The Boundary Trail Railway Co. is days away from closing a deal to buy a 37-kilometre stretch of abandoned CP Rail track between Morden and Binney, just west of Manitou. The price was not disclosed.
Kevin Friesen, a Manitou producer who heads the BTRC, said about 80 area farmers have invested $1.25 million in the company.
The province, the RM of Pembina and a Winnipeg-based grain company, Mission Terminal, which assists farmers who want to load their own rail cars, have also put in money.
On Tuesday, Agriculture Minister Rosann Wowchuk announced the province would provide $615,000 to the company in the form of a forgivable loan.
"I really do believe that maintaining this section of railway will be a positive move for the region and that local ownership can make short lines like these a viable alternative (to) trucking," Wowchuk told a news conference.
She said if farmers living near the rail line no longer have to truck their grain great distances to market, it will save wear and tear on provincial roads.
And since rail hauling is more fuel efficient than truck hauling, the short-line railway will also be good for the environment.
One rail car holds as much grain as three semi-trailers trucks.
Boundary Trail expects that up to 100 rail cars will move on its line by the end of July and at least 250 by the end of the calendar year.
Friesen said the first grain cars will be shipped from the newly acquired rail line within weeks. Once that happens, he said, he expects more farmers will invest in the company.
Boundary Trail has signed a three-year deal with the Central Canadian Railway to perform track maintenance and to pull rail cars along the line to and from Morden, the point at which they hook up with the CP Rail system. CP will also provide the rail cars.
Groups of farmers are now planning to build grain-storage facilities at Binney, Manitou and Darlingford.