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XXXI - A Brief History of Grain Trades: Millennia of Progress

Updated: Jan 16

We were planning to open our fourth volume of articles with a piece on how the bulk transportation system had come about and continued to captivate our overseas grain-exports to our day. Our initial plan was to follow the theme of our last article looking back on history, which mainly took us back to the creation of the Canadian Wheat Board (CWB) in the aftermath of the Great Depression when the Prairie grain-economy was left in tatters, needing a heavy-handed government intervention.

But this would have been an incomplete representation of the bulk-system’s origins as that system had its roots going back to the original Prairie settlements in the 19th century. Even starting the clock then would have been an artificial truncation of our grain-history since what had transpired in Canada could not be divorced from the development of agriculture in the US, which was closely related to the building of railroads and homestead settlements across the Great Plains in the 19th century.

Then we realized that starting the clock then, even taking it back to the days of US independence, would be equally artificial, forcing us to go back to the settlement of the New World which was really an extension of European history of the early Middle Ages. This in turn was related to the Roman Empire, and before then to Ancient China and Ancient Egypt, neither of which could be ignored. Eventually we found ourselves in the Neolithic Era, origins of grain-cultivation 10-15 millennia ago.

This was turning into a book rather than an article and given that we were not specialists in either history or agriculture, it would probably take us more than a year to complete. We managed to truncate the subject to 14 pages, including this introduction and a concluding page to tie the topic to our next article on the bulk-system. We hope you will forgive us for any mistakes, omissions, or distortions, stemming from our lack of knowledge or highly ambitious truncation of history.

Most of our audience is primarily interested in trade-facilitation to overseas markets, but we were encouraged to see so many of you reading our only somewhat historical article to date, the one on CWB, which turned out to be our most read article. Long and short of it, we justified this effort as being relevant to both grain-trades and transport-systems. We hope we were not wrong in our wishful thinking and that you will enjoy this article with similar enthusiasm and put it in its proper context.

The main conclusion we draw from this long grain-history is that many civilizations over time, measured in not just years but millennia, engaged in grain production or trade, never shied away from change in cultivating new types of crops, embracing new farming methods or techniques, or trading what they produced through new channels or to new markets, or transporting them by whatever means available, be it barges thru waterways, sail-ships across seas, steam-ships across oceans, or railways on land. The comfort we draw from all this is that agricultural producers are open to “change” which we are convinced will be the case in response to our trade-mission.

Glimpses of ancient history

The settlement of our Prairies dates to the early 20th century, but grain cultivation elsewhere in the world goes back 20,000 years, and consumption of wild grains another 80,000 years. Historical records of agricultural-advances date back to the late Stone Age – First Agricultural Revolution during the Neolithic era around 10,000 BC. Visits to local museums in China or the Middle East, different civilizations with virtually no contact with each other, would vividly confirm the ingenuity of mankind in working the soil to grow similar crops we still consume many millennia later.

While subsistence-farming goes back much further, commercial-farming emerges in the Neolithic era – images of local-markets to facilitate trading, and massive grain-silos still intact in Upper Egypt confirming evidence of large trades into the early Bronze Age. This is when Ancient Egypt introduced wind-power to grain-trades, with ancient vessels sailing the Upper Nile and Eastern Mediterranean. This is also the period when we see evidence of grains moving through waterways in China and sailing the waters of the Pacific – vessels very similar to those used by Egyptians.

Towards the end of the Bronze age, we see two major powers emerge, Imperial China in the east and the Roman Empire in the west, both predominantly agrarian economies. The first golden period of Imperial China, Han Dynasty, flourished based on thriving agriculture, split into East and West, and collapsed mainly over land-conflicts. High-points of Chinese history – Tang, Song, Ming, and Qing – focus on science, technology, culture, and literature, but what fueled their rises (wealth accumulation) and caused the collapses (rebellions or famines) was agriculture.

History of the Roman Empire, half of Imperial China’s but still a millennium, was less volatile, following a long rise and a more abrupt end, but it was even more driven by agriculture, in fact explicitly defined as such by its laws and rulers. It started out with small landholdings but turned into an Empire of huge land-estates, not very mechanized and highly dependent on slaves or serfs. Trades were all about grains or other agricultural products, the roots of all fortunes and main revenue sources of the treasury, the raison d’etre of statehood. Grain was imported and distributed to Rome residents in the name of Goddess Annona, Cura Annonae, care of Annona.

The millennium after the fall of the Roman Empire was a period of stagnation for some, progress for others, one of progress in farming methods, crop varieties and yield increases. But the structure of agriculture had not changed much after late Rome and remained dominated by large estates. If anything, the same model spread to the rest of Europe, with the label changing to a gentler word, manorial – large manors owned by landlords with droves of serfs working the fields for bare subsistence and going hungry during droughts. The feudalism label did not take hold until later, but agriculture had been in a feudal state since the Roman Empire.

In the Middle East, the Arab world did experience an agricultural revolution of sorts in the late 8th century, with improved farming-methods, crop-diversification, and significant wealth accumulation, claimed to have laid the foundations of the Islamic Golden Age. The conquests across North Africa into Iberia were said to have revived agriculture on the peninsula with new crops, improved irrigation, and fertilization methods. Some credited Arabs for spreading their own revolution to Iberia, while others interpreted it as adopting Roman knowhow at home and carrying it to Iberia.

The landscape of Levant, North Africa and East Europe changed with the Ottoman Empire, founded in late 13th century in Anatolia and expanding massively in the next three centuries to reach a size 80% of the Roman Empire at its peak. Ottomans had a different approach to governance: territorial expansion by conquests and running those territories by local land-lords and state-administrators. Aside from plunder through conquest, the main source of state-revenue was land-taxes, incentivizing land-owners to cultivate their land. Unlike Romans, there was no emphasis on grain, but the result was the same, people were fed and ready to fight when recruited.

Into the 17th century, some historians claim a new agricultural-revolution had gotten underway in Britain, with productivity improvements and output increases. But this was the industrial-revolution underway with mere spillovers to agriculture; manorial system, indistinguishable from feudalism, was alive and well in British agriculture. In fact, if there was an agricultural-revolution, it was taking place in continental Europe. The main challenge Europe, including Britain, faced through industrialization was the labour-drain on agriculture, as more of it was needed on factory floors. To feed the entire population during this transformation, yields had to increase in the fields.

This short history of agriculture over 10-12 millennia from the Neolithic era to the 18th century reveals huge advances. There was little interaction between different civilizations – Asia to Levant to Europe – but farming methods advanced, and yields increased with greater variety of crops everywhere. But everything was largely local, including grain-trades, confined to local-markets; global maritime trades had not started. There were sailings on the Nile or across the Mediterranean but short hops by today’s standards, albeit more challenging than ocean-crossings a millennia later.

Into the Early Modern Era (1500-1750) all major nations started embarking on territorial conquests with imperial ambitions, colonizing far distant lands, under the guise of mercantilism, but subjugating the territories they conquered to their own authority to exploit. British and Dutch led the way, but neither Spain nor Portugal was going to be left behind; soon all European powers followed, Germany, France, Italy, and even Belgium. This trend would prevail well into the 20th century.

Part of the mission was to conquer and settle under the pretense of land-purchases at fair value, but turned-out to be land-confiscation under gunpoint. Trade missions turned into occupations, like British East India Company running India from 1612 to 1858, until the British Raj made it a more legitimate colony, while others (Dutch, French, Portuguese, Austrian, and Danish) also had their pick on India. Other trade-missions would also turn into wars or occupations, like Opium-Wars with China.

Cheap land purchases by colonialists gave rise to huge agricultural estates, be it in India, Indonesia, South Africa, or other parts of Asia or Africa – like feudal-estates in Europe but run more brutally. Also, mercantilist-trades involved agricultural goods but typically not grains, which were too bulky and low-value. There were much more lucrative commodities to fill the hulls of merchant-ships of the time – slaves, opium, coffee, tea, tobacco, spices, precious-metals, and many other materials.

Global grain trades of the era might not have been of much significance, but of the 10 largest grain economies of today 6 were lands that were colonized then by the European imperial powers: US (1st), India (4th), Brazil (5th), Argentina (6th), Canada (8th), and Australia (10th). And yet another EU (3rd) mainly consists of the colonizing powers themselves, leaving only China (2nd), Russia (7th), and Ukraine (9th) outside the group. Thus, roots of most major grain economies go back to the Colonial Era.

We will next deal with the agricultural histories of the US and Canada, but a brief reference to Australia may be in order. It may rank 10th among the distinguished grain-economy-club, but it is the most agricultural economy in the developed world. Its colonization was rather late, towards the end of 18th century, but now in addition to wheat, barley, and oats, it grows oil-seeds and pulses, as well as sugarcane, fruits, and vegetables. Moreover, it has highly developed diary, meat, and food industries.

Opening of the New World

Let us now turn to the greatest prize of the colonial era, discovery of a new continent, The Americas, which in the next 500 years would become the world’s largest source of grains. Five largest producers in this region (US, Brazil, Argentina, Canada, and Mexico) now account for about a third of global grain production, about the same as 5 other large producers (China, India, Russia, Ukraine, and Australia), with the remaining third coming from rest of Asia, Europe, Middle East, and Africa.

The most significant outcome of this continent’s discovery was the US, the world’s most powerful nation, and largest grain producer and exporter. It now accounts for half the continent’s grain output, about a fifth of global grain production and exports. Before the Europeans started settling, North America was home to indigenous cultures. Though they were regarded hunter-gatherers, Native Americans did have an agricultural base, growing a variety of domesticated crops.

Early settlers in Massachusetts had brought their own seeds (barley and peas) but in a bigger way adopted indigenous maize. Soon after, large scale plantations got underway growing tobacco in Maryland and Virginia, indigo and rice in the Carolinas, while further southwest cotton was spreading like wildfire. These were replicas of feudal estates but with access to abundant land and slaves. In the shadows of these large-estates, subsistence-farming was widespread for new settlers to scrape by.

At independence in 1776 the US footprint was confined to 13 states along the Atlantic Coast. It was largely an agrarian economy but with two distinct sectors: farming-estates dependent on slave-labour, and small-farms trying to commercialize from their subsistence-roots. The latter sector expanded with the doubling of the nation’s landmass in the next couple of decades, with addition of new States and claiming of new Territories, the US border then extended to the Mississippi River.

The most significant change, particularly from an agricultural perspective, came with the Louisiana Purchase in 1803, a vast territory taken over from France, doubling the nation’s landmass once again – LP larger than France, Germany, UK, Spain, and Italy combined (larger than our Prairies including their northern parts). The significance of this was twofold: opening fertile land for agriculture and giving Mississippi River ocean-access at New Orleans. The next challenge was settling and farming the land.

Settling of new lands turned into a long political battle; idealists wanted to hand out land to new-comers or the impoverished among the already settled to cultivate, for free with a commitment on their part to farm. The opposition came from Democrats and not surprisingly plantation-owners. Numerous attempts to pass land-grant laws failed, except for the Preemption Act of 1841, which allowed “squatters” on federal-land to acquire small-plots at a nominal price, but with too many strings attached.