Photo provided courtesy of the Canadian Wheat Board, Winnipeg, Manitoba.
People might wonder why Canadian farmers continue to grow wheat given global surpluses, low prices, high input costs and transportation problems, .
In fact, grain is very important to the Canadian economy. Annual sales of Canadian grains in the mid 1990s – including wheat, barley, oats, rye, flaxseed, rapeseed and canola – amount to $12 billion.* Grain transport accounts for one quarter of the major railways’ revenue – about 1.5 billion a year. Half of all Canada’s grain and most of Canada’s wheat is exported.** In 1996, Canada exported $8 billion worth of grains and oilseeds. Grain is amongst Canada’s top five industries – ranking with forestry, fishing, mining and automobile manufacturing.
*Willard Z. Estey, Grain Handling and Transportation Review: Final Report, submitted to the Minister of Transport (December 1998), p. 4.
**Colin Carter and Al Loyns, The Federal Government and the Prairie Grain Sector: A Study of Over-Regulation (University of Toronto Press, Toronto; 1998), p. 26.
A Line of Old Country Elevators
University of Manitoba, Archives and Special Collections, Winnipeg Tribune Collection, PC 18/3309/18-2549-008. Gregg Burner Photo.
After the dismal 1979 performance of the grain transportation and handling system, participants within the system started demanding reform. Inflation and mounting government debts tipped the scales in favour of free-market reforms, rather than nationalization of the railways and higher subsidies to the various players.
Reforms were deep. The Canadian grain transportation and handling system has been totally transformed. The old country elevators have been replaced by inland terminals. Branch lines have been abandoned and farmers are trucking grain long-distances to the high-throughput elevators. The old farmers' cooperative elevator companies (the United Grain Growers, and the Manitoba & Alberta Pools) have merged, partnering with their old enemies, the private grain companies.