Abstract

In The Rise and Fall of United Grain Growers, Paul D. Earl traces the history of that powerful western Canadian farmer cooperative and places it in the context of the broader grain industry between 1906 and 2006. This book is more than a standard business or agricultural history, however. The history of “The Company,” as Earl refers to it across its several iterations, is a window into farmers' movements, competing ideologies, corporate takeovers, legal maneuverings, economics, and government power. In addition to traditional source material, Earl leverages his experiences as a former employee of the company and his access to interviews with upper management in the early twenty-first century to produce a unique examination into what was one of the world's largest farmer-owned grain marketing entities and its transition from cooperative to shareholder-dominated corporation.In parts 1 and 2, Earl traces the history of the company and the prairie grain industry from 1906 to 1990, identifying the economic and ideological contours within which wheat marketing operated. Between 1906, when the company began operations in Winnipeg, and 1945, the grain industry shifted from a relatively open and privately controlled market in which free trade predominated to a highly regulated and centralized arena dominated by state and cooperative control. The farming and cooperative community found itself divided between advocates of laissez-faire and government marketing controls. In this period, the company, generally successful, managed to straddle the two positions and embrace elements of both. From the postwar period through the 1980s, pressures to deregulate and return to private control of the grain industry increased, caused by outdated transportation, marketing, and handling arrangements and the concomitant need to modernize and rationalize railway and elevator systems. There were no easy answers to these challenges, as the company, the wheat pools, and various government administrations wrestled with how to enact systemic reforms. The company struggled with its own modernization efforts, and its growth slowed and financial issues mounted.Part 3 of the book examines the end of the company between 1991 and 2006, when the Saskatchewan wheat pool succeeded in a takeover bid. This final third of the book is the meat of Earl's argument, where he investigates the takeover from multiple angles. He ultimately concludes that, though all sides acted in good faith, the sale of the company to the pool was not a fait accompli, and its traditional and historical cooperative role was worth saving. In this period the grain industry underwent a long, overdue massive transformation characterized by deregulation, modernization, and consolidation of grain handling systems and transportation networks. The company adapted to these changes, becoming Agricore United after a merger with the Alberta and Manitoba wheat pools in the late 1990s, and it created a hybrid management and financial structure based on public shareholding and a cooperative farmer/member-dominated board.In 2006 the Saskatchewan pool launched a takeover bid of the company. Within Agricore United, two perspectives developed, and their adherents debated the merits of the takeover. Senior management argued for the “commercial perspective”: shareholder primacy is predominant, and the company should acquiesce to the takeover on grounds that it would increase shareholder returns. Farmer-directors on the board put forth the “traditional perspective”: shareholder primacy took a back seat to preserving the company's historic role as a farmer-controlled cooperative, a business that advocated for the rural community, its members, and its customers. Earl contends that the sale of the company to the pool, which ended a century of farmer control and created a shareholder-dominated corporation, was avoidable and remains regrettable. He explains how the takeover ultimately succeeded because of a lack of leadership, internal divisions, and broader acceptance of the commercial perspective within the company.As a historian, the history of the company within the context of the western Canadian grain industry interested me greatly. This section of the book is the best current analysis of the topic. In addition, I found myself fascinated by Earl's careful delineation of the intricacies of modern corporate law, the internal workings of large-scale businesses, and the complexities and emotions tied up in takeovers and mergers. The Rise and Fall of United Grain Growers is a useful book for scholars of agriculture and business, as well as those seeking insight into policy making, the Canadian grain industry, and corporate law.

Full Text
Published version (Free)

Talk to us

Join us for a 30 min session where you can share your feedback and ask us any queries you have

Schedule a call