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

Updated: Jan 16, 2023

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.

The final attempt was the Homestead Act of 1860, which passed the Congress but was vetoed by President Buchanan. When the southern states seceded from the Union, Abraham Lincoln finally signed it into law a year into his presidency. In the next 70-80 years more than one million square-kilometers of federal land would be distributed to private citizens. The pace of land distribution slowed down after that, and homesteading was discontinued in 1976, except in Alaska at least until 1986.

For most, actual farming proved more challenging than settling. New settlers had little knowledge of farming, be it soil-conditions, seeding-practices, or farming-methods, and no federal-support or mechanical-tools were available. For politicians and elites, this was ignorance in display on the part poor peasantry, particularly on the part of plantation-owners who believed their slaves were not fit for anything other than bondage. It had not occurred to these critics that the peasantry in the Old World (Ancient China or Mesopotamia) had figured out how to farm 10,000 years ago in the Neolithic era. If the peasantry could not rise to the occasion on their own, naturally they could be taught how to farm through skill-development efforts.

The solution for the agricultural sector’s challenges came not from the south, but Michigan, Professor J. B. Turner calling for an “agricultural school” in the 1830s, written into the State Constitution and enacted on by the Governor in 1855. Picking up on the idea, J.S. Morrill of Vermont introduced the Land-Grant Act, when he was in the House in 1857 – he would go on to serve as a progressive Senator for the rest of his life, until 1898. Like the Homestead Act, this was also vetoed by President Buchanan but enacted by Abraham Lincoln in 1862. This would pave the way for not only Agricultural Colleges, thereby the A&M movement, but also plant the seeds of many leading universities of today, including the Ivey league Cornell University.

Aside from land and knowhow, the other crucial requirement was transport – even if you could grow crops, how to get them to market. In this vein, the only hopewas American School, most closely associated with Alexander Hamilton and later Whigs, but opposed by both early Republicans and reactionary Democrats. The other two components of this agenda, protective-tariffs and the national-bank, were not that relevant to agriculture, but infrastructural-improvements of critical importance.

In the early 18th century, the focus was on roads and canals, which of course helped the development of the agricultural sector, but as vast territories were opening to the West, railways became much more critical. A great deal had already been done to develop the rail-network in the Northeast but opening the barren territory to the West would prove much more challenging. There was no industry or settlements to serve, but agriculture would quickly develop to support this infrastructure.

Having learned from the political pains of supporting roads and canals earlier, most politicians in Washington were not going to touch railway-finance. It was left to the private sector, and whatever they could get from local and state governments. Too few believed it could happen, but in less than a century a huge rail-network was built across the continent. Along the way, railways even provided financial support to homesteads, in self-interest knowing that they would eventually generate rail-traffic.

Into the early 20th century, the US had become the largest agricultural economy. Now it was growing enough grains not only to feed itself but even export – small by today’s standards, but at the end of WW1 the US grain-exports were 15 million tons. In fact, there was a technology revolution underway; with rapid growth in output, prices plunged leaving the farm-economy in tatters. But despite their laissez faire policies, both Coolidge and Hoover administrations gave agriculture a special hand.

When the Great Depression struck, none of this was going to be enough to save agriculture. As part of his New Deal policies, FDR reverted to truly radical measures: price-controls and production-quotas. With farm organizations on side, Agricultural Adjustment Act (AAA) brought about a managed-farm-economy, as un-American as it sounded. The farm-economy not only recovered from the Depression but rode out WW2 and would go on to grow in a fairly stable and even prosperous manner.

The US has since maintained its position as the largest grain producer as well as the largest exporter. In the meantime, China, struggling to feed itself through the 1960s and 1970s, went through an agricultural revival of its own. It did not have much land but by achieving remarkable yield increases, it became the world’s 2nd largest grain producer. By mid-2010s, it was producing 550 MT, only 8% less than US. While US was exporting 140 MT, China still had to import 120 MT, but now it could afford to.

Development of our agricultural sector

The first landing in Newfoundland is traced back John Cabot, an Italian serving the King of England in 1497. The subsequent claims by the Spanish and Portuguese would not bear fruit, but in 1534 it was Jacques Cartier who planted a cross in Gaspe Peninsula claiming the St. Lawrence a region for France, thus was born Canada, a colony of France in the New World. It would remain that until 1763 when France ceded its North American territories to the United Kingdom with the Treaty of Paris.

These colonial incursions were not the first settlements in North America; humans had started coming from Siberia across the Bering land-bridge during the Paleo-Indian era at least 15,000 years earlier. With the glacial-melt and climate stabilizing (8000 BC) more people started to settle in the Great Lakes region. The next era known as Woodland cultural period (2000 BC – 1000 AD) brought more people to Eastern Canada (Maritimes, Quebec, Ontario) with evidence of early crop-cultivation dating back to at least 500 AD. When colonists started exploring the area, these were the indigenous people they came across, mostly Algonquian and Iroquoian.

Unlike their counterparts landing in the US in the 15th century and Australia in the 18th, French explorers had not dismissed the natives as nomadic hunters-gatherers. Samuel de Champlain and Gabriel Sagard had noted that Iroquois and Huron had been cultivating maize, potatoes, beans, squash, and sunflower. Later archeological findings would provide evidence of squash going back to 3rd millennium BC, and maze somewhat later. Agricultural history in Canada does not go back as far as the Neolithic era like in many other parts of the world as we had noted earlier, but certainly predated the arrival of the French and the British by at least a millennium.

Origins of colonial-agriculture are traced back to the early 1600s, Acadians, French-descendants who had settled in the Maritimes. They were growing wheat, flax, and vegetables, as well as opening pastures for grazing, evidence of husbandry. But they would vanish from this region after France’s defeat, accused by the British of siding with France and deported to Europe. Some would return to North America to settle in Louisiana; their descendants would give rise to what is known as Cajun culture.

Maritime provinces (known as Atlantic Canada) now account for less than 7% of the population, 2.5% of the landmass (excluding Labrador), and only 1.5% of farmland. Scope for farming was naturally limited in Newfoundland, known as the “rock” – primary industries are oil, mining, and fisheries. But agriculture always played a key role in the rest of the region (Nova Scotia, New Brunswick, and Prince Edward Island). Now cattle and dairy farms account for more than a third of all farms in the region, but cultivation is dominated by two crops – potatoes and blueberries. Atlantic Canada accounts for more than 40% of the country’s potato-growing area, more than half that on the tiny PEI, and as much as 60% of blueberry-growing area.

Going back to beginning of Canada, the Crown had realized that New France had to be settled quickly to create a viable colony. The only path was farming, but commercial interests were mainly interested in fur-trading, thus fur-monopolies were given out in exchange for commitments to establish settlers. It was a slow process, as the land was difficult to cultivate, and the settlers knew little about farming. These efforts were coupled with the introduction of a seigneurial-system, larger manorial estates, but other than the Catholic Church, there were few takers.

By the middle of 17th century, the Crown reasserted control to settle families, with the hope of growing a wider variety of crops. Wheat seemed to take hold, but soil conditions were not that favorable and there was no access to fertilizers. Into the 18th century, animal-husbandry proved successful – cattle, swine, sheep, and horses. Ironically, things improved with the British takeover, attracting Anglo-Canadians as well as New Englanders to buy land and large-estates. But into the 19th century Quebec had fallen significantly behind Ontario. The land could no longer support the population, giving rise to an exodus to nearby cities or across the border to the US.

Into the 20th century, Quebec agriculture would find salvation in animal-husbandry and dairy-farming. But there would be another credit-crisis to get over in the 1920s, before even the Great Depression set in; recovery would not come until after WW2. Quebec now has a sizeable agricultural sector, but mostly dominated by meat and dairy, together with locally grown feed-grains to that end. A variety of vegetables and fruits (mostly berries) are also grown, as well as nuts and maple-syrup.

The evolution of agriculture in Upper Canada (Ontario) through the 19th century was a text-book case of how not to kick-start a new market economy – a development project left in the hands of an incompetent kleptocracy with aristocratic aspirations. It was a golden opportunity to create a thriving agricultural market-economy in short order, with all the natural-resource ingredients in place, but it would turn into a century of class-struggle to create a mess that would take another half-century to fix.

Unlike in New France, there was no shortage of settlers, ranging from a class of privileged government and army officers from across the British Empire (including Loyalists trying to escape from the US), to a class of aspiring hard workers looking for a new start in the New World. But Lt. Governor of Upper Canada, John Simcoe, aspired for an aristocratic order by giving out large sections of land to the privileged. This would create a landed-leisure class sitting on large farm-estates, dictating the agricultural and trade policies of the Dominion for the rest of the 19th century.

Plots of land were also available to the not-so-privileged on loans, but failure to pay was a prison-sentence. There was pressure from large-estates to keep land prices high as they needed workers, not land-owners. Also, most land was wooded and had to be cleared, taking years while subsisting on parts ready to farm. In a one-crop wheat-economy, with no rotation options, subsistence-imperative would kill the soil. After a few years of what was called wheat-mining, the only option for destitute farmers was to sell to newly landed immigrants who did not know any better.

Dependence on wheat brought even bigger problems. Perhaps farmers, large or small, did not know any better, but Ontario was not the best place to grow wheat. With Corn Laws in effect in early 19th century, wheat could not even be exported to Britain. This changed into the second half of the century, making Ontario the preferred import source for Britain. But prices remained volatile, making survival difficult for subsistence-farms, with razor-thin margins and no access to finance.

This was the dark side of reality to subsistence-farmers, but in time the communal side of the farming-economy started to develop to provide a modicum of support. Neither the government nor the rich estates had any inclination to help, but various credit-unions, cooperatives, and labour-exchanges emerged to help farmers in distress. The only salvation was to diversify away from wheat to other crops, animal-husbandry, and dairy-farming. There were world-wars and a depression ahead, but into the 20th century, there were hopeful signs of a more viable structure emerging.

Ontario now has 38% of Canada’s GDP and population, with about 10% of landmass and 8% of farmland. Its landmass is two-thirds of Quebec’s, but its farmland is 50% more. Agricultural sector accounts for a slightly larger GDP-share than Quebec, but as in the latter, meat-dairy is the largest segment. Together with corn, Ontario also grows soybean, wheat, potato, pea, and bean. It is the only province where tobacco is grown, together with variety of fruits and vegetables, particularly mushrooms.

Emergence of the Prairie grain-economy

John Simcoe, with aristocratic aspirations for the territory he was governing, left his post in poor health in 1796 to return to Britain, and died a few years later. At about the same time, a real aristocrat, Thomas Douglas Selkirk had risen to the House of Lords. Being the 7th son, Selkirk had no hope of inheriting his father’s title, thus had taken time to study at the University of Edinburgh. But even before his father, all his elder brothers had died, thus he inherited the title together with a sizeable fortune.

While in Edinburgh Selkirk had taken pity on crofters, who were being displaced by their landlords. Unlike Simcoe and many other colonial administrators of the Empire whose interest was mainly looking after their own kind, Selkirk’s ambition was to help settle Scottish farmers in the British Colonies. His earlier projects were in Prince Edward Island and Ontario where he bought land and settled farmers. But his prize-project was further west, a huge landmass centered in Manitoba, stretching from Northern Ontario to Saskatchewan, and extending south to the Dakotas.

This was part of a much larger territory, Prince Rupert’s Land, including the entire Hudson Bay basin, stretching across the Prairies, and later extending to the Pacific. This landmass was even larger than the Louisiana Territory the US had bought from France to kick-start agriculture on the Great Plains. It had been claimed by the Crown but given a trading-monopoly granted to Hudson Bay Company (HBC) with a royal-charter in 1670. Lord Selkirk displayed enough skill and power in imperial-affairs to secure a land-grant from HBC to establish an agricultural colony of his own.

The colony got underway in 1812 and yielded a modest wheat harvest in 1814, said to be the first in the west. But plagued with shortages of food and conflicts with the Metis, it would never get off the ground as Lord Selkirk had dreamt. In the coming years, conflicts ensued between Selkirk’s men, North West Company, and the Metis. With imported seeds from Wisconsin a good wheat-harvest was achieved in 1920, but in the meantime, Lord Selkirk had been battling in courts and would pass away in 1920 before even turning 50, though his legacy continues in Manitoba to this day.

The road ahead would not be smooth but in the next half a century production increased steadily with Manitoba establishing a reputation for its Red Fife wheat. By 1870 wheat was being shipped to Ontario and a few years later to Britain through St. Paul, Minnesota. When CP Rail opened to the east in 1884, exports to Britain started to move on an all-Canadian route. By this time, construction of grain-elevators had commenced, the first flourmill built, and in 1887 Winnipeg Grain Exchange opened. With the completion of the Panama Canal in 1914, and the first grain-terminal opening in Vancouver, wheat exports to Britain commenced from the west-coast. By this time, the Prairies were producing 300 million bushels of wheat (more than 8 MT), now not just Manitoba but also to its west, both Saskatchewan and Alberta.

Further west Saskatchewan and Alberta were of little significance in Canada’s agriculture during the 19th century, but today they represent 70% of the country’s farmland, in acreage 6.5-times Manitoba. Ranching was widespread in the late 19th century but with very limited farming – dry climate, lack of irrigation, short season, and most importantly, too few people to farm. But into the early 20th century, several factors gelled together to give rise to a remarkable grain-revolution.

Soon after the Confederation of eastern provinces was settled in 1867, the attention turned to the West. The government in Ottawa was determined to avoid resistance from First Nations. The only solution was homestead settlement like in the US, thus came the Dominion Lands Act of 1872. But before settling the land, priority was given to clearing First Nations out of the way – a heritage of which we are naturally ashamed. This was done under a liberal-veneer of treaty negotiations that led to the settlement of First Nations in so called “reservations” with little if any compensation – said to be a peaceful and fair solution, but of course it was horribly unjust.

The 1872 Act gave every claimant (male above the age of 21) 160 acres of land for a $10 fee and a commitment to cultivate at least 40 acres and build a dwelling. Once demonstrating adequate improvement to the original section, farmsteads were entitled for another 160 acres of adjacent property for a $10 fee. Though even the viability of 320 acres was questionable for wheat-farming, the process got underway with further consolidation to come down the road. Moreover, there was a 20-mile exclusion along railway-lines, a formidable distance to move grain by wagon. In 1879 the exclusion zone was limited to 10 miles, but at a price of $2.50 per acre. Soon after the limit was eliminated but land had to be bought from the railway.

The mere act of giving away land would not have worked without immigration. The hero of this part was Clifford Sifton, Minister of the Interior under Sir Wilford Laurier. He embarked on a very aggressive immigration policy by setting up colonial offices across Europe, attracting 3 million settlers in just two decades from 1890s to 1910s. He also oversaw the turning of Saskatchewan and Alberta into Provinces in 1905. By 1930 close to 500,000 km2 of land would be settled under the 1872 Act, increasing farmland across the Prairies from 1.5 to 16.4 million hectares in just 30 years.

New settlers were given plots of land, but the real challenge was growing crops. The region’s weather was dry and growing season short, while the settlers knew little about soil conditions and had limited access to suitable seeds; there were a lot of challenges to overcome. Important achievements were the discovery of Marquis Wheat, small-scale irrigation, moisture-conservation, weed-control, and most importantly, introduction of gas-tractors, gang-plows, and threshing-machines.

Through the early 1900s, despite all these challenges, yields were increasing, and crop quality was improving. But the next challenge was getting crops to the nearest railway-line – even a few miles was difficult before trucks. Transcontinental railway had been completed and many branch-lines built since, with private capital as well as government subsidies. But it would not have been possible to move grain to market if the government had not negotiated reduced rail-rates from CPR.

Grain prices were volatile but on the rise through the early 1900s and into WW1, giving the appearance of a boom in the Prairie grain-economy. The reality was that small farming operations were precariously marginal, and over invested in land and equipment, with no marketing power; they would be ready to collapse in the event of a downturn. Even though the rail-rates were regulated, farmers were working overtime for grain-traders in Winnipeg to make money off the crops they grew.

These realities were already setting in at the turn of the century, even as new settlers continued to flood in to expand the farm-economy. Collectivist instincts started to emerge with Grain Growers’ Associations across the Prairies, including Manitoba. In addition to demanding public ownership of grain-elevators, farmers started to advocate cooperative marketing initiatives. The Grain Growers’ Grain Company was formed as early as 1906 but did not gain momentum right away.

The population of Alberta and Saskatchewan had increased 5-6 times in 15 years; even Manitoba’s population had doubled. Wheat output was increasing even faster; with rising prices, so were revenues. But farmers were anxious, worried about what was going to be left in their pocket to pay for the new machinery they felt obliged to buy in order to advance. Wheat had become a major export commodity; how it was going to be marketed and sold had become even more important than its growth.

A new era ushered in with WW1

Into the 1910s, half a century into the homestead era, we observe a fundamental shift in farmers’ consciousness. Early settlers were subsistence-farmers, battling with difficult soil and growth conditions to feed their families and cover the costs of the next crop-year from what they harvested and sold. As farms got larger, most doubling under homestead rules but some even more, farming chores did not go away but how to get the crops to market and sell became even bigger worries.

Where the closest branch-lines and grain-elevators were had now become even greater concerns than seeding or harvesting, not to mention who was going to buy the crops and what margins were going to be left behind. The rise of the collective consciousness exhibited in the grain-growers-associations came from these shifting priorities. The flip-side of this was the growing antagonism towards the railways and grain-traders as every cent in their pockets was coming out of the farmers’ margins.

Fixed rail-rates had been secured in 1897 – half-a-cent per ton-mile, known as Crow’s Nest Grain Rate – by the federal government in return for other concessions given to the railway. The next challenge was grain-elevators, which provincial governments were being pressured to build and operate at lowest rates possible. The cooperative marketing initiatives gained attention with the formation of the Grain Growers’ Grain Company in 1906. The founding of United Farmers of Alberta in 1909 gave a further boost to lobbying efforts on all fronts in farmers’ interests.

Pressures were mounting for farmers to gain more power and influence over every link along the wheat supply-chain, but with no urgency for radical action while volumes, prices, and revenues were on the rise, which was the case until WW1. Prices did not plunge into the war-years, but the federal government stepped in in 1915 to control all wheat exports. In 1917 the Board of Grain Supervisors was set up to fix prices, initially wheat and soon after all crops. At the conclusion of the war, the government set up the Canadian Wheat Board (CWB), but only for one year.

When the Board was dissolved in 1920, wheat prices plunged from almost $3 to less than $1 per bushel. In self-defense, grain-growers got into the act to set up their own “pools” to take over the marketing of crops, with considerable success for the next decade. But with the onset of the Great Depression, the pools were wiped out, together with many individual farmers, obliging the government to bring back CWB.

We dealt with this history in one of our previous articles on CWB and will come back to some of the same issues in our next article. Moving forward, we are not calling for CWB’s return or any other regulatory measures. Instead, we offer market-based solutions to address the remaining problem: captivity of overseas grain exports to bulk-systems, a relic of the past that is now the greatest threat to producer interests.


A Brief History of Grain Trades
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