Lessons of the co-operative movement

Hey there, time traveller!
This article was published 27/01/2024 (642 days ago), so information in it may no longer be current.

Sometimes things people say during conversations on either side of a formal interview stay tucked away in your memory, circling back from time to time to root themselves in a new context.

Bill Strath, a grain farmer from Souris, was president of Manitoba Pool Elevators and a leader in the Prairie co-operative movement in the late 1980s. That was back in the days when these farmer-owned businesses controlled more than 80 per cent of the grain handling capacity, with investments in oilseed processing, flour milling and forays into doughnut-making.

“You know, people like to call the co-operative movement ‘socialism’,” Strath said, or words to that effect. “They’re wrong. Co-ops are really about small-C capitalism.”

I hadn’t thought about it that way before. For me, co-ops didn’t have a philosophical label; they were just a part of daily life.

Growing up on a farm in southern Manitoba, kids like me learned to recite our co-op membership numbers about the same time we memorized our home phone number and how to recognize the distinctive household ring on our telephone ‘party’ lines.

There was clearly trouble brewing around the time Strath made that observation. Although many didn’t realize it, the foundations underpinning these behemoths were crumbling as the burden of financing the future loomed and philosophical differences over how to tackle the challenges ahead widened.

In the end, they collapsed under the weight of it all. But they could by no measure be deemed a failure. What they accomplished was nothing short of amazing.

Protest movements come and go — even in modern times. We frequently see new political parties emerging out of anger and frustration, great for rallying cries that bring people together but hardly a recipe for lasting success.

These co-ops effectively converted farmers’ collective frustration and sense of helplessness in the early decades of the past century into a commercial force to be reckoned with.

That commercial strength made them much more than successful businesses. It gave them the ability to influence local and national policies representing the interests of their farmer members.

Although they had hired help to manage day-to-day operations and advise their boards of directors, these companies were run by farmers. The board of directors took their cues from member delegates who regularly took time away from their farm businesses to meet and discuss the business and political issues of the day.

An opinion piece written by two University of Saskatchewan researchers making the rounds this month suggests these accomplishments are worth reviewing as continued consolidation in the grain handling and transportation sector replicates the powerlessness farmers felt a century ago.

The piece by Mark Andre Pigeon, an assistant professor with the Johnson Shoyama Graduate School of Public Policy, and Natalie Kallio, a research associate with the Canadian Centre for the Study of Co-operatives, highlights the timing of last year’s merger announcement between grain companies Bunge and Viterra as ironic.

Viterra holds the last remnants of the privatized Saskatchewan Wheat Pool, which would have turned 100 years old in 2023.

This merger makes Bunge the biggest grain handler in Canada and third largest globally. As pointed out by the National Farmers Union, five companies now control 90 per cent of the global grain trade, six of them sell 70 per cent of the agrochemical and four sell 60 per cent of all the seed.

Not unlike in the grocery trade, as competition declines, owner profits go up while the prices they pay and the services they provide trend downward.

“For farmers and policymakers, the lesson should be clear: even as Saskatchewan contemplates the loss of another corporate sector headquarters, perhaps the best hope for the future of the province’s economy and its farmers can be found by looking back to the past and an organizational model that when governed properly, is rooted, resilient and responsive,” Pigeon and Kallio write.

The pools’ collapse was acrimonious and it left a bitter aftertaste for many farmers. However, examples of co-operative capitalism are alive and well in the agricultural sector and these models merit study.

History doesn’t have to repeat itself — if we can learn from our past.

Laura Rance is executive editor, production content lead for Glacier FarmMedia. She can be reached at lrance@farmmedia.com