Wheat pools in Canada facts for kids
A wheat pool is a co-operative that markets grain (mostly wheat) on behalf of its farmer-members.
In Canada in 1923 and 1924, three wheat pools were created. They were farmer-owned co-operatives, created to break the power of the large for-profit corporations, that had dominated the grain trade in Western Canada since the late 19th Century, and were an early source of Western alienation.
The wheat pools were successful grain traders and marketers from 1923 to 1929. During the Great Depression, however, huge losses forced them out of the grain marketing business. They persisted as grain elevator operators but after 1935 all grain marketing in Canada shifted to a new government agency, Canadian Wheat Board.
During the post-war era, the wheat pools almost completely replaced the private grain companies as elevator operators. By the 1990s, however, most had demutualized (privatized), and several mergers occurred. Now all the former wheat pools are part of the Viterra corporation, which itself was acquired by Glencore Xstrata in 2013.
Contents
Background
Agrarian activism
The pools were the culmination of a long tradition of agrarian activism dating back decades in the Prairie Provinces of Canada which peaked in the 1920s. One notable date was the founding of the Territorial Grain Growers Association (T.G.G.A.) in 1901. The T.G.G.A.'s successor organizations would be important organizers in the later campaigning to organize the wheat pools. The co-operative movement was also being established in Canada at this time.
Farmer grievances
At this time farmers in the Prairie Provinces were deeply alienated from the Canadian political and economic status quo. Farmers accepted as common knowledge that grain companies, railways, banks, and the government were part of a system that sought to exploit and oppress farmers. They developed a class solidarity and a fear and loathing of the ruling elite.
Specifically they despised the private grain trade system as symbolized by Winnipeg Grain Exchange. Farmers suspected the grain traders of being middle men who only profited by leeching off the efforts of farmers without adding any value. They were especially angered by the practice of hedging that private traders used on the futures exchange, which they believed allowed traders to profit from falling markets, hurting farmers. They also believed that private traders artificially held down prices during the fall harvest in order to shortchange producers.
Previous attempts to reform the grain trade
Elevator co-ops
Some attempts had been made to set up co-operative grain elevators. There were many local co-ops that owned a single elevator, but the two most important were the United Grain Growers (U.G.G.) and the Saskatchewan-government backed Saskatchewan Co-operative Elevator Company (Sask. Co-op Elevators). U.G.G. was formed by merger of two smaller co-ops: the Alberta government-backed Alberta Farmers' Co-operative Elevator Company and the Grain Growers Grain Company (G.G.G.C., which had previously acquired the elevators of failed Manitoba government elevator company) in 1917. Following the merger, U.G.G. was a powerful force with 300 elevators and a terminal at the Lakehead. While U.G.G. and Sask. Co-op Elevators were farmer-owned, they did not follow the traditional co-op structure of paying dividends back to the users on a patronage basis (per the amount of business), instead they paid dividends to shareholder-investors. For diehard co-operators this was unacceptable. Furthermore, the two companies were unable to negotiate a merger between themselves and were not involved in marketing grain overseas. They lacked the size or reach to challenge the open-market system.
