UPDATE 2-Canada toughens railway crop volume rules through harvest

Fri Aug 1, 2014 3:51pm EDT
 
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(Adds comment on crop price impact, CP comment, paragraphs 9, 10, 15)

By Rod Nickel

WINNIPEG, Manitoba Aug 1 (Reuters) - The Canadian government will require the country's two big railways to ship more than the current minimum of 1 million tonnes of crops a week through the autumn harvest as it tries to prevent a repeat of last season's backlog.

The regulations announced on Friday in the world's third-biggest wheat exporter require Canadian National Railway Co and Canadian Pacific Railway Ltd to each move 536,250 tonnes of crops each week starting Sunday and lasting through Nov. 29.

Failing to do so can result in penalties of C$100,000 ($92,000) per violation.

In March, Ottawa forced the railways to each move 500,000 tonnes weekly to unclog bottlenecks that followed record 2013 Canadian wheat and canola harvests and shipment delays caused by a brutal winter. Those requirements were due to expire on Sunday.

"Harvest looks like it might be late again. If that's the case, then there is still a lot of grain to move through August and September," Agriculture Minister Gerry Ritz said in an interview.

Ottawa's decision keeps the pressure on the railway companies, which angered farmers during the winter by delivering insufficient numbers of cars to crop elevators.

The railways say they did the best they could given the circumstances.   Continued...