The Rural Voice, 1991-08, Page 12It Pays
to Know
About
FCC
Long -Term
Loans
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Loan, you can lock in your
interest rate for 5,10,15 years, or
longer. Repayment terms are
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Long -Term Loans can be
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to purchase land, equipment, and
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' le' Corporation
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8 THE RURAL VOICE
MAKING CHANGES IN
GRAIN HANDLING
Robert Mercer is editor of the
Broadwater Market Letter, a weekly
commodity and policy advisory letter
from Goodwood, Ontario LOC 1AO.
There is plenty of talk these days
about Canadian unity and the impor-
tance of a single economic/political
unit to compete in the new global en-
vironment. The practice is far more
difficult than the posturing.
Take for example grain transporta-
tion handling. There are two com-
pletely different systems in the east
and the west. What is similar is the
speed at which change and consolida-
tion are taking shape. There may be a
temporary lull in Ontario while the
situation with UCO unfolds as to the
shape of its new structure, but basi-
cally the move continues to greater
concentration and fewer players.
In the prairies, the consolidation
continues, but the players are differ-
ent. The Pools are the majority play-
ers. Once again, the country elevator
system is shrinking rapidly in the west
where grain shipments are in an up-
ward trend. Because of the expense of
building new elevators in the country,
it has been suggested by retired CWB
Commissioner, Larry Kristjanson, that
on-farm grain storage facilities could
be licensed as part of the handling sys-
tem. "We all know that a relatively
small number of large farmers produce
a relatively Large percentage of the
grain. These farms are moving into
computerization. These should be
hooked up to the country elevator sys-
tem so farmers' stocks become ship-
pable with only a day or so delay just
as the stocks in store are now.
"The farmer is not going to be
wildly enthusiastic about divulging his
stock position to the elevator or being
required to load up his grain and deli-
ver it to the country elevator on short
notice, but I think the answer to this
lies in instituting a program where the
farmer is paid from the pool accounts
for storing grain in exchange for very
firm commitment for keeping the
grain in condition and delivering it on
demand," Kristjanson says.
If grain volume is to increase, and
if Canadian grain is to compete inter-
nationally without all the profit being
taken out at the farm gate, the hand-
ling system must become more effi-
cient. Here the CWB ex -Commission-
er says "We have been getting by with
the current rolling stock. But as cur-
rent rolling stock wears out and vol-
umes of grain increase, hopper car
shortages will become more frequent
and more severe. It is imperative that
the railways have an ongoing car
acquisition program."
The third element of the grain
handling system is the terminal eleva-
tor. According to Kristjanson, we do
not have enough capacity on the west
coast, too much at Thunder Bay, and
the wrong kind on the St. Lawrence.
He proposed getting an immediate
start on the problem of the west coast,
but the problems to the east are more
complex. He says: "On the east
coast, we have what seems to be a
basically inefficient system. We ship
grain to Thunder Bay, unload it, clean
it, ship it in Takers, unload it in termi-
nals on the St. Lawrence and then load
it once again to ocean vessels.
"What is needed is to cut out the
costly extra handle at Thunder Bay.
But to do this, two things must hap-
pen. Terminals at Montreal and Que-
bec must be equipped with cleaning
capabilities and the railways must be
willing to compete with the cost of.
moving grain by faker."
These are some of the changes to
expect from the west, in grain han-
dling and transportation — changes
that will take much debate and time to
implement. These changes will also
affect rates and structure in the east,
and when coupled with any possible
change in the method of payment for
the Crow Rate subsidy to the produc-
ers, rather than the railroads, will
make the west very competitive in
meats as well as grains.0