DAVIDSON, Sask. — If every member of Saskatchewan Wheat Wheat Pool was like Alex Thompson, there would be no need to change the company’s financial structure.
Unfortunately, said pool director Ken Elder, they’re not.
Thompson, a long-time pool patron and former delegate, delivered an impassioned plea at a meeting here last week for pool officials to abandon the plan to convert pool equity into share capital that would be traded on the Toronto Stock Exchange.
Selling shares to the public will deliver the pool into the hands of outside investors and will change the essential nature of the 70-year-old grain handling co-operative, he said.
Read Also
Alberta crop diversification centres receive funding
$5.2 million of provincial funding pumped into crop diversity research centres
“I think we have compromised our principles,” he told the 25 farmers and pool officials in attendance.
But Elder told Thompson that farmers like him are few and far between.
“If every member was as dedicated to co-operatives as you are, it wouldn’t be necessary to bring this proposal to change Sask Wheat Pool,” Elder told Thompson. “But unfortunately, that’s not true.”
Once upon a time, the pool sign on an elevator was enough to guarantee 50 percent of the grain business in a town. A good manager would have no trouble grabbing 70 or 80 percent of the market share.
But today’s younger farmers and pool members are different, said Elder. They’re struggling for survival, they’re impatient and they’re always shopping around for the best deal. They won’t give a company their business just because of the sign over the door or the promise of a payout in 30 or 40 years.
“The loyalty just isn’t there the same as it was before,” he said. “Tell a 25-year-old he can get his equity out from the pool at age 65 and he’s not interested.”
Pool officials told the meeting that by converting members’ equity into share capital, the company will no longer have to pay out millions of dollars annually to eligible members.
The company will gain access to more funds, whether through borrowing or by issuing new shares to the public, and that will allow it to improve facilities, invest in new businesses and earn greater profits.
Farmers will have more incentive to deliver, they said, because the more money the pool makes, the more shares will be worth. And the company will have more flexibility to offer special marketing incentives to attract new business.
Elder said patronage dividends have been a great tool in the past to encourage participation in the company, but marketing incentives can do the same thing.
Young farmers in favor
Les Johnson of Davidson said in his discussions with area members, those over age 55 are generally opposed to the share proposal, while younger farmers are strongly in favor.
With nearly half the pool’s members over age 55, the pool is facing the prospect of paying out more than $100 million in equity in the next 10 to 15 years. Young members realize that if nothing changes, by the time they’re in a position to collect their equity, the pool may not be able to pay it.
“You fellows will get it,” he told some of the older members in the crowd, “but by the time it gets to us it won’t be there anymore.”
Several farmers at the Davidson meeting said that while they didn’t like the idea very much, the pool probably has no choice but to proceed with the changes. Elder said that attitude is also evident at the company’s highest levels.
“It is with some regret, I think, for all of the board to make these fundamental changes in the organization,” he said.
