(April 19, 2018)  It was Friday the 13th and on CBC Calgary’s Eye-Opener its business commentator reported that Saudi Aramco, the world’s largest oil company had a net income of US $33.8 billion in the first six months of the year on a cash flow of US $52 billion.  It sounded like he was about to go into rapture right on the air.  But hey, the show was coming from Calgary, Alberta where they have long ago forgotten their heritage as the birth place of the Alberta Wheat Pool much less the critical role played by Albertans in the formation of the Canadian Wheat Board.

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This demonstrates how most people are unaware of the invisible giants of agriculture that take so much money from prairie grain farmers and the Canadian economy.  Just three years ago the public face of Cargill made US $120.4 billion and ADM made US $67 billion.  Combined this is three times what Saudi Aramco took.  Adding in the world’s third largest grain trader, COFCO (China National Cereals, Oils and Foodstuffs Corporation) at US $65 billion gives these grain traders combined revenue of over US $250 billion making Aramco look positively tiny by comparison.

These top three grain traders now control over 70% of the world’s grain.  The formerly mighty Louis Dreyfus and Bunge are in fourth and fifth place.  With the exception of a handful of other tiny grain companies these big five trade essentially all the grain in the world. The stakes in agriculture are very high and as the CBC commentator demonstrated, most people are oblivious.

For those who regard giant companies dominating a market sector with some suspicion, it just keeps getting worse for both prairie farmers and people who like to eat.  With announcement of the US Department of Justice’s approval of the US $66 billion merger of Monsanto and Bayer, the giants on the input side of agriculture are getting a lot larger too.  This merger on the agrochemical-seed side was preceded last year by the mergers of Dow with DuPont and Syngenta with ChemChina.  Outside of Canada, these three companies now control almost 100% of the world’s agricultural seed development and over 70% of the world’s agrochemical market.

Years ago prairie farmers met those giants by building cooperative grain handling systems, marketing collectively through the Canadian Wheat Board, and financing public interest plant breeding.  Essentially western Canada was operated as a gigantic virtual grain farm when it came to quality assurance and grain sales.

Working together provided huge price premiums to prairie farmers.  With the killing of the Wheat Board those premiums are now being vacuumed up by the giant grain companies.  For the first time in living memory number one Canadian hard red spring wheat is now usually trading at a discount to inferior US dark northern spring wheat.

While the giant agrochemical and seed companies are consolidating to take more from prairie grain farmers on the input side of things, in Ottawa the Liberals and their feckless Agriculture Minister are carrying on with the Harper government’s plan to privatize the Canadian developed genomes for wheat, barley, oats, and other essential grains while the Alberta NDP’s agriculture Minister keeps his head down.

In an Orwellian bit of misdirection this process of taking control of cereals genetics away from prairie farmers and giving it to the giant agrochemical seed companies of this world is being titled Value Creation Working Group Grains Roundtable.  What it really means is taking the value of the seed genome developed by farmers and the Canadian public and giving its control and profits over to giant foreign agrochemical seed companies.

So while Alberta, BC, and Ottawa are in a lather about what amounts to chump change being lost because of what they claim is inadequate oil pipeline capacity to the coast, the really big money continues to be stolen from prairie grain farmers by the invisible giants of agriculture and siphoned to their shareholders.

One comment

  1. Richard Michelson

    I was raised on a farm on the parries. My grandfather and father both would call the grain elevators in town for the day’s rates. If high, they would load the wagon by hand with grain scoops. By the time they arrived at the grain elevators the price had bottomed. With horses spent and white with sweat lather, they hadn’t the strength to haul the loads home. Farmers resorted to sleeping under the wagons only to find the prices remained bottomed until all the line had given in, selling the load at a loss.

    Then came the Wheat Board and the Saskatchewan Wheat Pool Co-operative to fight the corruption and provide fair prices as bulk sales agreements were arranged with the likes of China and Russia. Then came the next generation of farmers many whom took over an industry with the simple signature in ink on a few legal and financial documents. With the new, debt free asset base, collateral financing was the trend. Family farms expanded and became a corporate industry. This was the big time. With Brad Wall and Steven Harper expounding the virtues of “capitalism”, “free trade” and “free markets” the young agreed they were not going to be held back by the likes of co-ops and the Wheat Board. They took the bait.

    My cautions and reminders of farmers playing in the shark tank were met with ridicule and sarcasm. I was a ‘socialist’ and should move to Cuba or Russia. The Wheat Board was chopped up and a large chunk sold to the Saudis even though the Wheat Board spent considerable sums to find that the majority of the members, mostly the older generation, voted against it.

    I only hope that the ballots were not secret and those that voted with Harper are never allowed to be pulled from the shark tank. Some people cannot be helped and will only pull others down if you try.