Saskatoon, Saskatchewan, Canada
February 11, 2009
The Western Grains
Research Foundation (WGRF) is now in possession of
$68,733,292 paid by the two major Canadian rail companies. This
includes nearly $60 million by which the railways exceeded their
2007-08 revenue caps for movement of Western grain, plus a
penalty of 15 per cent.
The money is being held in trust, pending results of an appeal
by Canadian National Railway and Canadian Pacific Railway. A
small amount of interest is being earned on the funds. In the
past, WGRF has sometimes had to pay part of the interest earned
on the principal back to a railway if the railway successfully
appealed.
"It will likely be a few months before it is known if the courts
will hear the appeal," says Lanette Kuchenski, WGRF executive
director. "If the appeal proceeds, the money could be tied up
for a few years."
According to the Canada Transportation Act, money received by
the railways in excess of the grain revenue cap, plus a penalty,
is paid to the WGRF. The WGRF places that money into its
Endowment Fund. The interest earned is used to support all types
of crop research.
News that the railways had exceeded their revenue cap by such a
large amount has sparked a debate among farmers and farm groups
as to the appropriate use of the money. While some groups say
crop research is the best use, others say a formula should be
found to pay the money back to farmers who have been overcharged
for their grain movement.
The WGRF has been challenged to explain how it would use the
interest generated from the funds to benefit producers.
"A detailed research funding plan is tough for us to provide,"
says Kuchenski. "At this point, we don't know the fate of the
appeals so we can't be sure how much money will actually be
available or when that decision will be final. Probably the best
guide to future performance is how Endowment Fund money has been
invested in the past."
Since 1981, the Endowment Fund has provided over $19 million in
funding for over 200 projects across a number of different crop
types. The amount available to invest depends on interest rates,
but in recent times, it has been about $700,000 a year. Recent
projects can be found at www.westerngrains.com. Numerous studies
have found multiple dollars of benefit to producers from each
dollar invested in crop research.
Letters of intent for crop research projects are accepted from
January until April 1 each year. Producers representing a broad
cross-section of farm organizations serve on the 16-member board
that allocates WGRF funding. |
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