Saskatchewan Wheat Fool

FTLComm - Regina - Friday, April 5, 2002

After some momentous failure it seems to obvious as to what happened and yet everyone realises that surely those involved in the decision making process the lead to the problem should have seen the consequences of their actions.

Before we run through the plan let us consider what the Saskatchewan Wheat Pool really was.

The disaster of the 1930s seriously affected farmers across Western Canada and the growth of the co-op movement was matching the needs of the grain growers. Working together they were able to develop a grain company that dwarfed every other Canadian grain company with profitable elevators in almost every little rail siding in the province. Then to make all this grain collection system work they had the biggest and most modern grain port handling facilities in the country. The Saskatchewan Wheat Pool, owned by its members was the most powerful and economically viable grain company in Canada.

This building at the corner of Victoria and Albert in Regina was home to that company. A company that responded and served the members who were its owners and made their wishes know through a system of local organisations, regional representatives and a provincial board of directors.

The grain company had sufficient capital to not only operate its efficient grain handling business but branched off into a wide range of subsidiaries that helped to broaden the company's financial base and provide it with profitable investment and in turn produced development for the province in general.

It would be reasonable to generalise and sum up the company's position as the largest Canadian owned grain handling company in Canada with hundreds of profitable facilities and a chain of subsidiary companies.

At this point the decision making process went off into some fanatical theory believing leaders who had bought into the American business model. It is entirely unfair to look backward at these leaders who have now been shown to be total fools but knowing what we know now there is that nagging concern that how stupid would one have to be to accomplish such magnificent failure.

Perhaps their business plan was constructed something like this:

  1. We take our big company which is member owned and turn it from a co-operative into a private share owned corporation. (Share price at the time of distribution to members $18)

  2. We need to boost our profits to make our shares more attractive.

  3. Profits can be increased if we reduce our work force.

  4. We borrow a lot of money to built huge grain terminals that employ fewer people.

  5. We close and destroy the profitable wooden grain elevators that are the backbone of the system.

  6. Debt loan can not be met with drop in market share as disgruntled members deliver to competing companies.

  7. Share prices fall to just over $2.

  8. Sell off all profitable subsidiary assets to provide payments on unsustainable debt.

  9. When debts exceed value of system turn over company to large US corporation.
The final step of the plan has not yet taken place but the demise of the Saskatchewan Wheat Corporation is a certainty. If for no other reason than the architects of this disaster are still running the operation and with their track record and clearly demonstrated incompetence, there is no other possible outcome.