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The Destruction of the Prairie Grain Co-operatives

During the 1920s, following years of frustration over low grain prices and the high fees charged by different grain companies for handling their grain, prairie farmers banded together and established three wheat co-operatives - the Saskatchewan, Manitoba and Alberta Wheat Pools. The wheat pools enabled farmers to establish a grain-handling system owned and operated by and for farmers, and also gave them clout in negotiating with the railways, implement companies, and provincial and federal governments.

The establishment of the pools was spearheaded primarily by three groups - the Saskatchewan Grain Growers Association, United Farmers of Alberta and United Farmers of Manitoba. They adopted some of the organizing tactics of trade unions and set up a delegate structure. Each year thousands of farmers would gather at the Pool conventions to debate farm policy and decide on a plan of action for the upcoming year. The Saskatchewan Wheat Pool was the first of the three established, set up in August, 1923. By 1926-27, the Pool grain elevators were handling more than 90 million bushels of wheat - more than any other grain operation in the world. By 1929, the Pool had built or bought 970 elevators across Saskatchewan.

During the 1930s, prairie farmers were devastated by the Great Depression. Thousands lost their farms and fled the Prairies, reversing three decades of steady population and farm growth. The Pools emerged battered but still functioning and over the next 40 years were to serve as important prairie institutions. The wooden Pool elevators became a symbol of prairie farming not just in Canada but around the world.

However, the decline in farm population that started during the 1930s was never reversed. Technological advancements made operating farms much more efficient but also more costly. The machinery and chemical costs needed for a modern farm operation reached the tens and then hundreds of thousands of dollars while grain prices stagnated. The elimination of the Crow benefit rail subsidy in 1995 also put increased pressure on the ability for family farms to continue to operate.

In 1996, the Saskatchewan Wheat Pool (SWP), arguably the most successful farm co-operative in North America, began a new existence as a publicly traded company. Farmers who had built the institution watched in dismay as schemes to diversify away from grain handling drove the company to the brink of bankruptcy and led to a restructuring under which the American grain multinational Cargill entered into a "strategic partnership" with SWP.

The transformation of the Saskatchewan Pool put tremendous pressure on the Manitoba and Alberta Pools. In 1998, they merged to form Agricore and, within a year, had merged with another Canadian grain company to become Agricore United. The company they merged with, United Grain Growers, already had a "strategic partnership" with the American grain multinational ADM, which expanded with the merger. ADM currently owns over 1/3 of Agricore United, and its share in the company is expected to grow to 49 per cent over the next five years.

In other words, within a decade, the co-operative grain handling system on the Prairies has been transformed from one of farmer control to one in which substantial control now rests in the hands of two U.S. multinationals.