Cargill: Canadian Wheat

September 25, 2007

The family farm(*) in America today is an endangered species as modern agribusiness consolidates its hold over the agricultural economy. In the past year, the newly formed American Agriculture Movement has mobilized small and medium sized farmers who confront the worst economic conditions since the Great Depression. Faced with the spiraling cost of corporate- produced agricultural inputs (tractors, fertilizers and pesticides), and the decline in the price of basic agricultural commodities like wheat and corn (wheat prices have dropped over 50 percent since 1973), many family farms are being forced into bankruptcy while large- scale, corporate farms assume increasing importance.

(*) The size of the family farm can vary from less than a hundred acres to more than a thousand, depending on the region, the fertility of the soil and the crops grown. Here family farm means an agricultural unit that is owned and operated largely by the members of the family and that uses
little hired help.

The anger of these farmers has led them to storm through the halls of the U.S. Department of Agriculture and to protest in
front of the Chicago Board of Trade, the bastion of the monied
interests that speculate on agricultural commodities. This farm militancy, while not questioning the very dynamics of capitalism which continually drive out the smallest farm producers, is nonetheless significant because it focuses attention on the crisis in the country's agricultural

Family farmers in the United States are not the only ones
threatened by the continued growth of corporate agriculture.
In recent years, U.S. agribusiness corporations like Del Monte, Quaker Oats, and International Multifoods have expanded rapidly in Canada. One U.S. corporation more than any other -
Cargill - exemplifies the efforts of U.S. agribusiness to undermine small Canadian farmers. The largest grain trading corporation in the world, Cargill is maneuvering to gain an ascendant position in the Canadian market.


Historically, Canadian farmers have exercised more control over the marketing of their grain than have U.S. farmers. More opposed to big business than their counterparts south of the border, Canadian farmers, in response to price gouging and speculation by private grain companies, organized marketing cooperatives in the first quarter of this century to transport and sell their grain. The cooperatives grew rapidly, and became especially strong in Canada's three major wheat producing provinces --- Alberta, Saskatchewan, and Manitoba. The subsequent establishment of the Wheat Board by the Canadian government aided the cooperatives by regulating the internal marketing of grain and by controlling the country's grain exports. To this day the Wheat Board, rather than private grain trading companies, negotiates the export contracts for most of Canada's wheat.

In the 1970s, however, Cargill has been moving aggressively to
undermine this system of grain handling. Firmly implanted in all of the other major grain exporting markets of the world (the United States, Argentina, Australia, France, and Brazil),
Cargill in 1974 became a major force in the Canadian grain trade by acquiring the National Grain Company, a firm that owned a number of grain elevators, five feed manufacturing plants, and port facilities at Vancouver and Thunder Bay in Canada.

As part of its expansionist strategy, Cargill is building large scale regional grain terminals that bypass the smaller rural country elevators located in most of the farm communities and owned by the cooperatives. Cargill's regional terminals favor the large scale farmers who can buy or contract for trailer trucks to haul their grain long distances
to the terminals where they receive premium prices that
compensate for the shipping costs. Thus Cargill's operations
are not only undermining the cooperatives, but also the smaller farmers who receive less for their grain because they can't ship to the terminals.

Cargill is also moving to limit the marketing powers of the
Wheat Board. Once particular grains are removed from the jurisdiction of the Wheat Board. Cargill is better able to manipulate the market and dominate it. Rapeseed, a grain used to make vegetable oil, is not controlled by the board, and Cargill has moved quickly to become a major force in rapeseed marketing. Cargill is also gaining influence within the Wheat
Board. A former executive of the company now sits on an
advisory commission of the Board, and Cargill is also being
given an increasing number of the Board's contracts for shipping Canadian grain abroad. According to a company source,
Cargill already transports over 25 percent of the grain that is exported by the Wheat Board.


Farmers in Canada are organizing to resist Cargill's advances.
As one farmer said, "We have to keep control of our own grain
elevator system. Once Cargill becomes stronger and wipes out
the cooperatives, the company will act as a monopoly and
control our grain prices. We've got to fight Cargill now." The
campaign against Cargill is coordinated by Canada's militant
farm organization, the National Farmers Union. Ever since Cargill's acquisition of grain elevators in 1974, the National Farmers Union has organized demonstrations against the company, persuaded farmers not to sell to Cargill, and has undertaken an educational campaign to inform Canadian farmers how a powerful corporation like Cargill manipulates international grain prices.

Cargill has a major ally in its efforts to undermine the farm
protest - the government of Prime Minister Pierre Trudeau.
Trudeau, while proclaiming his intention to protect "national
interests," continues to permit multinational corporations like Cargill to expand their influence in the Canadian economy. The Trudeau government has also moved against the National Farmers Union. In the early seventies it was discovered that agents of the Royal Canadian Mounted Police were working in the National Farmers Union to gain information on the militant activities of the farmers.

The farmers realize that their very livelihood is threatened by the activities of Cargill and the Trudeau government. As one farmer succinctly noted, "If Cargill gets its way here, the smaller farmers are going to be forced out." Another farmer observed, "Our fight here is similar to that of the American Agriculture Movement in the United States. We've got to coordinate our actions to get rid of the monopolies that dominate our lives on both sides of the border." To come to grips with the fundamental problems they face, farmers in Canada and the United States will have to challenge the monopolies and the very economic system of which they are a part.

Tags: agribusiness, Canada, Cargill wheat, multinationals

Like this article? Support our work. Donate now.