It was more than a century ago but bitter conflict between farmers and the early western Canadian grain industry still resonates in the childhood memories of old-timers like Harvey English.
“It was highway robbery. That’s what it was in those days,” says English, 94. “They were just stealing everything off the farmer that they could possibly steal.”
English, whose uncle homesteaded the family farm near Rivers, Manitoba, remembers his father once talking about a producer who delivered a load of wheat to the local elevator and received 88 cents a bushel. A week later, English’s dad took wheat to the same elevator and learned the price was now 44 cents a bushel.
Like other grain growers, he felt at the mercy of grain companies and their take-it-or-leave it attitude.
“Nobody seemed to have any backbone to get out and do something for the farmers at that particular time,” says English, who farmed until 90 and was still out on the combine last fall. “It was terrible.”
Western Canadian farmers, who either applaud or chafe at government regulations in today’s grain sector, can little appreciate what their ancestors experienced in the early days of settlement. The grain trade, if not exactly Wild West, wasn’t far removed. Buying, grading and inspecting grain were largely unregulated, farmers felt exploited and emotions often ran at a boiling point.
The mood among Western grain farmers at the close of the 19th Century was one of “outrage, indignation and frustration,” according to Jim Blanchard, a University of Manitoba librarian and local historian.
“There was no doubt in their minds that the CPR, the grain dealers and the milling companies were formed into a monopoly designed to cheat them,” wrote Blanchard in his 1987 book The History of the Canadian Grain Commission.
“There can be no doubt that there were abuses in Western Canada — this was inevitable in a situation where the railroad and the grain trade held all the cards and the farmer held none.”
The tumultuous days of the early 20th century gave rise to the farm movement and the formation of producer organizations with political clout. But what really made the difference was the eventual response by the federal government to demands by Western farmers for fair treatment.
That response culminated exactly 100 years ago with the passage on April 1, 1912 of the Canada Grain Act — sometimes called the Magna Carta of the Western grain grower — and the creation of what is now the Canadian Grain Commission, a federal agency, to administer it.
It was a watershed in the history of agriculture in Western Canada. In the words of former CGC chief commissioner G.G. Leith: “Then, as now, the Commission’s purpose was to protect farmers’ interests and, through the Canada Grain Act, to provide a legislative framework for a fast-growing grain industry.”
Of course, grievances between Prairie farmers and the grain industry are as old as agriculture in the West. But it’s hard to overstate the anger producers felt in those days at what they saw as unequal treatment by grain companies and the railways. It was, as Blanchard puts it, “a state of undeclared war between the two factions involved in the grain industry.”
Complaints were many but they generally centred around four main ones: prices, dockage, weights and the ability of producers to ship their own rail cars.
There were actually three prices: the “street price” (offered by the elevator on delivery), the “track price” (received after loading a rail car and then selling it), and the “spot price” (the one at the terminal where grain was sold on the world market).
What angered farmers most, according to former University of Manitoba history professor Gerald Friesen in his book The Canadian Prairies: A History, was the spread in prices between street and track prices, probably three to four cents a bushel. Farmers were usually forced to accept street prices because, as Friesen says, “they could not fill a boxcar within a particular variety and grade of grain within the limited time permitted by the rail companies.”
There were other legitimate grievances, as a Royal Commission appointed in 1899 to investigate the industry discovered.
The Commission found that “a vendor of grain is at present subjected to an unfair and excessive dockage for his grain at the time of sale.” It also determined that “doubts exist as to the fairness of the weights allowed or used by the owners of elevators.” Finally, it said elevator companies enjoyed an unfair monopoly “by refusing to permit the erection of flat warehouses where standard elevators are situated” and thus being able “to keep the price of grain below its true market value to their own benefit.”
The only solution was legislation to regulate the industry, “there being no rules laid down for the regulations of the grain trade other than those made by the railway companies and the elevator owners,” the commission’s report concluded.
The result was a federal statute in 1900 titled the Manitoba Grain Act.
The act was well intentioned and pushed all the right buttons. It created the post of Warehouse Commissioner to administer the statute. It established rules for handling grain. It set standards for weights and measures. It required grain-handing facilities to be licensed. And it enshrined in law a grain producer’s right to load and ship his own rail car.
The problem, as farmers learned, was in getting the cars they were legally entitled to. It soon became evident the railways’ practice was to allocate cars to grain companies before granting them to individual farmers.
It wasn’t until 1902 that a landmark court case upheld the right of farmers to access producer cars. Brought by the newly formed Territorial Grain Growers, it accused the station agent at Sintaluta, Saskatchewan of not complying with the law by giving cars out of turn to elevators. The court ruled in favour of the farmers.
The railways may have had to supply producer cars but they didn’t have to like it. Glen Franklin, who farms at Deloraine, Manitoba, says his grandfather once shipped a producer car around 1911 which mysteriously disappeared from the system. Tracked down after more than a year, the car was finally unloaded, Franklin’s grandfather got paid, but he never did receive an explanation.
Did the car vanish on purpose? “It was certainly a possibility, I suppose,” Franklin says.
Part of the problem with continuing inequities lay with the Manitoba Grain Act itself. For one thing, it applied only to “the Inspection District of Manitoba,” since Saskatchewan and Alberta were not yet part of Confederation. By the time those jurisdictions achieved full provincial status in 1905, they were producing more wheat than all of Manitoba, though technically not under the statute.
But a greater problem was that the railways and grain companies, the Sintaluta case notwithstanding, paid little attention to the Act, says James Zastre, a Canadian Grain Commission community relations officer.
“There were these rights that were given to producers under the Manitoba Grain Act but most felt that the grain companies and railways ignored them. Many producers felt they had no voice, they had no organization at the time and most of them probably didn’t even know they were being denied any rights,” Zastre says.
It was a critical period in the history of Western Canada. Although the Liberal government of Wilfred Laurier had a strong interest in settling the West, large chunks of it were still virgin territory. Many immigrants, lured by the promise of cheap land, came from politically oppressed countries and harboured a deep suspicion of elevator companies telling them the grade of their grain. How could you encourage people to come to Canada and homestead in a remote corner of Saskatchewan if you couldn’t guarantee them fair treatment for the crops they grew?
The Canada Grain Act
Worse still, there appeared to be no avenue for complaint. You took a wagonload of grain to an elevator and immediately felt at the agent’s mercy. If you didn’t like his decision, you could take the grain back home. You didn’t know what your rights were because nobody had told you. Communication was sometimes difficult because of cultural differences and a language barrier. The very sociology of the Prairies in those days cried out for a solution.
That solution came in the form of the Canada Grain Act of 1912. It built on its predecessor, the Manitoba Grain Act, only with teeth.
Zastre says the pre-1912 approach to solving problems was piecemeal — single-issue approaches for resolving multi-faceted grievances. Different authorities had different responsibilities. There was no single message to give to producers who felt they were being wronged.
The Canada Grain Act changed that. All matters regarding grain industry regulation were combined under one umbrella.
Now you had a package deal simultaneously looking after a lot of things related to the industry. You also had a federal government telling farmers they had a right to fair treatment under the law. And if you felt you still weren’t being treated fairly, an independent tribunal served as an arbiter.
In short, the Canada Grain Act served two purposes, Zastre says. It provided solutions to problems. And it let people know, through their farm organizations or otherwise, that they had rights backed by the law of the land.
“It was an avenue of communication,” says Zastre. “I don’t say the Commission was out there spreading the word. But there was somebody that people knew they could talk to.”
Adds Doug Langrell, CGC corporate development advisor: “The commission, as a federal organization founded by an act of Parliament, gave a kind of sanction to the rights of farmers in a way that UGG or any of the Pools could not.”
Indirectly, this helped immigration because it drew on the role of government that appealed to people coming to Canada in the first place, says Zastre. It enabled government to say, here are rights you didn’t have back home. Grain companies had less leeway in making decisions because now there was oversight.
Producer car protection
Producer cars were one example. Episodes such as the railway losing Franklin’s grandfather’s producer car were not uncommon. But the Board of Commissioners, as the CGC was originally called, put a stop to that, says Zastre.
The Commission ensured that cars were properly numbered and recorded by an independent body. If producer cars were not distributed the way they were supposed to be, someone was watching and something would happen.
Another change occurred when the government began building inland grain terminals. Facilities at Moose Jaw, Saskatoon and Calgary were constructed soon after 1912. Suddenly, there was less shipping pressure after the harvest season because more grain could be stored on the Prairies. There was less urgency for farmers to sell their grain immediately for fear prices would be lower if they waited.
How did grain companies and other major players accept all this regulation?
Zastre says the industry struggled against some provisions, especially those in the Manitoba Grain Act. But the 1912 legislation brought a kind of peace to the sector. It was no longer an unregulated market in which anything went. That was a blessing for farmers.
But in a strange sort of way, it was a double-edged sword also benefiting grain companies because it helped ease the cutthroat environment which prevailed before, says Langrell.
“Companies were not always in fair competition for farmers’ grain,” he says. “While they certainly wanted to get the grain for the best price from farmers so they could pass it on for the best margin or profit, they couldn’t risk significantly undercutting the competition.”
Having standardized procedures also helped. Sampling was a good example. In the old days, a company could take a pail of grain from the back of a farmer’s wagon and that was the sample, like it or not. Now the commission set a procedure for sampling grain. You took a probe into a boxcar or truck and extracted samples at five points — one in the middle and four from each of the corners, two feet in.
That was an advantage to both the farmer and the company, says Zastre. The farmer knew his grain would be sampled consistently in a certain way. It was also an advantage to companies because it meant there was one less thing to argue about and they could get on with the business of buying and selling grain.
“It helped pour oil on the waters,” Zastre says. “There was less disruption. Producers could be sure they were getting a fair deal. If they felt they weren’t, they had some avenues for appeal. And the grain companies knew the other guy had to do the same as they were doing.”