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Observations on Canadian Wheat Policy Since the World War

Published online by Cambridge University Press:  07 November 2014

Harald S. Patton
Harald S. Patton*
Affiliation:
Michigan State College
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Extract

The past two decades embrace a period in which Canada has become established (since 1922) as the premier wheat exporting nation of the world; in which wheat prices touched the highest point (September, 1920) and the lowest depth (December, 1932) in Canadian grain trade history; in which centralized co-operative pool marketing of wheat was conducted for several years on a larger scale than that of any farm product in any country; and in which the federal government has experimented with policies in relation to the marketing and price movements of wheat ranging from established regulatory functions to monopoly handling through a government board and minimum price guarantees. These two decades include three periods of favourable prices and active export demand (1917-20, 1924-9, and 1936-7), with the intervening years characterized by distress prices and restricted foreign demand. Amid these fluctuating economic conditions of the wheat industry there has occurred significant experimentation with different marketing systems, involving shifting relationships between the organized producers, the organized private trade, and the provincial and federal governments.

Type
Articles
Information
Canadian Journal of Economics and Political Science/Revue canadienne de economiques et science politique , Volume 3 , Issue 2 , May 1937 , pp. 218 - 232
Copyright
Copyright © Canadian Political Science Association 1937

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References

1 For analysis of returns of pool and non-pool farmers during 1925-8, see Patton, H. S., “The Market Influence of the Canadian Wheat Pool” (Proceedings of American Statistical Association, 03, 1929).Google Scholar

2 See in this connection, “Financial Results of Speculative Holding of Wheat” (Food Research Institute, Wheat Studies, VII (8), 07, 1931).Google Scholar

3 The bullish activity of private speculators in lifting future prices in Chicago and Winnipeg above an export parity basis, particularly in 1929, is statistically demonstrated in “Speculation, Short Selling and the Price of Wheat” (Wheat Studies, VII (4), 1931).Google Scholar

4 Ibid., p. 234.

5 It appears, however, that the Pool entered the 1929 crop year with outstanding hedges to the amount of 26 million bushels against its unsold 1928 carryover of 77 million bushels.

6 Alberta Wheat Pool Broadcast of March 26, 1931.

7 As announced by the Board, Jan. 2, 1937.

8 In Mr. Dunning's budget speech on Feb. 27, 1937, it was announced that the Wheat Board would pay back to the Treasury $8 million from profits on disposal of carryover stocks, as an offset to the loss of $11.8 million on its 1935 crop handlings.

9 These considerations are emphasized in a criticism by Taylor, A. E. of the export quota arrangements under the London Wheat Agreement, in “International Wheat Policy and Planning” (Wheat Studies, II (10), 06, 1935).Google Scholar

10 Pool sales in May, 1929, amounted to only 4½ million bushels, in August to 3.8 million, and in January and February, 1930, to but 3.6 million ( Canadian Cooperative Wheat Producers, Directors' Reports, 1929–1930).Google Scholar

11 In reviewing “The World Wheat Situation in 1929-30”, Dr. H. Working appraised the Canadian situation as follows: “In the sense that the maintenance of high prices in the face of unusually slow movements of wheat may be regarded as a holding policy, there was a holding policy participated in by practically all factors trading in Canadian wheat, but most significantly by traders in Winnipeg futures” ( Wheat Studies, VII (2), p. 140).Google Scholar

12 Evidence of P. F. Bredt before Special Committee of the House of Commons on Grain Board Bill, June 25, 1935.

13 The complete history of these stabilization operations between August 1, 1931 and May 31, 1935, was given in evidence of R. C. Findlay before Special Committee of the House of Commons on Grain Board Bill, June 27, 1935.

14 Elaborate statistical evidence for such conclusion is furnished by Evans, W. Sanford in “Canadian Wheat Stabilization Operations, 1929-35” (Wheat Studies, XII (7), 03, 1936).Google Scholar

15 The average premium of Canadian No. 3 Northern over the best Argentine wheat was 7.8 cents during 1933-4 and 10.1 cents during 1934-5, compared to premiums of between 1 and 3.3 cents during the three preceding years ( Wheat Studies, XII (2), 10, 1935, p. 46).Google Scholar

16 Dominion Bureau of Statistics, World Trade in Wheat, calendar years 1926-1935.

17 In forty of the forty-eight months of the four crop years 1930-1 to 1933-4, the average monthly Winnipeg cash prices for No. 1 Northern ranged below 70 cents, falling to as low as 42.4 cents for December, 1932.

18 For example, the gross value of manufactures of agricultural implements shrank from $40.6 million in 1929 to $5.3 million in 1933.

19 Details of such a marketing plan were presented by the writer in a formal submission and examination before the Royal Grain Inquiry Commission at Winnipeg in January, 1937.