By the early 1900s Western Canadian farmers believed they were being exploited by private grain companies. Aaron Sapiro, an American lawyer from California, had helped to set up marketing cooperatives among farmers in the US. In 1923, he did a speaking tour in the Prairies promoting cooperatives as a vehicle for farmers to buy and sell their own wheat. When he spoke in Saskatoon on August 7, 1923 the building was packed. The Saskatchewan Wheat Pool got off the ground in the following year and Sapiro’s speeches were a catalyst.
“There is not a thing dealers do that farmers
We have met together for a discussion of cooperative marketing . . . When I say cooperative marketing I do not mean selling only. I mean gathering the product, storing the product, actual financing, constructing warehouses, financing the market and finally distributing the product . . . and when we come and discuss this subject with you more or less positively we do not do so because we read about it in a book, or read about it in an editorial. We have seen it done time after time by farmers’ organizations and their hired men . . .
The central problem of cooperative marketing, the central problem of the farm is to try to stop dumping by the farmers. You look at me as though that is merely a word – and it is! I will explain to you what we mean by dumping, and then I will explain what we mean by merchandising because we think the aim of cooperative marketing is to save dumping of farm products and instead of dumping to introduce merchandising of farm products . . . We have grown sick and tired of having people say to us, “Supply and demand fix the price.” We know it does, but they forget to tell us that there are two little words in supply and demand that really determine the farmers’ price, and those two words are “where and when,” “time and place.”
The dealer – why take this year – he tells you that you are going to have the most enormous over-production of Canadian wheat . . . The dealer will buy your full crop, you will dump it into his lap, and then he will merchandise it, he will centralize it, he will move it out into the markets of the world, only as and when and in such quantities as those markets are able to absorb it at a fair price. Why, the dealer is a real merchant, and we admire real merchandising so much in California that we have studied all that those dealers do, and then we have decided that there is not a thing that the dealers can do that the farmers cannot do if they are rightly organized, and we have imitated and copied all that they do that is worthwhile, and now we merchandise farm products just as they need to merchandise farm products, and instead of breaking our price in the crop harvest season we are merchants, and we sell what the markets will absorb at that time, and the balance we store; and the balance we find new markets for; and the balance we warehouse; and the balance we carry over and carry over, just as the dealers will do this year with your crop if you do not organize in time . . .
That is the first step. Stop dumping and substitute merchandising. Well now, that is not enough. That simply means to see where you are going, and you have the right spirit. Right now you have the finest cooperative spirit in all of the land, but that is not enough. Spirit alone will not build things; you have got to know how to build the machine to take you to that particular goal, and if you make as mistake in building the machine all your work is done in vain. . . .
Building the machine
The first thing is you have to organize by commodity and not by locality. You can organize locals to receive and grade and store, but you must organize by the commodity for all your selling purposes. . . The second principle is . . . you must be on an absolutely non-profit basis, in which your organization cannot make one cent of profit or one cent of commission or one cent of anywhere off the farmer. It must be service and nothing more and it must be non-speculative . . . Then you must be democratic in control – one man one voter throughout. Any cooperative that allows proxy voting should be abolished by law . . .
Now what kind of contract should you have? . . . The contract must be a long term contract. A one-year contract is not worth the paper it is written on. . . You are going to build warehouses, store houses, elevators and all kinds of things. How are you going to pay for them with a term of one year? It cannot be done. But if you have a long term contract you can amortize . . . You will have to have some provision about how you will deliver your crop. You know ultimately you will have to own all your country elevators. You cannot start that way, but ultimately you will get there and you will own those elevators by buying them over a period of five years. All you can do at the start is make a contract for the use of those elevators, and in the contract keep an option to buy them up, paying at the rate or one-fifth each year so that it will not come too heavily on any one crop . . .
I have not any doubt about your getting elevators and I have no doubt but by forming a real wheat pool, with 50 per cent or over of the wheat of this province signed up for this year, you and Alberta and Manitoba will be able to have a distinct and definite effect in stabilizing the wheat market of the world – upwards. . . And then we are going to unite the three associations in the one central unit agency which ought to handle even this year more than 50 per cent of the wheat in all the Dominion of Canada.
The Saskatchewan Wheat Pool shed its cooperative identity in 1996 when it became a publicly traded company on the stock exchange. In 2013 its successor company Viterra was purchased by Glencore International, one of the largest commodity corporations in the world.
Source: Library and Archives Canada, microfiche drawn from Shortt Library at the University of Saskatchewan. Original pamphlet from the United Farmers of Canada, 1923.
More information: Wikipedia, Saskatchewan Wheat Pool
Photo credit: Saskatchewan Wheat Pool Collection, Saskatchewan Archives Board