PRB 98-2E
DATES OF HISTORICAL INTEREST
Prepared by:
Sonya Dakers, Science and Technology Division
Jean-Denis Fréchette, Economics Division
September 1998
1891 -
Winnipeg Grain and Produce Exchange incorporated.
1892 -
Development of Marquis wheat at Agriculture Canada’s Central Experimental Farm.
1904 -
Beginning of futures trading at the Winnipeg Exchange.
1905 to 1910 -
Farmers developed elevator companies. The Grain Growers’ Grain Company, the
Saskatchewan Co-operative Elevator Company and the Alberta Farmers’ Co-operative
Elevator Company were created.
1912 - The Canada
Grain Act was passed, establishing the Canadian Grain Commission which focused on
grain quality. New grain varieties must be equal or better than those existing and must be
visually distinguishable.
1917 - United
Grain Growers was constituted.
1917 to 1919 -
Because of WWI, the Winnipeg Exchange was closed and the government centralized grain
buying and guaranteed a price for domestic and export sales. This prompted producers to
think about a more centralized selling agency.
1919 - A board
was established specifically to market the 1919 wheat crop.
Early 1920s -
Although the government had viewed the board solely as a wartime measure, farmers called
for the re-establishment of the marketing agency. The Central Selling Agency (CSA) was
created by three growers’ elevator companies that put together their resources and
contacts overseas to sell wheat direct to foreign customers. An initial payout was
financed through bank loans and any surpluses were paid as a final payment.
- The three
pool elevator companies were established.
Early 1930s -
The CSA operated by co-ops marketed half of the wheat production but when wheat prices
collapsed in 1929, the provinces were to underwrite the CSA. Further losses in 1930 forced
the federal government’s intervention. It took until 1935 to liquidate the 1928 to
1930 crops.
1933 - First
International Wheat Agreement established a minimum price and export quotas, but the
agreement did not last.
1935 - The Canadian
Wheat Board Act established a voluntary marketing agency. The Act provided for an
initial price and allowed the Canadian Wheat Board to sell grain anywhere in the world at
market prices. The Board incurred a loss of $11.9 million in its first year. In
consequence, the government limited the payment to $0.875 per bushel, only if the market
price fell below a $0.90 per bushel level. In other words, the government set a floor
price for wheat. During this period, when poor crops kept prices high, farmers shipped
their wheat through the open market so that the CWB did not receive much wheat.
1939 - World
prices declined below the floor price of $0.90 per bushel level and the CWB, forced to pay
the price established by the Act, consequently received the bulk of the crop and faced a
loss of $60 million. The government amended the Act to limit purchases to 5,000 bushels
per farmer and to reduce the support price.
1940 - WWII
prevented grain from being marketed in Europe, which resulted in surpluses and in the need
for more storage space. The CWB developed an acreage delivery system.
1942 - The CWB
took control of the allocation of railway boxcars.
1943 - The CWB
became a monopoly and marketing through it became compulsory.
1946 - A
contract to deliver 600 million bushels of wheat in four years was signed with the U.K.
1949 - Oats
and barley were added to the jurisdiction of the CWB. Eastern users of feed grains were
concerned about increasing prices. The Canadian Federation of Agriculture examined the
situation, but was unable to find an equitable pricing policy. Eastern users asked for the
removal of oats and barley from the CWB.
- The
Chorleywood baking test allowed the production of bread with less wheat protein. This had
an impact on Canadian hard red spring wheat.
1955 to 1965 -
The CWB was able to use access to government credit as a marketing tool to make major
sales to central buying agencies like Japan, China, Russia and Poland.
1967 -
Sections of the CWB Act requiring a formal review of the CWB’s legislative
powers every five years were repealed.
1970 - To
reduce shipping time and enhance marketing operations, the grain industry adopted a block
shipping system for car allocation.
- A set-aside
program called LIFT (Lower Inventories for Tomorrow) was introduced and was triggered when
carryover stocks exceeded 27 million tonnes. The result was immediate; seeded wheat
acreage dropped by half in that year.
1971 - The
two-price wheat policy, which set a floor and a ceiling price for domestic millers, was
introduced.
1973-1974 - As
a result of a new domestic feed grain policy, interprovincial movement of feed grains was
allowed and the private sector carried out sales of feed grain. As of the 1974-75 crop
year, the CWB only remained in charge of export charges for feed grains.
- The results
of a plebiscite conducted by the federal government showed that 53% of farmers favoured an
open market system for rapeseed (canola) trading.
- The federal
government purchased its first hopper cars to replace the old boxcars.
1976 - The
Western Grain Stabilization Program was introduced.
1978 - By
changing the fatty acid composition of rapeseed, plant breeders created a new seed called
canola.
1979 - The
Grain Transportation Agency was created to manage the hopper car fleet.
1980s - Export
subsidies allowed Europe to become a major competitor on the world grain market.
-
Herbicide-resistant canola was developed.
1983 - The Western
Grain Transportation Act (WGTA) was passed and replaced the Crow’s Nest Pass,
which had maintained railway rates at the same levels since the last century.
1985 - With
European markets becoming less attractive, Canadian grain exports were targeted to Asia.
As a result, Thunder Bay, which had historically handled 70% to 80% of the grain, saw its
share to decline to 40%.
- The
reluctance of the railways to replace the old boxcar fleet and bottlenecks in grain
transportation forced the federal government, along with the Alberta and Saskatchewan
governments, to purchase new steel hopper cars.
- Canola oil
received "Generally Recognized as Safe" (GRAS) status from the United States
Food and Drug Administration. This was the trigger for a booming market for canola oil.
1989 - Oats,
accounting for less than one-half of one per cent of the CWB’s business, were removed
from the CWB’s jurisdiction.
- The
Canada-United States Free Trade Agreement (CUSTA) was signed by both countries which
agreed to remove all tariffs and import restrictions over a ten-year period. However, in
the case of wheat and barley it was agreed that border restrictions would be removed when
subsidies were equivalent in both countries. End use certificates were used to prevent
mixing of Canadian and U.S. grains. CUSTA also meant the end of the two-price wheat policy
and eliminated the WGTA subsidy paid on grain shipped to the U.S. through Vancouver.
- The
federal-provincial Agri-Food Policy Review on industry competitiveness was launched.
1990 - The CWB
initiated its Review Panel which recommended substantial changes in order to restructure
the CWB and make it look more like other international business organizations. However,
the Panel concluded that dual marketing and price pooling were incompatible since the CWB
would not receive enough volume when grain prices were high.
1991 - Canada
implemented two new generations of farm income safety nets, the Gross Revenue Insurance
Plan (GRIP) and the Net Income Stabilization Account (NISA), in order to counter massive
grain subsidies in the world market.
1992 -
Agriculture Canada’s regulatory review called for increased user fees and less
regulation.
- A Round
Table on Barley examined the pros and cons of a continental barley market.
- Sales of
grain, particularly durum wheat, to the U.S. created a major irritant between the two
countries.
- A
farmer-owned co-operative, United Grain Growers (UGG) became a public company.
1993 - For a
short period between 1 August and 10 September, the North American barley market was
operational. Barley exports became once again the sole responsibility of the CWB when a
court ruled that a continental barley market was illegal under the CWB Act.
- The North
American Free Trade Agreement (NAFTA) was signed by Canada, the United States and Mexico.
- A
Canada-U.S. panel, established under the CUSTA, recommended an audit of Canadian durum
exports to the U.S.
- Subsidies
under the WGTA were cut by 15%.
1994 - The
Uruguay Round of the GATT was concluded. All contracting parties agreed to reduce export
subsidies by 21% in volume and by 36% in dollar terms, and to reduce domestic support by
20% over a six-year period beginning in 1995.
- On 10
September, Canada and the U.S. signed an agreement to limit Canadian wheat exports (durum
and other varieties) to the U.S. to 1.5 million tonnes for a one-year period. The
Agreement also called for the establishment of a Canada-U.S. Joint Commission on Grains
(Blue Ribbon) to examine the grain marketing and pricing systems in the two countries with
the goal of making recommendations for reducing trade irritants.
- Dual
marketing was a developing scheme.
1995 - To
conform with GATT requirements, the federal government eliminated the WGTA but compensated
grain producers with an ex gratia capital payment of $1.6 billion.
- The federal
Minister of Agriculture established the Western Grain Marketing Panel (WGMP) with the
mandate to examine the complex business of grain marketing in Canada.
- A group of
dissident farmers called "Farmers for Justice" crossed the Canada-U.S. border
with shipments of grain that did not have proper CWB export permits.
1996 - After
15 "town hall" meetings, 12 days of public hearings in the Prairies, six major
research projects, and 147 written submissions, the Western Grain Marketing Panel
published its report on 9 July.
- The
farmer-owned co-operative Saskatchewan Wheat Pool was transformed into a publicly traded
company.
- Although it
remains non-operational, "dual marketing" became part of the common language of
the grain industry.
- On 3
December 1997, the federal government introduced Bill C-72, An Act to amend the Canadian
Wheat Board Act and to make consequential amendments to other Acts (see LS-281E).
1997 - In
February, Alberta Wheat Pool and Manitoba Pool Elevators launched a hostile and
unsuccessful takeover bid for the UGG.
- On 25 March,
the results of the producer vote on the Prairie barley marketing were published: 37.1% of
producers voted for an open market and 62.9% voted for single-desk selling.
- On 16 April,
the House of Commons Standing Committee on Agriculture and Agri-Food reported Bill C-72 to
Parliament with amendments, notably to clarify that a majority of ten directors would be
elected to the board by producers and that the board would be responsible for designating
one director as chairperson. Because Parliament was dissolved for the election of
2 June 1997, it did not have time to examine Bill C-72 further.
- On
25 September, Bill C-4, An Act to amend the Canadian Wheat Board Act and to make
consequential amendments to other Acts, received first reading in the House of Commons.
- On
7 November, the House of Commons Standing Committee on Agriculture and Agri-Food
reported back the bill to the House of Commons.
1998 - In
March and April, the Standing Senate Committee on Agriculture and Forestry held public
hearings in the Prairies.
- On
14 May, the Standing Senate Committee tabled its report in the Senate, which included
three major amendments to Bill C-4.
- On
11 June, Bill C-4 received Royal Assent.
1876 - First shipment of
prairie wheat to Eastern Canada.
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