Richardson a longtime free trade advocate

by Meyer Sosland
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For many Canadian grain farmers, Pioneer Grain Ltd. has served as a touchstone during periods of political upheaval and market uncertainty.

Over the years, Pioneer Grain Company, the flagship of the Richardson family’s agricultural businesses, has gained a reputation for being an honest broker and a steadfast supporter of an open and competitive grain marketing system in Western Canada.

To understand the importance of Richardson’s adherence to a free market, you have to understand the turbulent history of Western Canada, which, in the early 1930s, was swept up in the rhetoric of the Socialist Labour Farmers Party and the message of the Co-operative Commonwealth Federation’s Regina Manifesto.

After declaring their cooperative principles and their abhorrence of a competitive market, the democratic socialists tried, with considerable success "to replace the present capitalist system, with its inherent injustice and inhumanity, by a social order from which the domination and exploitation of one class by another will be eliminated, in which economic planning will supersede unregulated private enterprise and competition."

From this premise, a network of farmerowned cooperative grain elevators was created in each of the Prairie Provinces that eventually became Canada’s largest grain handling and marketing system.

As a large proportion of grain farmers on the Prairies turned to the rapidly expanding cooperatives, the bright orange, privately-owned Pioneer elevators held their place among the brick red "pool" elevators. Pioneer was the largest of several privatelyowned elevator companies that managed to survive cooperative movement. However, there remained grain producers in Western Canada who continued to believe that an open and competitive marketplace could serve them best and, for a few, delivering to Pioneer Grain demonstrated their political beliefs to the community.

The market dominance and political influence of the pools began to wane, however, when the Western Grain Transportation Act became federal law in 1983, replacing the Crows Nest Pass Freight rate — a legislated rate for moving grain that lacked financial incentives for the railways and did not cover the costs of transporting grain to export positions.

The implementation of the Western Grain Transportation Act made it possible for Canada’s two largest railways to offer grain companies financial incentives for efficiencies, such as discounts to elevators that could provide a 50- or 100-car spot for loading grain cars. For Western Canada’s lethargic grain transportation industry, the Western Grain Transportation Act was a breath of fresh air. But for grain handling companies, including the co-ops, it meant making massive capital expenditures to upgrade and consolidate their elevator networks in order to remain competitive.

The costs of making these changes caused the co-ops to overextend their financial resources, eventually forcing Canada’s largest cooperative and grain handler, Saskatchewan Wheat Pool (SWP), to the brink of bankruptcy. This threat to the Regina-based cooperative could have created a major crisis for grain farmers, a crisis that was only narrowly averted by the pool’s newly elected President and CEO, Mayo Schmidt, a United States businessman who restructured the cooperative and turned it into a corporation with badly needed access to shareholder equity.

With this change to the structure and principles of SWP, followed by the purchase of the remaining grain cooperatives in Western Canada in the form of Agricore United, the curtain was drawn on an era of Prairie history that was one of North America’s most successful and long lasting agrarian revolutions.