate and consider how it affects the returns there. Farmers are too often the forgotten drivers of this industry.
Thank you for your time.