We’re being told that wheat is legal now … ? To celebrate the Greatest Grain, Team Advantage dives into Alberta’s agrarian history, including the “clearing” of the plains, anti-capitalist ideas and agrarian radicalism, the history of the Canadian Wheat Board, Soviets stealing grain from America, the reorganization of rural life as Alberta discovers oil, and why the free market sucks.
Transcript after the break (special thanks to Isaac for transcribing):
[footsteps, car door opens and closes, music begins]
Song: Grain farmers of the West, it’s time for you to make a stand/
Against the tide of evil that is sweeping ‘cross our land/
The bandits down in Ottawa have saddled up their horse/
They’re coming, boys, at harvest-time, to mess with our wheat board
[intro music begins]
Intro: The Alberta Advantage is a bi-monthly political commentary podcast that offers analysis on Calgarian and Albertan politics from a left-wing perspective.
[intro music ends]
Kate: Hello, and welcome to another episode of The Alberta Advantage. I’m your host, Kate Jacobson, and today I have kidnapped several other Team Advantage members and forced them each to read, like, a dozen books about wheat so we could bring you this episode about the greatest grain of all: wheat. Joining me today are:
Kate: And we are going to be chatting today about agricultural development on the Prairies, cooperative marketing, agrarian radicalism, and a whole bunch of other topics that we are going to get right into. So let’s dive in. Who’s excited to talk about wheat?
Steven: I am, yeah, absolutely. There’s some —
Elaine: Who wouldn’t be excited? I don’t understand —
Karen: Yeah, I understand that it’s just been legalized, so —
Steven: None of us have guns to our heads. Kate’s just placed the gun on the counter.
Kate: To start off with, while we are going to be spending this episode talking about agrarian populism and radicalism on the prairies, and the many aspects of these things that we find really, really inspiring and admirable, I think it’s also important to realize that there are absolutely aspects of agrarian radicalism that have no place in any kind of future society. Some of the most obvious of those are, like, the role that the farm movement played in colonialism, the racism and sexism of it. However, like, the purpose of looking at this stuff is not to, kind of, nostalgically pine for something in the past, but to sort of look at what is the history of the place that we currently live in and illuminate those aspects that can inform our politics as left-wing people who live on the Prairies today. To start off with, when we talk about agriculture on the Prairies, it’s really important to understand the way that land was actually divided up in Canada. So, in many countries where the peasantry — for lack of a better term — is kind of a large constituent part of radical movements, it’s because of the prevalence of really, really large landowners that extract high rents from agrarian tenants. And that’s really common in a lot of countries. In Canada, however, and in most other settler colonial nations, this isn’t the case, and most farmers are actually independent commodity producers, and in the Prairies in particular, where we live, this is because of what a lot of scholars call the “clearing of the plains” or the “genocide-enforced dispossession of Indigenous peoples.”
Steven: By “the clearing of the plains,” what we’re talking about, obviously, are the extermination of buffalo herds, the infectious outbreaks that decimated the local Cree population —
Kate: Yeah, so a good way to kind of understand this is very contrary to the way it’s often described in a lot of Canadian historiography and media, is this sort of accidental murder of the buffalo by Europeans who didn’t really know what they were doing. That’s just absolutely not true. It’s much better understood as a process of state-imposed starvation via the destruction of the buffalo. So that’s straight-up, just, kind of, hunting of bison. But then, also, a lot of bison were killed because of susceptibility to new pathogens that were carried by cattle-farming settlers.
Steven: Yeah, like these cows are coming in from Europe, are bringing in bovine tuberculosis, and basically, like, also decimating the buffalo herds, the source of food for the Indigenous population, which then led to them being malnourished, and then led to disease outbreaks among the population itself.
Kate: Yeah, and the best way we know about this was, like, a deliberate process of genocide by the Canadian government, and not just, sort of, an accident of, like, disease outbreaks and overhunting. Is that the determinant factor of, like, Indigenous population levels was reliance on government assistance So the more reliant people were on government assistance, the more likely they were to die. And that’s because the government deliberately underfunded these programs, refused to distribute rations, refused to inoculate Indigenous people against disease that there were vaccines for. So it was very, very much, like, a deliberate policy.
Elaine: And that’s why, then, when it’s framed in current academia, or even when you’re going through public education, there’s this language that never mentions genocide or, you know — they just kind of say stuff like, “We showed up and the plains were there,” you know? They don’t want to acknowledge that there is any kind of responsibility that the government needs to, you know, make amends for or give reparations or anything like that.
Steven: Instead, we get lots of statues of dead Mounties and stuff.
Elaine: Yeah, exactly.
Kate: Fuck the Mounties.
Kate: Yeah, and as Elaine mentioned there, the federal government has obligations, and a lot of those obligations were formalized under the treaty system. So most of the Prairies — which is Alberta, Saskatchewan, and Manitoba — are treaty territories. So we’re Treaty 7 territory here in Calgary, Edmonton is Treaty 6, for example. And treaty was seen, at the time, by Indigenous nations, as kind of a bridge to a future without bison after the destruction over the 19th century of bison herds. And it was meant as a transition towards farming, which is a very capital-intensive process to kind of start doing because of the need for equipment and things like that. Of course, as we know, Canada never really intended to honour the treaty it made with any of the other nations, and it was basically a way of clearing the plains for majority-white settlers. So this impacted early settlement patterns in the Prairies quite a lot. A lot of people who settled on the Prairies early were from European nations, and they were attracted here by the promise of free or cheap land. So the Canadian government had an active practice of marketing settling on the Prairies to poor people in Europe.
Steven: The majority of settlements came to establish farmsteads which would grow cereal crops primarily, obviously wheat, at this time.
Kate: Opening the plains to a more intensive European style of agriculture in the late 19th century also brought a huge amount o f grain into the world market which actually depressed the prices that you could get for grain, and it disrupted European peasant agriculture, which, in its turn, led to another wave of immigration to the Prairies. So it’s a very, very cyclical process.
Steven: Yeah. Western Canada was actually significantly impacting global grain markets.
Karen: Yeah. So, also the increasing population agitated for provincial status for Alberta and Saskatchewan, and they were both created in 1905. But the federal government still retained resource rights, which other provinces had from the start.
Elaine: John A. MacDonald implement the national policy which, in one form or another, would guide Canadian economic development until the 1950s, when Canada pursued North American economic integration.
Kate: This national policy was basically a system of high tariffs, and it was meant to protect manufacturers in Central Canada from US competition, and then newly-acquired, in a lot of air quotes, territories in Canada would basically be settled as economic hinterlands to provide raw materials in order to expand Canadian industry. And that was the formal policy of the federal Canadian government. So this way that Alberta and Saskatchewan were not given resource rights that other provinces had from the start was part of the national policy and a way of keeping the West as a source of raw materials. And it was really, really highly resented on the Prairies, who — fun fact — regularly voted for the free trade-oriented Liberals. I mean, they both just absolutely suck ass, but it’s very funny to think of the Prairies, a Liberal stronghold.
Elaine: Isn’t it, yeah. Only in 1930 did the federal government hand over resource rights, during the middle of a punishing Depression, when provinces had little money to spend on industrial development.
Kate: So this locked the Prairies provinces in really heavily farm-based economies and into agrarian patterns of development. And this is something that Alberta and Saskatchewan in particular, and, to a lesser extent, Manitoba, didn’t really transition out of until the last quarter of the twentieth century. So I think that’s very important to understand, that our images of Alberta and Saskatchewan and Manitoba as farm places, and as the Prairies, as somewhere that is devoted to farming, is very much the result of deliberate government policy first with the clearing of the plains, and then with this national policy that prioritized manufacturing in Central Canada. So because of the aforementioned clearing of the plains, most settlers in the Prairies were given free or extremely cheap land, and therefore functioned as independent commodity producers. This gives farmers in the Prairies a very particular relationship to capitalism and led to the emergence of what many people agrarian consciousness, as opposed to your more traditionally Marxist conception of class consciousness.
Steven: This massive new class of people — well, massive new group of people — from all across the world is now populating the Prairies.
Kate: Because of this access to the land being free and cheap, they’re kind of temporarily immune from the process by which the petit bourgeoisie — by which we mean, sort of, small business owners or people who own small amounts of land or property or the means of productions, that kind of thing — those people are traditionally rendered kind of subordinate to capitalism as a system. But that’s not what happens in the Prairies. These independent commodity producers become a very large constituent part of the prairie economy.
Steven: And it’s this, yeah — the enduring idea that owning land is the one bit of independence that you have from capitalism, like that one line from O Brother Where Art Thou where it’s like, “You ain’t no man at all unless you own land.” Like, the prisoner’s talking about his dreams to own land one day.
Elaine: Kind of an insidious ideology, actually, because it convinces you that, first of all, the petit bourgeoisie is totally framed in capitalism as the ultimate goal and, you know, the ultimate bootstrapper or whatever. It’s insidious because it really frames yourself as the worker and the landowner without realizing that you actually are still perpetuating this ideology that is going to impact you negatively in the future, most certainly.
Kate: Now, and particularly in the early 20th century, the independence of farmers from capitalist relations is completely illusory. Like, farmers are absolutely subject to market relations, to large fluctuations in their income based on speculation on the grain exchange, things like that. So this kind of agrarian consciousness, one of the interesting things about it is it emphasizes the common interests of agrarian producers; so, your interest as a farmer with other farmers. But it also emphasizes the difference of the agrarian producer from all other producers. And by that, it basically kind of fails to comprehend, like, the essential class position of being a farmer in the Prairies at that time.
Steven: They were certainly victims of, like, private capital, the farmers. I mean, as we saw with, like, the operation of the private railroads, and these little local monopolies that would be set up originally under these privately-owned grain elevators.
Kate: So there’s private railroads at the time, and there’s private grain elevators. And these often lead to spectacular failures for farmers. In 1901 in rural Saskatchewan, there is quite a famous incident where half of this bumper crop of wheat is just completely lost because the private railroad and elevator companies, just, fail to ship it out before winter sets in. And that really built resentment among farmers against, like, private monopoly control of the movement of grain. And also, for what it’s worth, farmers burned down grain elevators and —
Kate: — tore up tracks of the CPR main line when they found out.
Steven: That’s praxis!
Elaine: Yeah, that’s good.
Kate: Farmers, go off!
Steven: Yeah, this seems to be where the radical history of wheat kinda kicks in, where the farmers really find themselves clashing with these, like, local Mussolinis who own the grain elevators, who just won’t let them, who will basically make them lose their crops or not move their grain at their discretion.
Kate: Yeah, they’re basically, like, completely held ransom to these private companies. And also, private companies that have complete, like, perfect control, right? It’s not like the perfect ideals of a free market where, like, “Oh, I’ll just take my grain to the other railroad company.” It’s like, there is no other railroad company. There is no other grain elevator.
Elaine: They’re hostages to this —
Steven: But because they’re —
Elaine: —this system.
Steven: —also owners of their own, they have class solidarity, essentially.
Kate: Yeah, so — and that’s what really leads to, kind of, the emergence of anti-capitalist ideas in agrarian society is, basically, dealing with these private monopolies when it comes to moving grain.
Steven: So they burned down some elevators and tore up some CPR tracks.
Kate: But despite this kind of emergence of early anti-capitalism, farmers didn’t like the idea of nationalizing land. Whenever that idea comes up in discourse of the time, farmers and farmers’ movements are often very against this, and they thought that, by nationalizing land, they would move into being, basically, workers or employees of the state. I think it’s interesting because it sort of show this understanding that they were not workers and they did not have a worker’s exact relationship with capital. And in Alberta, for example, the farmers basically really, really resist any kind of permanent identification with labour. Like, they’re often uneasy bedfellows with labour for key demands, but they sort of resist being permanently lumped in with them as a group of people.
Steven: Oddly, yeah.
Elaine: It’s such a peculiar, paradoxical existence, Because they need that support from Labour in order to ensure basic standards of working and living and stuff like that, but they still don’t want to give up their land in order to get that.
Steven: They don’t see themselves as workers.
Elaine: Yeah, exactly.
Kate: Yeah. Well, that mistaken consciousness is basically necessary to survive under capitalism, right? It’s a consciousness that is accurate enough that it gives farmers some cohesion in resisting the pressure of capital and thereby providing them some defense to mitigate the very weakness that the consciousness entails. It’s also important to point out that, when we talk about the agrarian movement or agrarian consciousness, it’s not like a completely solid idea. And we’ve said that farmers in Alberta, for example, resisted any permanent identification with Labour, but radicals in the farm movement actually describe farmers as agrarian workers, and they did not describe themselves as farmers. So you can see that there’s very much an internal discourse within agrarian radicalism and agrarian democracy on the Prairies.
Karen: So you basically have two sides: you have gradualist liberal development that’s designed to solve specific problems vs. class-conscious radicals who were believing that farmers would never be secure until their economic enemies were broken.
Kate: And you see how that would lead to two really different types of politics, right? Because if you’re a class-conscious radical who’s involved in the farmers’ movement, then you’re going to have this natural alliance with labour, because you’re going to have the same enemies, and that is private monopoly control of industry and of infrastructure. But if you’re like, “Oh, you know, this is kind of like a lobby group that is meant to solve really specific problems that only impact farmers, so maybe we can move our grain a little bit faster or have a little bit better of a docking procedure,” then you’re not going to have that natural alliance with workers because you don’t see yourself as occupying the same class position that they do.
Karen: Yeah, it’s just solidarity. That’s the concept.
Steven: Those elitist farmers, eh? Just not associating with —
Karen: They were not in solidarity with anyone else.
Steven: — those lowly labourers. Such elitist from —
Kate: But some people were. And it’s very interesting to me, especially when you think about the space farmers occupy in our contemporary imagination of the space; like, rural Alberta identifies in our contemporary imagination. And then to think about radical farmers being like, “No, we’re agrarian workers, and we see ourselves as occupying the same class position as people who work in factories in Regina and in Winnipeg, and that is why we’re going to stand in solidarity with them.” I think that’s very interesting, and I think that’s something that is glossed over a lot when we talk about the Prairies.
Elaine: Absolutely. It’s the complete antithesis of what imagine in my head as a farmer, or the ideology that a farmer would have, or something like that.
Kate: Yeah, and then the fact that we associate farmers and rural areas with that is absolutely, I think, a project of capital and a project of neoliberalism, and also the result of mass changes and material conditions in the Prairies.
Steven: The fake nostalgia over the traditional family farm.
Kate: Yeah, and what’s really interesting about that is that, at the time, farmers would often say, like, “We recognize the family farm, but that is not the ideal mode of agricultural production.” In the farming section of the Regina Manifesto, which is the policy document that the CCF released in 1933, that’s literally what it says. They’re like, “We want to move beyond the family farm to truly cooperative agricultural development.” So that kind of fetishization of the family farm just doesn’t really exist, discourse-wise.
Elaine: That’s very, very interesting.
Steven: It is a neo-liberal project, you’re right.
Kate: So wheat on the Prairies, as we’ve mentioned, was originally transported exclusively by the private market. And this was really unpopular among local grain-growers for many reasons that we’ve previously identified; primarily that early elevator operators really quickly formed monopolies on the Prairies.
Steven: Well, toward the end of the 19th century, rail companies, too, were also refusing to allow grain-loading from anything but the elevators, possibly in service of these local monopolies?
Kate: Previously, farmers would hand-load railroad cars, so it’s 1300 bushels per car, and you basically dump in bushel bags. But, obviously, it’s —
Karen: That sounds awful!
Elaine: Yeah, terrible.
Kate: —obviously, it’s very inefficient, and, honestly, it sounds like it just sucks. The problem with the elevators, as Steven correctly identified, is that they basically left farmers at the mercy of elevator owners who had a monopoly unloading grain for shipment.
Karen: So farmers pressured both Manitoba and federal government to regulate the power of elevator owners, but legislation passed that was fairly toothless, so it didn’t really work.
Steven: Surprising, yeah.
Karen: Yeah, weird.
Kate: I can’t believe you can’t legislate your way out of problems with the power dynamics of modern capitalism!
Kate: Food for thought, everyone.
Elaine: Farmers responded by creating the Territorial Grain Growers’ Association in 1902 as a lobby group. That year, they managed to get a railroad agent charged for failing to follow the existing laws around grain handling, and the court convicted him with a fine of fifty dollars!
Kate: Honestly, that was probably a lot of money to him.
Steven: Yeah, like a grand back then.
Karen: Just terrifying.
Kate: Apparently it was a big victory for the farmers, because this victory in getting a railroad agent convicted with a fine of fifty dollars spurred them to found the Manitoba Grain Growers’ Association in 1903, and this group actually ends up investigating the Winnipeg Grain Exchange and recommending that farmers create a cooperative grain-marketing body to participate in the Grain Exchange.
Steven: So they start doing politics, basically, and got a major victory by getting that ticket agent.
Kate: And so this grain-growers’ grain company, founded in 1906, they buy a seat on the Exchange. And what happens next is very interesting to me because it sort of represents to me how you can’t ever play by capitalism’s rules, they will always find a way to fuck you over. And the Winnipeg Grain Exchange does find a way to fuck the farmers over. They’re very hostile to the grain growers’ grain company, and they use the excuse that the cooperative principle of paying patronage dividends was tantamount to rebating part of the commision, and it violated the Exchange bylaws. That’s kind of a lot of technical gobbledy-gook, but the important part is they basically found a bunch of made-up crap in the bylaws and were like, “You cannot do this. So fuck off. No being a cooperative company in the Grain Exchange.” And the Exchange actually suspended the farmers’ seats.
Steven: Yeah, just booted them out. “Get out of here” after that.
Elaine: You’re so right, Kate, that you just can’t play by their rules, right? They’re setting you up to lose.
Steven: And they learn that lesson, apparently. I mean, farmers across the prairies start setting up organizations to defend their interests after the success in Manitoba, and probably what they learned in their fight with the Winnipeg Grain Exchange.
Kate: Yeah, and in the end, the Exchange does relent, mostly because the farmers pressure the government to threaten them with special legislation.
Karen: So in 1912, the federal government passes the Canada Grain Act, which reformed the grain trade, established a board of commissioners, and set regulatory standards.
Kate: But then the First World War happens. War breaks out in 1914, and wheat prices go through the roof because of the conditions of war. This makes farmers very happy because they’re making more money, but it also caused a lot of concern for the federal government who wants to protect consumers from high bread prices, as well as supply wheat to the war effort. You’ve got this patriotic, nationalist jingoism at the time. In 1915, the government starts intervening in the market. By 1917, the government actually suspends all market trading of grain, and they create the board of grain supervisors, which was given the power to fix prices but not the power to buy or to sell.
Steven: By 1918, the board’s given power to control all grain marketing, becoming the sole grain purchaser and seller of grain in Canada.
Kate: The war ends, of course, in 1918, but this board, which was actually called the Canadian Wheat Board, it is the precursor of the Canadian Wheat Board that existed until the Harper government sold it off.
Elaine: The one we all know and love.
Kate: The wheat board that you, dear listener, know and love.
Elaine: Bringing out the classics.
Steven: The same Wheat Board that was sold to a hostile foreign Saudi company? That’s now threatening us with it? That Wheat Board?
Kate: It would be that one. But the one that was created in 1918 is a precursor to it. The war ends the same year it’s created, but the Board actually continues into 1919. It secures really, really good prices for farmers, which actually convinces a lot of skeptics in the government and the business community, and also among farmers, of the power of this centralized, single-desk marketing of grain. However, the reason this first iteration of the Wheat Board fails is that the governments just did not want to stay in the grain business. They wind down the Board in 1920.
Elaine: Post-war wheat prices also quickly fell, and the farmers felt that having a Board would have protected them from this, which I would say, yeah.
Kate: But farmers really weren’t happy with the government getting out of the grain business. They had seen a lot of success with this first version of the Canadian Wheat Board, and they were not very happy to give it up. So the first Wheat Board basically collapses soon after it starts, mostly because the government has no real interest in staying in the grain business. But post-WW1 wheat prices fell very quickly, and the farmers felt, as Elaine mentioned, that some kind of cooperative mechanism would have protected them from this. By the early 1920s, however, it was pretty clear that the government had no interest in bringing back the Wheat Board, so farmers in the prairies decided to create voluntary organizations known as wheat pools.
Elaine: A wheat pool was a farmer-owned cooperative venture that sold wheat on behalf of its members in order to break the power of the for-profit companies that dominated the grain train at the time.
Karen: Wheat pools also own networks of elevators, rolling stocks, doors, other facilities and equipment, making them join businesses that weren’t privately owned. Pretty unique.
Kate: So, one of the interesting things with the way that the wheat pool was able to break the power of these for-profit companies is that major private companies on the market made their profits, not on commissions by transaction, but by trading on their own accounts. So they would depend on the spread between the prices at which they bought and sold. So this was theoretically competitive in terms of grain marketing, but farmers were rightly suspicious of the potential for major dealers to organize for profit speculation and for price movements that were unrelated to fundamental market conditions. And so this important American idea of pooling crops and trusting their sale to cooperatively-owned marketing companies was a way of dispensing with open marketing on a grain exchange like the Winnipeg Grain Exchange. And it’s a really clever way of basically completely undercutting any of the power that these private monopolies had.
Steven: Yeah, so basically the idea here is they’re not just pooling the actual grain itself — they’re pooling resources and forming organizations which will then, on an organizational level, lead to political education.
Kate: Yeah, very much so. So they’re pooling the grain, they’re pooling their resources, and they’re also selling, in many cases, directly to export customers. So there’s not this market. People are buying and selling it for the sheer idea of making profit, which removes a lot of price speculation. And the idea for the farmers is that it would reduce fluctuations in income, which was one of the big problems they faced at the time.
Steven: And their collective action actually gave the farmers to actually go and buy out these networks of elevators and stores and facilities.
Karen: So, throughout the 1920s, the pools were enormously successful. The wheat prices weren’t as high as they were during World War 1, but still respectable.
Kate: Yeah, pooling permitted farmers to realize higher average prices and minimize rice fluctuations In addition to improved and more stable prices for grain sold, there was also more farmer control over things like grading and dockage procedures, reduced handling charges. The private monopolies couldn’t nickel-and-dime them for all these little things here and there. And I also think the control aspect is really interesting, because who would know grain better if not the farmers? And I think being able to have control over the way your grain is stored and transported and graded is really, really interesting, and I think shows more long-term political value and utility for these wheat pools. So yeah, it’s a significant early example of regional entrepreneurship on a collective level.
Elaine: Would that be controlling some kind of, I don’t know, means of production or something along those lines? [laughs]
Kate: Hm. Hmm.
Steven: It’s worth noting that the pool was generally a second choice for farmers after the collapse of the first Wheat Board. It wasn’t their ideal. What they wanted was a Wheat Board.
Kate: Yeah, and the reason they wanted the Wheat Board is that the pools were voluntary, and they liked that the WB was mandatory, so it basically afforded farmers even more control. However, the pool was supported by, at the time, ideological liberals who approved the method as a way of making supply and demand more accurately impact the grain market, and also by cooperative purists at the time who were happy that the pool would return profits according to use and not to investment. So from the Left, the critique of the pool instead of having a Wheat Board was that partial cooperatives in industries were only weak and temporary remedies. They basically changed the competitive struggle of individuals in the market to the competitive struggle of groups in the market. So instead of individual farmers competing and trying to sell grain, you had the Wheat Pool competing with private businesses. But they wanted no competition in wheat marketing, period. They wanted there to be planning for use instead of for profit. So for grain, it was the idea that, unless the pool controlled the entire crop, it would not be strong enough to protect farmers.
Karen: Again, you have a left-right split. One opinion is that the state must be used to prevent the minority from weakening the movement, and that would be the left-wing position. And that would be versus a gradual education and growth, which is the right-wing position.
Kate: Yeah, and how this applied to the pools is that the right-wing part of the pool movement, they actually didn’t want the return of the wheat board, and they didn’t want it to become mandatory — they liked this idea of gradually educating people and gradually getting more people on board with the pool system and growing it. But there should always be the option to opt out. Whereas the left-wing position was, like, “No. The state has to intervene, because otherwise the minority is going to critically weaken our movement for control over grains.”
Steven: The Alberta Wheat Pool forced grain elevators into compliance by instructing members to deliver wheat into elevators for storage only, then to send storage receipts to pool headquarters when they had the carload accumulated. The Pool would then order out, leaving elevator companies with only the handling charge of $1.75 a bushel, which is less than the Pool was offering them to act as Pool agents for receiving the wheat.
Kate: Yeah, so the Pool basically blackmailed grain elevators into joining the Alberta Wheat Pool, which I think is good.
Elaine: I agree.
Steven: Beating them into submission, yeah.
Kate: I’m just gonna come out and say it, I think that’s a good use of your time.
Steven: Because the elevator companies were predatory fucking assholes, right?
Elaine: And it sounds like, from what you said, we can’t say this enough — if you’re playing by their own rules, they’re going to win every single time. So you have to take some kind of action that is outside the realm, the structure, that’s already created; create a better structure.
Kate: Exactly. And one of the ways they did that is they sold 80% of grain, that the Alberta Wheat Pool collected, directly to export customers. So they bypassed this Winnipeg Grain Exchange that was hated by grain farmers entirely.
Steven: And it sucked!
Kate: Like, fuck you!
Elaine: So Pool services went beyond crops and included a library circulation of 11,000 books in Saskatchewan, a newspaper, weekly radio broadcasts, university scholarships, technical services, grain-cleaning, variety of test programs, crop research, distribution of farm supplies, political organizations that lobbied for cooperatives, the list goes on and on.
Kate: Yeah, they really went out of their way to embed the wheat pools in the lives of their members beyond simply handling grain.
Steven: Workers’ faculties.
Kate: Yeah, exactly.
Elaine: And that’s just good praxis of how to disseminate ideology into people. You need to start making it — you know, capitalism is infectious in your own lives in ways that you can’t see, so in order to disseminate this ideology to other people, you need to inject it into pretty much every way of your life. Because your life is dominated by it, essentially.
Kate: Exactly. Imagine listening to hockey games on the radio in rural Saskatchewan, but the commentary is being done by a guy from the Saskatchewan Wheat Pool. I’m sorry, it slaps.
Elaine: No, it’s great. I agree. [laughs]
Steven: [laughs] It gets even cooler because leaders in the pools had a vanguard conception of their role. They took it on as a personal responsibility for preventing conservatism from creeping into this cooperative movement. They were protectors.
Kate: Exactly. They saw a very educational role for leadership in the cooperative movement. And I think that’s interesting because it shows that they were completely aware of the challenges of conservatism creeping its way into the cooperative movement.
Steven: They built a socialist institution that came to be culturally important on the Prairies for quite some time.
Karen: Yeah, and they were encouraging people to start new consumer cooperatives and marketing pools and purchasing associations, so it was just the beginning of what they saw.
Kate: Yeah, the Alberta and Saskatchewan Wheat Pools would actually hire people to run educational meeting for pool members, and they would do formal political education that way, which I think is —
Kate: — extremely cool.
Steven: Very good.
Kate: Yeah! One of the things one of the folks who was doing it said was, “As the state assumes a greater control of business, it must, in turn, arrange facilities for the extension of control by the people. This is the only assurance we have for equity, justice, and security. It is cooperation.” And I think that slaps!
Steven: That does slap.
Elaine: I agree.
Kate: So one of the other reasons I think that the pools are such a great example of socialist praxis is also that they were democratic institutions. So Steven mentioned earlier that the Alberta Wheat Pool had control over 50% of the wheat acreage in Alberta, yet it was still a democratic institution. They elected delegates who would make decisions. So this is a completely democratically-run organization. I think that’s incredible when you think about the scale of equipment and agriculture and land and grain they are moving, to have that being run by people who are voting from the bottom up, is amazing.
Steven: And impacting worldwide markets while they do it.
Elaine: The success of the wheat pools and the resources they acquired encouraged them to expand the cooperative movement in the Prairies.
Kate: And this was really enforced on the Prairies by the experience of the Depression, and people had to rely very heavily on one another during the Depression because the markets were just failing on such a catastrophic level.
Karen: So retail co-ops provide guaranteed buyers for producers’ co-ops that often faced being shut out by traditional retailers. Retail co-ops also ensure that communities received goods they needed if private businesses didn’t think that it was profitable to open up shop.
Kate: The wheat pools were so successful and so emblematic that other cooperatives could point to them and say, “Look how successful this is, look at how large it is, how well run it is, and how it is giving back to the communities and the people who need it the most. Why can’t we do that in our lumber mill, in our jam factory, in our flour mill, in our meat plant?” So it was hugely inspiring to the rest of the cooperative movement that existed on the Prairies, which I think is super cool.
Karen: October 1929. Wall Street crashes and the commodity crisis downwards. At this point, creditors tried to force wheat pools to sell their wheat in storage, which should have been a big loss for the Pools, but the Prairie provincial government stepped in and bought out the bank debts.
Kate: Yeah, so provincial loans are basically what keep the wheat pools from collapsing during the Depression, and the pools later actually repay the debt.
Steven: They hand onto their storage, hoping for prices to rebound over this time, but by late 1930s, it was at 50 cents, and the expectation was 1931 would be 35 cents.
Kate: And the pools actually have to begin releasing farmers from their obligation to sell to the pool, so farmers could at least get something for their crops. A lot of farmers, however, still supported the pools, and many felt a compulsory board for everyone would finally fix this problem. Hmm.
Elaine: In 1935, the federal government responded and created the Canadian Wheat Board. Wooo!
Kate: Crowd cheering.
Elaine: Hype! While not initially compulsory, the CWB did offer a price floor that was higher than market prices, so most farmers opted to sell their wheat to the Board.
Kate: And basically what a price floor is is the minimum price you can expect to be paid for your wheat as a farmer, and the CWB one was higher than what they could get on the market.
Elaine: So this meant that throughout the 1930s, and also WW2, the CWB was selling wheat at a loss financed by taxpayers. In 1943, the CWB became compulsory, and in 1949, barley and oats were also pulled under its control.
Karen: That’s a shoutout for the barley and oats fans in our audience who are just like, “All this wheat — I don’t know, man.”
Steven: Yeah, stay tuned for the barley episode.
Kate: Who are, like, “The greatest grain of all, wheat? Fuck off.”
Steven: We’re the cereal crops podcast. This is us now. The wheat pools themselves did remain at this time, we should say. They were no longer responsible for the sales; instead, they were specializing more in things like elevators and farm services.
Kate: Yeah. So the CWB being created is very much due to the incredible organization and agitation of farmers on the Prairies. Farmers really, really wanted a single compulsory marketing board. In 1930, 1500 farmers stormed the legislature in Regina demanding a mandatory Wheat Board. So the Wheat Board becomes mandatory in 1943, during WW2, and stays that way after the war and until it is sold off by the Harper government. After WW2, Canada and the US actually had an entente with one another where they would basically fix world grain prices and avoid competition with each other. However, thanks to improving technology that meant you could get higher wheat yields per acreage, both countries were dealing with increasing surpluses of wheat that were very, very difficult to get rid of, and in 1964, the US abandoned the agreement and they subsidized the cost of its grain sold abroad, basically just so they could grab their market share. And this was really not good for the CWB; they saw their market share fall from about 25% to 17% by 1968. So the share of all wheat being sold that is Canadian wheat is falling. Now we’re going to move into one of my favourite incidents in world grain history: the story of how the Soviets used the free market to fuck with America.
Elaine: Top five grain stories, for sure.
Kate: For a little bit of a primer on it, it’s basically an incident called “The Great Grain Robbery,” and it’s called “The Great Grain Robbery” because the Soviets purchasing all of this wheat causes American food prices to go up. And it causes American food prices to go up, not only because the price of things like bread, that are kind of a direct result of wheat, go up, but also because one of the biggest costs for livestock is actually feed, which is one of the prime uses of cereal crops. And what happens is, literally, the Soviet Union was flush with hard cash at the time because of the way oil is working in the world market, uses a lot of that hard cash to basically just buy all of the wheat in America.
Steven: In “Amber Waves of Grain,” James Trager writes, “However efficient US agriculture may be, and whatever that efficiency may owe to a competitive free-enterprise economy, it was the free market system that allowed Russian purchasing agents to buy so much US grain without having Amercans find out about it.”
Kate: Yeah. So, basically, because the Soviets are making deals with all these individual American firms, they’re able to just keep purchasing it, and the Americans just keep selling it to them.
Steven: Without knowing it’s them.
Kate: Yeah, whereas in Canada, for example — the Soviets also purchased a lot of wheat from Canada this year, but because there’s this mandatory single desk, they were like, “Okay, we will sell you this much wheat.” And the Soviets were like, “Can we have more?” And they were like, “No. That is the amount of wheat we are selling you.” But in America, they just kept buying it. Imagining the Soviets at that time — they were probably like, “Hey, the Americans just keep selling us all this wheat.”
Elaine: It’s such a subtly passive-aggressive way to fuck with somebody. It gives me so much respect.
Kate: It’s great because it’s, like, “Oh, you like markets so much? You think markets are the most efficient way to allocate goods and services?”
Elaine: “I’ll show you! How do you like your markets now, United States?”
Steven: They weren’t doing this purely out of spite, though, we should mention. It’s wheat.
Karen: I assume they needed to feed —
Kate: There was also massive crop failure in the Soviet Union that year, which is why they were doing it. But it is just funny to me because it never would have happened if there wasn’t a free market system. The free market system is the only way the United States was able to be exploited like this, and it’s very funny. And Nixon, who was president at the time, he was actually criticized a lot for this because it led to a spike in American food prices. That’s one of the things that people who are not normally political notice the most; if you go the grocery store and, all of a sudden, chicken is more expensive, beef is more expensive, bread is more expensive, you’re really going to notice that. The Senate Republican leader, Hugh Scott, actually said at the time that this attack on President Nixon was spurred by people associated with the Canadian Wheat Board. This guy is playing, like, 12-dimensional chess.
Elaine: *laughs* Oh my god.
Steven: In the end, the Canadian Wheat Board actually warned the US Department of Agriculture about the amount of wheat the Soviet Union was purchasing before there was any spike in food prices as a result of increased wheat exports at high prices.
Kate: The Canadians literally noticed this was happening because of the single desk and they were like, “Hello, America. You may have noticed the Soviets are buying a ton of wheat.” And the Americans were like, “No. Our free market system always allocates goods and resources perfectly. I don’t know what you could be talking about.”
Elaine: “Invisible hand, invisible hand. Goodbye, Canada.”
Kate: The Canadian Wheat Board also kept the price it sold wheat as as a secret, which really, really annoyed the United States because Canada kept selling millions and millions of tons of wheat to the USSR, but the State Department didn’t have any way of knowing how much the Soviets paid for it, so they basically had no idea at any given time if they were being fleeced or not by the market.
Karen: As the single largest seller of wheat in the world, the CWB had significant power to shift markets. In August of 1976, the CWB determined that there was going to be a bumper crop of wheat in North America, which would mean problems for selling all of Canada’s harvest.
Kate: And the reason for that is that wheat is normally a buyer’s market. On the global market, there is a surplus of wheat that is produced in general, so sellers have to compete for buyers instead of the opposite way around.
Steven: So they anticipated it and then, while wheat futures were still strong, knowing that the drop in prices was going to happen, the CWB secretly approaches private traders and offers them Canadian wheat at a substantial discount to the current prices.
Kate: Basically, the spot market for grain collapses abruptly because traders stop buying US wheat and they start trying to sell Canadian wheat because of the Canadians offering a substantial discount in order to capture their share of the market.
Elaine: It was several weeks before the US Department of Agriculture noticed what was going on as they notice Canadian wheat being sold to Indonesia. The USDA contacted the CWB complaining that this would lead to “unnecessarily weakening of the general level of world wheat prices.”
Kate: But when the Americans tried to find out what prices the CWB was selling at, the response was, “We’re not telling you that. Stop interfering with our business.”
Steven: “Go away.” *laughs*
Karen: Yeah. So, in fact, Canadain wheat was now being purchased by American millers just as the US crop was being harvested, and that infuriated the US government, who were curtly told by Ottawa that there were no limits on the destination of Canadian wheat. And that’s quite a mood as well.
Kate: So, because the US had no central control over its wheat marketing, the Secretary of Agriculture actually had to admit there was nothing he could do to stop the CWB from cutting prices to grab market share from US farmers. Today, we typically don’t think of farmers as a particularly radical group, and that, in many ways, can probably be chalked up to the fact that we’ve seen a really radical reorientation of rural life in Alberta, in Saskatchewan, and in Manitoba throughout the latter part of the 20th century and the first decade of the 21st century.
Steven: In the first decade of the 21st century, Alberta — and Saskatchewan, to a lesser extent — are in the midst of these huge economic booms driven by soaring oil and gas prices. These booms are driving hundreds of thousands of Canadians to Alberta, similar to what occurred a century earlier. Since the discovery of oil at Leduc, Alberta’s political, cultural landscape changes forever.
Karen: Oil extraction is seen as the key to ending Alberta’s dependence on agriculture and bringing industrialization and urbanization. And the current results are pretty clear to see — even in Alberta, which is still dependent on world commodity prices.
Kate: Yeah, so think about the fact that, in 1941, 48% of Albertans lived on a farm. In 2001, 6% of Albertans lived on a farm. So that is a radical re-orienting of Ablerta’s demographics away from farms and towards cities.
Steven: Yeah, as we’ve touched on, it creates a whole new middle professional urban class.
Kate: Yeah, and Alberta has also gone from being an economic hinterland by design of John A. MacDonald’s national policy to, like — Aberta competes with Ontario as an economic engine for Canada. It is absolutely in no way an economic hinterland of Canada, in any way.
Elaine: Besides the population growth, urbanization and industrialization have made it so that rural areas are experiencing major depopulation.
Kate: And rural life has been also really reorganized. Like, what remains of it has been reorganized dramatically according to the needs of international agri-businesses. So this family farm is not really considered to be a viable way of life in terms of real life any longer, so there’s much more corporate farming, contract farming, intensive livestock operations, things like that. Farm cooperatives, like the Alberta Wheat Pool — those were replaced by Agricore United. Which, honestly — do you even need me to tell you anything about that? They’re clearly evil.
Elaine: Neoliberal globalization meant the dismantling of traditional protections on rural economies as well as exposing the entire prairie economy to the international market instead of being captive to central Canada.
Kate: So, yeah. There’s been a huge political shift on the Prairies. Agriculture is no longer seen as the defining characteristic of the Prairie West except in this very reactionary faux-nostalgic way that is weaponized by conservative projects.
Elaine: A hundred percent.
Kate: The pressures on the rural West that we’ve mentioned have made it, in many ways, a very politically reactionary place where it was previously, in many ways, quite progressive.
Elaine: So farming has become a lot more capital-intensive consequently meaning less jobs. Corporate concentration in the agrifood industry has shifted the balance of power away from protecting farmers’ livelihoods, towards treating them as low-cost raw material inputs.
Kate: This illusory power that farmers thought they had, that they owned their land, is completely being revealed to be as hollow as it always was. They’re being treated by international capitalism, as Elaine said, as low-cost raw material inputs into making profit for these giant agri-businesses.
Steven: Yeah. Once exposed to global neoliberal capitalism, that independence that they thought had protected them actually burned them hard and made them vulnerable, and I think that’s part of why the kind of extreme reactionary elements tend to come from these rural, depopulated [inaudible].
Kate: So the Canadian government at every level has really helped facilitate this globalization of Canadian agriculture since about the 1970s. Governments used to support a lot of rural communities through protectionist trade policies as well as through intense infrastructure and service spending when they often couldn’t support the services by themselves, but neoliberalism has just left so many rural communities depopulated and unable to fend for themselves. And this makes rural areas once dependent on farming desperate to attract any kind of investment regardless of how desirable it is. That’s why you see these giant slaughterhouses going up in, like, rural Alberta. And that’s what I think about when I think of rural Alberta now — I think about grain elevators being toppled, I think about giant slaughterhouses going up.
Steven: So it’s almost like our own version of de-industrialization that wreaked havoc on Ontario.
Kate: And the Canadian Wheat Board, that we all know and love and mourn so much. What is the state of it today?
Steven: Sold to a hostile foreign power?
Elaine: Sold to a hostile power by the conservative government.
Kate: By Harper’s conservative government. And, for what it’s worth, against the wishes of Canadian farmers. A plebiscite found that 60% of Canadian farmers wanted to keep the mandatory, single-desk marketing for Canadian grain. You know what the government said to that? They said it was a non-binding vote. Steven Harper, I know you’re listening to our podcast, so fuck you. Basically, how the decline of the Canadian Wheat Board happened is that, in 2012, their monopoly was ended, so farmers didn’t have to sell to the single desk any more, and in 2014 there was actually a bumper crop of wheat, and it was a complete disaster. Grain was literally rotting in fields across the Prairies because it couldn’t be moved. And the reason for that is that the price of oil was quite high at the time, so oil companies who were considerably more powerful than individual, independent commodity producers, were buying up space on the railroads. And this never used to be a problem because, an organization like the CWB, it had the entire share of the market, so it had a lot of purchasing power to be able to get grain to market and to be able to move it around. And individual farmers just did not have that, and they will never have that. That’s one of the reasons an institution like the CWB was so important. It also helped Canada to plan the way things were moved around the country and the way investment and profit was moved around the country. A great example of it is the port of Churchill, which relied a lot on grain being shipped out of the port there, and now that there’s no CWB, there is not grain being shipped out of the port, so it is also being completely fucked over by the end of this.
Steven: A disastrous economic policy.
Kate: Yeah. And now, the Canadian Wheat Board, that was fought for by farmers in Saskatchewan storming the provincial legislature in Regina, is now owned by a subsidiary of Saudi Arabia’s sovereign wealth fund. It’s owned by some fucking capitalists.
Steven: Who, at the time of this recording, I believe is still openly hostile towards us and threatening to use the Wheat Board against us. I wish we had the cool farmers from like a century ago.
Kate: Hey, there are still some extremely cool farmers.
Elaine: Cool farmers. Who are they?
Kate: The National Farmers Union is tight as hell. So, huge shout-out to the National Farmers Union. We love you, and you are the troops to us.
Steven: So, are we done talking about wheat? Can we go now?
Kate: We are absolutely not done talking about wheat. So I have this wonderful book in front of me called “The Western Canadian Farm Trivia Challenge”, which I purchased at the Calgary Reads booksale in May of this year, and which has honestly provided me with hours and hours of fun and enjoyment. So, before each of you can leave, you must answer a question about wheat from “Western Canadian Farm Trivia Challenge”, and if you answer it correctly you can go.
Steven: Karen’s making a move for the gun.
Elaine: Shoot me, shoot me! *laughs*
Kate: Alright, who wants to go first?
Steven: I’ll go first.
Kate: Alright, Steven. Question: in what year did Canada produce a record amount of wheat? A) 1928, B) 1953, C) 1974, or D) 1991.
Steven: I’m gonna say 1990 — or, no, the second last — the 70s, was it?
Kate: 1974. Is that your final answer?
Steven: Yeah, I’m going with that.
Kate: No! The answer is D). In 1991, Canada produced approximately 32 million tons of wheat, or about 1.2 billion bushels, according to Statistics Canada figures.
Steven: That makes sense.
Kate: In recent years, the average production has been just under 24 million tons. You cannot leave this room.
Elaine: You’re being banished to some kind of wheat field.
Kate: Which is a privilege, by the way.
Kate: Alright. Karen, Elaine. Who’s next?
Karen: I guess I’ll go.
Kate: Karen. Question: the Canadian Wheat Board exports wheat and barley throughout the world. Approximately how many countries does the Wheat board market to? A) 25, B) 40, C) 55, or D) 70.
Kate: Karen. That is correct. You may leave.
Karen: Oh, excellent.
Steven: Tell the world my story.
Elaine: I’m jealous.
Elaine: Okay, I’m ready, I’m ready. Go.
Kate: If you took all the wheat that Canada exports in an average year and put it in hopper cars, the line of cars would stretch from Saskatchewan to: A) Regina, B) Winnipeg, C) Thunder Bay, or D), Fredericton.
Elaine: Sorry, it’s Saskatchewan to Regina?
Elaine: Oh, okay. Saskatoon. Okay. Saskatoon to Regina, Winnipeg —
Kate: Thunder Bay, or Fredericton.
Elaine: Thunder Bay.
Steven: Never pick C! I picked C, too!
Kate: According to the Canadian Wheat Board, the line of hopper cars would stretch from Saskatoon to Fredericton, a distance of over 4000 km.
Elaine: That was my second —
Steven: Okay, so the most awesome one’s always going to be the last one! That’s how we’re doing this. Okay.
Kate: Yeah, I know.
Karen: Yeah, it’s the maximum answer that you can have, that’s what I’ve learned.
Steven: This is the “wheat is awesome” trivia. This is bad faith trivia.
Elaine: We’re going to be stuck in wheat limbo forever. *laughs*
Kate: Wrong, because on the back it says “It’s time to have some fun with farming.”
Steven: “How awesome is wheat? Awesome, or so awesome?”
Kate: In an extremely frightening font. Alright, Karen is leaving. Elaine and Steven are stuck with me until they get a question from “Western Canadian Farm Trivia Challenge” correct. But you, dear listener, are also free to go. So, on behalf of us all here at The Alberta Advantage, thank you so much for joining us for this episode about wheat, the greatest grain. See you next one!
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Kate: Hey, everyone. Did you know The Alberta Advantage is on Patreon? We just wanted to give a shoutout to everyone who’s subscribed so far. We have big plans for this podcast. We want to get into some capital-S Serious capital-J Journalism and maybe even invest in some downtown real estate. Check us out at patreon.com/albertaadvantage. We can’t wait to see you there, and thanks for listening!
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