DRAYTON VALLEY, Alta. - A growing number of Alberta farmers have discovered a new cash crop, and it's being harvested at the expense of the province's commercial agriculture haulers.The abuse of farm ...
DRAYTON VALLEY, Alta. – A growing number of Alberta farmers have discovered a new cash crop, and it’s being harvested at the expense of the province’s commercial agriculture haulers.
The abuse of farm plates and the Alberta Farm Fuel Benefit (AFFB) program by some farmers is putting truckers out of business at an alarming rate, says Will-Dor Ranch owner, William Sinclair. Although he’s a beef farmer, he also runs a commercial trucking operation, specializing in the delivery of hay and straw.
But he says his business is barely staying afloat, as he is unable to compete with farmers who are illegally hauling agricultural commodities for profit.
The AFFB offers a fuel-tax exemption for farmers to the tune of 15 cents per litre. In addition, by running farm plates on a rig, a farmer is able to avoid many of the costs and regulations faced by traditional for-hire and private operators. All told, Sinclair estimates it costs about 87 per cent more to operate a commercial truck than a farm truck.
Since the farm benefits are only intended for farmers hauling their own commodities and supplies to and from the farm, they shouldn’t pose much of a threat to commercial truckers. However, Sinclair says numerous loopholes in the system make it easy and lucrative for farmers to haul agricultural products for others, too.
He has seen many legitimate trucking businesses fold over the past year as a result of this, and as a result has formed an action group called the Association for the Transportation of Agricultural Products in Alberta (Trans Ag). While the group isn’t opposed to the AFFB, Trans Ag is trying to stop farm status abusers in their tracks. So far it has about 30 members, all of them fuming over the level of abuse.
Dennis Jonker, an owner/operator who used to run three cattleliners, says he has had to put his highway tractor up for sale and scale his operation back to a single trailer pulled by a one-tonne truck.
“I cannot compete with farm fuels and farm insurance and the ignorance the farmers have towards commercial transport,” says Jonker. “I have lost more business to this type of illegal activity in the past few years than I can handle.”
Sinclair says his own trucking operation isn’t faring much better.
“We cannot continue another year at this pace, we’ve either got to join them and run their way or we’re going to have to park,” he says. “I don’t think a week goes by without another guy throwing in the towel.”
Sinclair always suspected some farmers were illegally hauling for profit, but his curiosity was piqued after receiving 11 calls for rates over two days. Each of the callers scoffed at his rates, and gave him the same response: “My neighbor down the road has rigged up a truck and I can get him to haul for half of what you want, how come you’re gouging us?”
Since then, Sinclair has done a little more Columbo-style sleuthing, questioning farmers with semi trucks parked at truck stops. He has accumulated a list of nearly 600 people who are violating farm status benefits to haul commercially. Many of them admit they haul for profit, but say it’s their right to do so as a farmer.
“These guys run side by side with us,” says Sinclair. “We’re out in the field competing with these guys every day and they’re custom hauling with farm plates and farm fuel.”
Since Sinclair has had no problem finding violators, why aren’t Alberta Transportation inspectors doing the same?
“There are just so many grey areas and we are finding more and more grey areas every day,” says Sinclair, noting the inspectors’ hands are tied because it’s nearly impossible to convict someone under the cloudy regulations.
“The only way this is going to change is if the government rewrites the total farm status act,” says Sinclair. Trans Ag has been lobbying the provincial government to do just that, but its efforts have yielded little more than lip service.
Transportation Minister, Ed Stelmach, responded to Sinclair’s concerns in a letter on May 1. He confirmed farmers can only haul for profit after receiving a permit from the Motor Transport Board.
“I believe most farmers use this permit responsibly, but I acknowledge there may be instances when this is not the case,” writes Stelmach. “If a carrier is identified as non-compliant with legislative requirements, the department … does investigate and take appropriate action.”
Deputy Premier and Minister of Agriculture, Food and Rural Development, Shirley McClellan, also wrote back, offering some hope for a solution.
“We must all continue to work towards an equitable solution to this problem,” she wrote in a letter dated May 15. “It is vital to our agricultural industry that we maintain the AFFB to keep producers competitive with neighboring jurisdictions. It is also vital that we keep our commercial truckers competitive and in business.”
But any hope of a quick fix was dashed when key government representatives called off a meeting with Trans Ag, the day before it was slated to take place.
With inspection officers regularly pulling over farm-plated rigs at weigh scales and inspection stations, how do so many people get away with this scam? Since farm truck drivers don’t have to provide a bill of lading, it’s nearly impossible to prove they don’t own the freight they’re hauling.
And in the case of livestock haulers, where a manifest is required, drivers will simply carry two of them. One manifest claims the animals on-board belong to the driver, while the legitimate one, which is provided to the receiver, has the actual owner’s name on it. In some cases, the driver buys the animals when he picks them up, and sells them when he arrives at their destination at pre-arranged prices.
“What can you do?” asks Sinclair. “They’re the owner – they just bought it two minutes ago.”
This scam is proving to be so lucrative, even non-farmers are going to great lengths to get a piece of the pie. Sinclair says he’s heard of people buying small acreages just so they can cash in on trucking. After that, in order to qualify for farm benefits, they just have to buy $10,000 worth of livestock or farm equipment, which they can then sell for the same price. And, ch-ching… they’re now able to qualify for farm status benefits and can start hauling livestock and ag-products illegally. It’s gotten so bad that Trans Ag estimates there are now more illegal ag-haulers running Alberta highways than legitimate commercial operations.
“One farmer buys a truck and he tells his neighor ‘Geez, there’s nothing but money in this,’ so his neighbor buys a truck,” says Sinclair.
Lloyd Andruchow, head of program policy and evaluation with Alberta Agriculture, agrees this trend is continuing to escalate.
“With the increase of the transportation of feed because of drought in the province, there are a lot more farm trucks on the road hauling feed,” says Andruchow. “Farmers are becoming very creative trying to find a way to make money with their big trucks and they’re trying to supplement their income.”
Since government has been slow to react to this problem, Trans Ag is trying desperately to recruit help from other associations. The Alberta Motor Transport Association (AMTA) recently met with Sinclair, and the association has promised to bring this issue forward the next time it meets with Alberta’s Transportation Minister.
“There’s always been concerns about the abuse of rules and regulations and this is one situation where it’s been identified to us and we’ll definitely be working with the industry and with government to see if we can remedy this situation,” vows Mayne Root, the AMTA’s director of compliance and regulatory affairs.
But whether or not the AMTA will be able to use its clout to sway the Alberta Tories is still anyone’s guess. There are three government departments responsible for administration of the AFFB (Alberta Revenue, Alberta Transportation and Alberta Agriculture) so the biggest challenge may be cutting through the bureaucratic red tape.
Andruchow admits his department is well aware of the problem and is prepared to help develop solutions.
“We think most peopl
e abide by the farm fuel policy but there are those that, if they see we are unable to police the issues, they may be inclined to buy more trucks and indulge in this,” says Andruchow. “The penalties may not be significant to act as a deterrent so we need to get together and look at what we can do to get integrity back into the system.”
Meanwhile, Sinclair and the rest of the commercial haulers that make up Trans Ag just hope a solution comes before it’s too late. Otherwise, Sinclair says there may soon be only one option left.
“Maybe a guy should just call their bluff, throw farm plates on and go back to work,” he concludes.
Trucking as a cash crop
Will-Dor Ranch owners, William and Doris Sinclair may own a commercial trucking operation, but they’re also farmers.
This gives them a unique perspective into the issue of farm plate abuse, and allows them to compare costs on a first-hand basis.
The numbers below indicate the typical cost difference between operating one tractor and trailer, both commercially, and as a farmer. The numbers are based on their 2001operating costs.
*Operating illegally with a farm vehicle means an annual cost savings of $20,857.57 for each truck/trailer.n