How fitting that the only remaining symbol of the venerable Saskatchewan Wheat Pool are the letters SWP, used for shares traded on the Toronto Stock Exchange. The company is now formally called Viterra after having purchased Agricore United. So all the institutions reflecting the desire of western Canadian farmers to change the balance of economic power in farming, the Alberta Wheat Pool, the Manitoba Pool Exchange, United Grain Growers (all combined in Agricore United), and the Saskatchewan Wheat Pool, have now disappeared. I have no doubt that Viterra will be good at its job. It’s just that it is now doing a different job than the old farmer owned cooperatives did. Encouraging cooperation among farmers is no longer their mission, increasing return on investment for shareholders is.
The shift in name reflects a shift in values and that shift in values took place a long time ago. It took place over ten years ago when Saskatchewan Wheat Pool changed from a cooperative organization owned by its farmer-members to a competitive enterprise owned by its shareholders.
Values exist within institutions because they direct human behaviour; they help to organize and direct our resources. Institutions need to educate about and review their values on a regular basis for at least two reasons. Activities evolve over time and can become disconnected from values. In this case our activities need to be revised. Cultures also evolve over time and values are always understood in relation to culture. When values become disconnected from culture, the values need to be re-interpreted. Institutions that fail to educate about values can have members who are not committed to them. Institutions that fail to review their values can have practices that don’t make any sense.
When the Saskatchewan Wheat Pool transformed itself from a farmer owned cooperative to a shareholder owned agribusiness, the rationale was one of financial necessity – the business environment had changed, the Pool needed capital and the best way to get it was from the equity markets. However, the debate was carefully managed and many dissenters felt they weren’t given a full opportunity to make an alternative case. Another way to think about that event was to say that there was already a disconnect within the organization between values and practice. The reorganization was a realignment based on a different set of values.
Education is one of the seven values adhered to by cooperatives, as defined by the International Cooperative Association. The seven values together are:
Voluntary and open membership.
Democratic member control.
Member economic participation.
Autonomy and independence.
Education, training, and information.
Cooperation among cooperatives.
Concern for community.
So here’s a question for farmers and former members of the various cooperative organizations that died in order to make Viterra possible. When did the education and review of cooperative principles stop happening?
We have lots of other cooperative organizations in our society. Maybe the best examples are the credit unions that emerged in the same period of Canadian history as the wheat pools.
The first Canadian credit union was organized in 1900. Now almost 1 in 6 Canadians belong to one and they join 136 million people in 91 countries who do the same. In a recent survey a majority of Canadians reported that they received better service from credit unions than any of the banks. Forty years ago it would have been impossible to imagine the Saskatchewan Wheat Pool no longer being a cooperative. Could the same thing happen to the credit union movement?
1 comment:
First, Viterra (the operating name for Saskatchewan Wheat Pool) no longer trades as SWP. Its trading symbol is VT.
But that is immaterial to the issue.
The most salient issue you raise, I think, is the issue of cooperation among farmers as ultimately their best strategy to compete in the marketplace. And secondly, their cooperative institutions are among other the options, best able to help them do so.
History seems to have proven that the premise doesn't hold. Many farmer cooperatives have either failed or transformed into a shareholder owned entity. And farmer members have often been left holding little of any value once the transformations were complete. Successful farmers are everywhere, many never having clamored aboard the co-op movement. In fact, arguably the most successful farmers shunned the movement in favour of direct business relationships with other industry participants, or moving up the value chain themselves or in a business partnerships with others, proportionate to their investment. The Co-op ‘movement’, as it is often referred to by its adherents, stumbled because of its politicization.
In today’s business climate, perhaps even more so than when the Co-ops were first formed, competitiveness will be achieved by those most able to compete head-on with well capitalized and technological savvy competitors around the world. “Democracy”, laudable in terms of national and civic matters, is unsuited to the cut and thrust of commerce. And Co-ops who mix their legitimate business affairs with politics, lose their focus and doom themselves to irrelevancy.
But, would we want it any other way? After all, the major preoccupation of moral human kind is to make the world a better place for themselves and their communities. What better way to raise our living standards than to govern yourselves in civic and societal matters with a healthy democracy, and leave commercial issues in the hands of those whose success is achieved by being the best at what they do.
Will the Credit Unions go the way of the farmer Co-ops? It’s hard to say, but if they do it will be because they no longer measure up the way the survey you refer to now measures them. And if that happens, should we mourn their loss? I won’t. For me, Co-ops and Credit Unions are not ends unto themselves. They are tools to achieve an end, and if they are no longer useful in that way, they cease to have any value at all. Their loss of value, predictably, will be preceded by politicization. If Saskatchewan Wheat Pool history is any lesson, that should be it.
The seven principles you cite, while laudable, first cannot carry a commercial enterprise, and second, are not all unique to Co-ops. They might make one feel virtuous, but that’s as much as they will accomplish. The basis of the traditional Co-op was governance by democracy and recognition of economic participation through profit sharing - the 2nd and 3rd principles. This has proven to be an incompatible mix. Cooperation among cooperatives (6 of 7) is self-serving among the cooperatives themselves, doing their members little if any good.
In the end, competitive drive, coupled with good corporate and civic values are the cornerstones of successful enterprise, be it a small Saskatchewan farm, or a highly capital intensive business. And through the last 300 or so years of democratic society, it’s that business model, coupled with democratic government, which has been chiefly responsible for a living standard that keeps rising.
Co-ops can do well when they understand their basic role. They fail when they think they are an end unto themselves.
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