skip to main content
OSTI.GOV title logo U.S. Department of Energy
Office of Scientific and Technical Information

Title: Grain Handling and Transportation Policy in Canada: Implications for the United States

Abstract

The grain handling and transportation system in Canada (GHTS) is currently going through a major transition, both with respect to handling and transportation. Historically, the system has pitted farmers against the railways with respect to securing individual fair shares of grain revenues. But with the removal of the single desk marketing and logistics function of the Canadian Wheat Board (CWB) in late 2012, a very interesting and potentially game-changing outcome is emerging with respect to the new functionality of the grain companies in the Canadian system. While historical awareness of rail s natural monopoly position in the grain handling system has kept that sector regulated (in several ways) for close to a century, we are now starting to see the effects of a less than competitive Canadian grain handling sector on revenue sharing, along with renewed movement in the industry with respect to buyouts and potential mergers. This overview will highlight some of the changes now occurring and how they are potentially going to interact or evolve as the system moves forward. For example, the on-going regulatory instrument used to regulate grain transportation rates in Canada (called the maximum revenue entitlement (MRE) or revenue cap) is under current debate becausemore » of the introduction a few months ago of a modification to an old regulatory instrument known as extended (or reciprocal) interswitching. As opposed to the revenue cap which is a direct intervention on monopoly behavior, extended interswitching is designed to encourage the major Canadian grain carriers to compete with one another and potentially seek out new traffic (Nolan and Skotheim, 2008). But the most intriguing aspect of extended interswitching is how it might allow a major rail carrier from the U.S. to solicit grain traffic in some areas of the Canadian grain transportation system.« less

Authors:
 [1];  [2]
  1. Univ. of Saskatchewan, Saskatoon, SK (Canada)
  2. Oak Ridge National Lab. (ORNL), Oak Ridge, TN (United States)
Publication Date:
Research Org.:
Oak Ridge National Lab. (ORNL), Oak Ridge, TN (United States)
Sponsoring Org.:
USDOE
OSTI Identifier:
1210159
Grant/Contract Number:  
AC05-00OR22725
Resource Type:
Journal Article: Accepted Manuscript
Journal Name:
Choices (Food, Farm and Resources)
Additional Journal Information:
Journal Volume: 30; Journal Issue: 3; Journal ID: ISSN 9999-0001
Publisher:
AAEA (Agricultural & Applied Economics Association)
Country of Publication:
United States
Language:
English
Subject:
29 ENERGY PLANNING, POLICY, AND ECONOMY; Grain handling; Interswitching; Revenue sharing; Supply chain; Rail regulation

Citation Formats

Nolan, James, and Peterson, Steven K. Grain Handling and Transportation Policy in Canada: Implications for the United States. United States: N. p., 2015. Web.
Nolan, James, & Peterson, Steven K. Grain Handling and Transportation Policy in Canada: Implications for the United States. United States.
Nolan, James, and Peterson, Steven K. 2015. "Grain Handling and Transportation Policy in Canada: Implications for the United States". United States. https://www.osti.gov/servlets/purl/1210159.
@article{osti_1210159,
title = {Grain Handling and Transportation Policy in Canada: Implications for the United States},
author = {Nolan, James and Peterson, Steven K},
abstractNote = {The grain handling and transportation system in Canada (GHTS) is currently going through a major transition, both with respect to handling and transportation. Historically, the system has pitted farmers against the railways with respect to securing individual fair shares of grain revenues. But with the removal of the single desk marketing and logistics function of the Canadian Wheat Board (CWB) in late 2012, a very interesting and potentially game-changing outcome is emerging with respect to the new functionality of the grain companies in the Canadian system. While historical awareness of rail s natural monopoly position in the grain handling system has kept that sector regulated (in several ways) for close to a century, we are now starting to see the effects of a less than competitive Canadian grain handling sector on revenue sharing, along with renewed movement in the industry with respect to buyouts and potential mergers. This overview will highlight some of the changes now occurring and how they are potentially going to interact or evolve as the system moves forward. For example, the on-going regulatory instrument used to regulate grain transportation rates in Canada (called the maximum revenue entitlement (MRE) or revenue cap) is under current debate because of the introduction a few months ago of a modification to an old regulatory instrument known as extended (or reciprocal) interswitching. As opposed to the revenue cap which is a direct intervention on monopoly behavior, extended interswitching is designed to encourage the major Canadian grain carriers to compete with one another and potentially seek out new traffic (Nolan and Skotheim, 2008). But the most intriguing aspect of extended interswitching is how it might allow a major rail carrier from the U.S. to solicit grain traffic in some areas of the Canadian grain transportation system.},
doi = {},
url = {https://www.osti.gov/biblio/1210159}, journal = {Choices (Food, Farm and Resources)},
issn = {9999-0001},
number = 3,
volume = 30,
place = {United States},
year = {Sat Aug 01 00:00:00 EDT 2015},
month = {Sat Aug 01 00:00:00 EDT 2015}
}

Journal Article:
Free Publicly Available Full Text
Publisher's Version of Record
The DOI is not currently available

Figures / Tables:

Figure 1 Figure 1: Current Canadian extended interswitching map (applied to former CWB grains)

Save / Share:

Figures / Tables found in this record:

Figures/Tables have been extracted from DOE-funded journal article accepted manuscripts.