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Agriculture committee For many farmers, the highest single cost they have would be rail transportation. Second to that, as you identified, would be input costs. It's something that certainly needs to be addressed. Let me talk just a bit about the acceptance of this issue. This is an issue among farmers--the need for a costing review--that spans political lines.
December 9th, 2010Committee meeting
Allen Oberg
Agriculture committee I think the two issues are separate. I don't think there's any reason why the cost review and the service review--which is nearly completed--couldn't be conducted at the same time, because they are separate issues.
December 9th, 2010Committee meeting
Allen Oberg
Agriculture committee I certainly agree with your statements that western Canadian farmers are captive to rail. The distances are too great for trucking and we don't have access to a river system, so we're dependent on rail. The other factor is that on a percentage basis we export much larger amounts of grain than our American counterparts.
December 9th, 2010Committee meeting
Allen Oberg
Agriculture committee Sorry--on what?
December 9th, 2010Committee meeting
Allen Oberg
Agriculture committee One thing is that when a piece of rail line is to be abandoned, there's always salvage value that's part of it. One suggestion I've heard is to take the salvage out of the equation. So if that line ceased to operate, that would be fine, but the infrastructure would stay, and at some point in time, it might make economic sense to operate it again, especially with some of the environmental concerns that are becoming more and more present.
December 9th, 2010Committee meeting
Allen Oberg
Agriculture committee This whole idea that if you pay higher freight rates you'll get better service is erroneous. We have 10 years of history to prove that. Freight rates have increased in the last 10 years. Has service gotten any better? Absolutely not. As for this idea you're suggesting that if you have a higher-value product you should have a higher freight rate, I don't think farmers are going to buy that.
December 9th, 2010Committee meeting
Allen Oberg
Agriculture committee But as history has shown, just because you have higher freight rates doesn't mean you get improved service.
December 9th, 2010Committee meeting
Allen Oberg
Agriculture committee We're not adding costs. We're actually saving.
December 9th, 2010Committee meeting
Allen Oberg
Agriculture committee By tendering to the grain companies, by our commercial agreements with terminal companies—
December 9th, 2010Committee meeting
Allen Oberg
Agriculture committee No, actually—
December 9th, 2010Committee meeting
Allen Oberg
Agriculture committee Can I respond to that?
December 9th, 2010Committee meeting
Allen Oberg
Agriculture committee Pardon me?
December 9th, 2010Committee meeting
Allen Oberg
Agriculture committee I can tell you, Mr. Hoback, that the Canadian Wheat Board saves farmers millions of dollars in logistics every year.
December 9th, 2010Committee meeting
Allen Oberg
Agriculture committee In fact, the number last year was $40.5 million. That's one of the great things about the Wheat Board--
December 9th, 2010Committee meeting
Allen Oberg
Agriculture committee --that the size of our operation allows the logistics—
December 9th, 2010Committee meeting
Allen Oberg