There be a Dinosaur

Many years ago, at the start of my professional career, I had the opportunity to be the Secretary-Manager of the Stockgrowers Association. The Stockgrowers was a representative organization representing about 8,500 members –  predominately ranchers, cattle breeders, and feedlot operators – in Saskatchewan. The organization based its views and attitudes on self-reliance, free enterprise, and small government. However, there was a real push for government price support, supply management, and production controls at that time. The Stockgrowers understandably were vehemently opposed to this intrusion into their livelihood.

At the same time, grain farmers, government, railways, and grain companies were grappling with the results of an insane, short-sighted policy that forced the railways to haul grain for export from the Prairies to tide-water at fixed prices set in the 19th century. This policy was called the Crow Freight Rate. The Canadian Pacific Railway needed government support to build a line through the treacherous Crow’s Nest Pass in the Rocky Mountains to the coal fields in southeast British Columbia. In exchange for government financial support from the government who wanted to curry favour among western farmers, the CPR agreed to provide reduced rail rates for farmers’ grain shipped east to the Great Lakes and for farm machinery shipped west from central Canada “forever.” This negotiation stands in the hall of fame of short-sightedness.

Although popular with farmers exporting grains, these reduced rates over time were not cost-effective for the railway. The rates provided central Canadian manufacturers and grain exporters with an unfair advantage at the expense of value-added agricultural processing and manufacturing on the prairies. By the early 1980s, the government attempted to resolve the problems between the competing interests by altering the agreement. The government proposed two alternative solutions. One was to pay the subsidy directly to the farmer and allow the railway to charge compensatory rates. This solution would remove the competitive disadvantage for livestock feeding operations, flour mills, and food processors because farmers would have an incentive to sell locally. The second proposed solution would pay a subsidy to the railway and allow them to charge slightly higher rates depending on grain prices. This solution would perpetuate the status quo.

The Stockgrowers and other like-minded commodity farm groups obviously supported the “pay the farmer” solution. We lobbied for this solution through a coalition we formed called the Prairie Farm Commodity Coalition.

Unbelievably, the farmer-owned grain companies, called the Pools, favoured the “pay the railway” solution. The prairie grain pools were formed in the 1930s as farmer-owned Co-ops, to counter the lack of competition and priced gouging inflicted on farmers by the large privately-owned grain consortiums.

The largest of the pools, the Saskatchewan Wheat Pool, was by now a multi-billion dollar enterprise. Between the three prairie pools, they claimed to represent over 150,000 farmers. It became apparent that the pools wanted to protect the status quo not because it was good for the farmer, but rather it was good for the Pool because their entire infrastructure depended on grain exports. So they dictated to their farm members what was good for them.

I was one of the spokesmen for the Prairie Farm Commodity Coalition. The debate over the Crow Freight Rate solution started to heat up. Saskatchewan’s largest daily newspaper, the Regina Leader Post, interviewed me regarding the debate. In the interview, I stated that the Wheat Pools only represented their corporate self-interest, not the interests of farmers or economic development. I was quoted saying, “The Saskatchewan Wheat Pool had become the Dinosaur they were originally formed to defeat.” Well, that was the headline on the front page. As a result of the headline, radio stations all over the province interviewed me.

I received a phone call from E. K. Turner’s assistant summoning me for a meeting with Mr. Turner. E. K. (Ted) Turner was the President of the Saskatchewan Wheat Pool. During his tenure, he turned the Wheat Pool into an economic powerhouse considered one of the best run corporations in the county. So naturally, I accepted his invitation (summons).

A few days later, I was ushered into the executive suite on the top floor of the Saskatchewan Wheat Pool building. While waiting in Mr. Turner’s oak-lined office, I noticed an ornamental statue of a Tyrannosaurus rex on his credenza. Finally, Mr. Turner arrived and sternly shook my hand and thanked me for coming. Before I sat down, I pointed over Mr. Turner’s shoulder at the statue and said, “Ted, Is that the corporate mascot?” At first, he didn’t know was I was talking about. Then, he turned around to look to where I was pointing and suddenly broke into a smile. The enormity of the situation struck him as funny. He quickly regained his composure, and we got down to business.

The Western Grain Act Transportation Act of 1983 allowed shipping rates to increase, but never more than 10% of the world price for grain. In addition, the government made further cash payments to the CPR.

I did not win the argument with Mr. Turner that day, nor were we successful in getting the “pay the farmer” solutions implemented, especially when the Pool aligned themselves with Quebec dairy farmers who wanted to maintain access to cheap western grain. However, I developed a friendship with Ted Turner, and we would talk anytime we saw each other at events. I believe he knew my position was right, but changing the status quo would force the Wheat Pool to change their business model before they were ready to adapt.

With the election of the Liberal government of Jean Chrétien in 1993, the new government took steps to eliminate the subsidies. The prairie pools did adapt by closing the hundreds of local grain elevators favouring large inland terminals and, oddly enough, moved into food processing, livestock feeding, and ethanol production. They eventually became publically traded corporations. Thus, they became what they originally were formed to challenge.

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