Now that Saskatchewan Wheat Pool delegates have voted to officially end the grain company’s co-operative structure, some are considering starting over.
Darrell Dutchak, a pool delegate from Rama, Sask., who was opposed to ending the farmers’ Class A voting privileges, said the idea for a new grain co-operative was being considered even before the Feb. 21 vote.
He said members realized that if the delegates approved the plan to establish a single class of common shareholders and give up the little bit of farmer control they still had, it would leave them without a co-op working in their communities.
Read Also
Agriculture ministers agree to AgriStability changes
federal government proposed several months ago to increase the compensation rate from 80 to 90 per cent and double the maximum payment from $3 million to $6 million
Many were angry that the one-member, one-vote principle didn’t apply when it came to the most recent decision.
For those who truly believe in the co-operative ideal, that vote has left them in a bind, he said.
“What we did on Monday (Feb. 21) was absolutely not the right thing to do,” Dutchak said. “Our members are distraught.”
Although Class B shareholders and noteholders still have to vote on the recapitalization plan on March 23, it is expected they will approve it. The pool already has agreements from noteholders representing 37.7 percent of outstanding convertible notes.
The plan also calls for the establishment of a new co-operative structure known as the farm leadership council. At least four members of the pool’s board of directors will be farmers.
But some believe that if farmers could form the wheat pool 81 years ago, they could do it again, Dutchak said.
He couldn’t say how soon meetings might be held to see what kind of support exists. Soon-to-be former delegates are “feeling beat up right now,” he said, and need some time.
It is unlikely that a new grain handler would build or buy any facilities, at least not immediately, he said. Instead, it would probably have rail car loading sites and operate like producer car co-ops.
He has heard of farmers getting together to buy old Sask Pool elevators and load producer cars. Those ventures are making money, he said.
“If all goes well we could be back in business some day again,” Dutchak said.
Brett Fairbairn, a historian from the University of Saskatchewan who has studied co-ops, said most new agricultural co-ops are not based on the 1920s wheat pool model of mass marketing a bulk commodity. Instead, they focus on value-added processing. Members are willing to invest large sums of money and sign contracts that commit them to making the co-op work, he said.
Fairbairn said a co-op model can certainly fit the philosophical belief of Sask Pool members who feel left out, but he said they have to ask themselves if there is enough margin in handling raw grain to sustain a co-op.
“That’s part of why Saskatchewan Wheat Pool has had the financial problem it’s had,” he said of the low-margin commodity business.
The conditions for starting the pool in 1923 don’t necessarily exist today, Fairbairn added.
“I hear less in the way of complaints about monopolistic practices and the private grain trade … which were all in the air in the 1920s,” he said.
Still, he said, farmers have lost the influence of the dairy co-ops and the wheat pools and need to look at opportunities to gain more control by working together.
“In agriculture today it probably is important for producers to co-operate,” he said. “The question is what form that will take.”
Dutchak said the idea of forming a new pool first surfaced during the 1996 discussion to take the pool public. It arose again during the 2003 restructuring.
“People said, ‘we’re not a co-op, we need to start over again’ but we couldn’t do anything until it was over,” he said. “Now it’s truly over.”
