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Canada's Prairie agricultural economy prepares for a seismic shift Add to ...

On the Prairies, the grain elevator was every little whistle-stop’s economic bulwark, and the railway was its lifeline. No one grasped that better than Jim Major, who, as a Saskatchewan Wheat Pool manager in the 1990s, shut down dozens of small wooden elevators across the arid, rolling southwest of the province.

He became a pariah in tiny communities as he delivered the harsh truth – the old terminals on branch railway lines were giving way to more efficient collection points on the main lines. At one town meeting, “I was fairly lucky to get out of there alive,” he says.

He survived, but the incident burns in his memory as his career winds down and the West faces another of its defining moments. This time, it’s not the small-town elevators that are on the chopping block, but an institution that has underpinned the economy of Canada’s breadbasket since the Depression.

A free-market-oriented Conservative government says it will scuttle the Canadian Wheat Board’s monopoly role by August, 2012, closing out 76 years during which it has been the sole marketer for Prairie farmers of two key crops, wheat and barley, selling up to $8-billion of their grain in a good year.

The board has fought back, conducting a plebiscite of 68,000 farmers, the results of which are expected Monday and are likely to show a majority in favour of maintaining the board’s exclusive role. But the Harper government has dismissed the vote as irrelevant to its process, arguing it already won a mandate for change in the federal election, in which the Tories won 51 of 56 seats in the three Prairie provinces.

It means the Prairie agricultural economy is in for a seismic shift, one that will play most heavily in small farm villages like Leader, Sask., that have held on to their precious grain elevators, but now face the transition to an era of open markets and farmers doing their own grain deals. Mr. Major, in fact, is one of the local heroes for helping save one of those endangered terminals on one of those branch lines. “We’ve been through a long, hard fight,” says Mr. Major, 65, who just retired as general manager of community-owned Great Sandhills Terminal Ltd., which operates a big concrete elevator near Leader.

The business, including the 200-kilometre railway that serves it, might have blown away like sand in the dunes in the nearby Great Sandhills desert. Its endurance is the product of community resilience – and, in Mr. Major’s view, the wheat board’s contribution of vital links in its supply chain.

Leader is a microcosm of an emotional debate ripping across the middle of Canada between anti-board forces, who want the freedom to sell their own grain, and supporters.

The debate tends to divide bigger farmers, who yearn to make their own deals, against smaller producers, who prefer the shelter of the board’s marketing role. Some say the board's demise would speed up their exit from the farming business, which has already seen a dramatic shrinkage in numbers.



The big grain-handling companies – particularly Richardson International, Cargill and Viterra Inc. (the former Saskatchewan Wheat Pool) – would benefit from the board’s demise. They could increase the volumes of grain they handle and the efficiency of their network of inland and port terminal and enjoy better access to rail cars, over which the board currently has much control. And the towns that are home to their large inland terminals might feel optimistic. Officials in Thunder Bay, for example, see new hope for its once-mighty, but now diminished lake port, which contains both Richardson and Viterra terminals.

But independent grain facilities and short-line railways appear more vulnerable – with the wheat board no longer there to guarantee their access to rail cars and port facilities – as do the towns that depend on them. The wheat board debate is played out against the broader cultural tension in places like Leader, where earlier generations built co-op institutions, such as credit unions and grain pools – to deal with distance, drought and Depression. Now Saskatchewan is a prosperous province with oil and gas, potash and canola.

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