Thank you, Mr. Chairperson, honourable members, and guests. Our presentation is only about six minutes, not the full ten.
My name is Richard Phillips. I have a farm in Saskatchewan and I'm with the Grain Growers of Canada. With me today and sharing our time is Rick White. Rick also has a farm is Saskatchewan and is with the Canadian Canola Growers Association.
I want to give you an overview of why farmers use producer cars and give you some actual dollar figures, and Rick will be addressing other rail issues that affect our competitiveness as growers.
So why do farmers use producer cars? Very simply, they offer us the opportunity to save some money. I was going to share with you a cash ticket. I'll just go through the numbers. This is some barley that I sold this spring. I can give you some real numbers of what we actually would save with the producer car.
Whether I sell my grain to a grain company or whether I load a rail car myself, I have to pay the rail freight no matter what. And the rail freight on this is about $2,200. Then when the car gets to port position and they clean it in the terminals, I also have to pay that. No matter what, it has to be paid. So in total it would cost me about $2,700, even when I'm shipping in a producer car. But what I would save is the cost of elevation that the grain companies charge to handle my barley, and that was right around $1,000.
In terms of process, I would have called either the Wheat Board or the Canadian Grain Commission. I would have said I want a producer car. The car would eventually arrive and be spotted on a siding. I would fill it with my grain and call the railway to be released. That's what I would do, in terms of process, to fill my own producer car.
However, there are risks involved. If the roof hatches on the rail car leak and water gets in and spoils the grain, the loss is 100% mine. If there is a crack in the bottom of the car and the grain trickles out all the way to Vancouver, then I also lose that. The car might not come for weeks or even months. When you order a car from the railway, who knows when it's going to come. It could be in a big blizzard, it could be in a snowstorm; who knows when they're going to spot the cars.
Those are the risks you have when you want to ship the grain yourself. So I have to decide if that $1,000 or $1,500 is worth those risks, or do I just take it to the grain elevator.
The other thing with the grain elevator is that there's usually some flexibility on when I can deliver. Probably more importantly, they can blend my grain. They might have some good grain and they can bring mine up a grade and give me the extra money for that. So I can make hundreds of dollars just selling to the grain company. Lots of farmers deal with the grain companies. That's why the vast majority of grain still goes through them and not through those producer cars.
In terms of producer car numbers, we've seen over a 50% increase over the last five years. One reason for that is that there are a number of short-line railways out there successfully operating today. And on the short-line railways quite often there are no grain elevators, so all they do is load producer cars. A lot of producers in those areas strongly support those producer car loading sites and they will deliberately try to do their business there to support their local community and business and railroad.
In summary, from my point of view the producer cars provide a really important check and balance in the system, because I, as a producer, always have the option if I want to ship my grain in producer cars. If I go to the elevator and I feel like I'm getting a runaround, that I'm not getting a fair deal, that I'm not getting fair grades or dockage, then I have the choice. I can order a car and I can ship my grain. So for me as a producer, it's critical that we have those cars and that we have spots to load them--which comes to the siding issue, which I think SARM is probably going to talk about.
We're really very unhappy with how sidings are being discontinued today. The notice period is way too short. But I'll leave it to my colleagues to explain more, and we fully support SARM's position on this.
Rick, do you have a few words on some other rail issues?