A national farm group wants to see a clearer picture of what $68.7 million could buy in Prairie grain research.
Grain Growers of Canada on Friday called on the Western Grains Research Foundation to explain what it could achieve with such a contribution to its endowment fund. Pending any appeals, Canada’s two major railways were ordered Dec. 30 by the Canadian Transportation Agency (CTA) to pay that much to the WGRF.
The WGRF’s endowment fund, by federal law, is the beneficiary of excess funds when railways CN and/or CPR surpass the CTA’s caps on how much revenue they can make from hauling Prairie grain. Interest income from those overages joins the WGRF’s checkoff funding in supporting Prairie grain research.
But because the CTA had substantially lowered the two railways’ revenue caps for 2007-08, having ruled that their costs for grain hopper car maintenance were much lower than what the caps previously allowed for, the WGRF may see an unprecedented payday.
Organizations including the Canadian Wheat Board, Western Canadian Wheat Growers Association and Western Grain Elevator Association have all urged Ottawa to instead return nearly $60 million of that sum — representing the two railways’ actual overages — directly to the farmers who paid the freight bills in the first place.
The WGRF, the groups said, would still receive a larger-than-normal sum from the $8.97 million in additional penalties levied by the CTA. Another group, the Saskatchewan Canola Growers Association, instead urged that all the money remain with the WGRF as per regulation.
The canola group warned that some or all of that money could be clawed back in legal appeals by the railways. The WGRF has previously had to return some funds paid by the railways after successful appeals.
“We are hearing some farmers and farm groups ask for the money to be returned to farmers,” GGC president Doug Robertson of Carstairs, Alta. said in a release Friday. “However, we are also hearing from farmers, farm groups and plant breeders about the desperate shortage of public research in Canada today.”
With $68 million, invested at three per cent, the fund could generate $2 million annually for research, Robertson said.
“What value can that bring to farmers?” he said. “At $100,000 a year, that is the equivalent of 20 full-time researchers and plant breeders. This would be the biggest bump in research we’ve seen in decades.”
Robertson wondered what sort of improvements could be made to crop yields, insect or disease resistance or specific end-uses, such as wheat bred for ethanol production or better malting barleys for brewers.
“What kind of yield increase could we see with this investment? With 50 million seeded acres, even if yields were increased by half a bushel an acre, that would pay farmers their money back, each and every year for a one-time investment.”
Producers know the value of research, Robertson said, but “producers are also watching their bottom lines and so it is critical that WGRF shares its vision of what this money could mean for western farmers… Then we can all make an informed decision on research or cash back.
“This new money in effect quadruples what (WGRF) will have from the trust fund. We know there is an appeal, but it costs nothing to share the vision.”
The administrative costs would be high to return the freight overages directly to farmers and it would be difficult to do so equitably, the WGRF said in late December upon learning of its upcoming payday.
“We’re often asked why the excess railway funds can’t be returned to individual producers,” WGRF executive director Lanette Kuchenski said at that time. “WGRF is not in a position to change legislation and I don’t believe it was ever envisioned when this legislation was passed that the excess revenue cap dollars would ever be this high.”