This document summarizes the challenges facing Manitoba farmers after the loss of the "crow rate" shipping subsidy in 1987. With wheat farming no longer profitable, farmers diversified into new crops like canola and livestock like beef and hogs. However, some diversification efforts like bison and ostrich farming initially saw high production and falling prices. The document discusses the debate around government support for farmers, with some arguing for more support of traditional wheat farming while others see potential in supporting new ventures through information and grants. Overall, farmers have struggled with this transition but some are finding new opportunities through diversification, cooperation, and exploring crops and livestock with stable markets.

1. Three part-series published on page 1 of the Manitoba Co-operator (agricultural
newspaper) in March 2003. (hard copy to follow)
Part One
Diversify, diversify, diversify. It’s the mantra of government agricultural policy makers;
the cure-all for the ailments of farmers in western Canada.
But where has it gotten farmers?
The almighty wheat was once the primary crop in Manitoba. But a combination of the
loss of the crow rate in 1987 and fluctuating prices on the international market throughout
the 1990s have caused farmers to diversify their crops or move into livestock production.
In 1990, 5.45 million hectares of wheat were harvested in Manitoba. By 2000, that figure
had dropped to 3.89 million hectares.
Almost three-quarters of Manitoba farms were classified as either predominantly wheat,
other grains and oilseeds or cattle farms in 1996 and 2001. Wheat farms made up only
10 percent of all farms with gross sales over $2,500, other grain and oilseed farms
comprised 27 percent, while cattle farms were 36 percent of the total.--from the
Government of Manitoba’s “Manitoba Agricultural Review” web site at
www.gov.mb.ca/agriculture/statistics/aac01s01.html
In its place are a variety of crops, Canola being the most popular, and livestock
operations, with beef being the strongest, while hog farming grows at a quick pace.
“When the crow disappeared, grain prices weren’t too bad at that time, so the impact
wasn’t felt,” says John Corbey, the Southwestern specialist for Agri-Ventures. “A couple
of years later, grain prices fell.”
Without the crow, shipping grain was no longer feasible considering the tight margins
already faced by grain farmers. So farmers now had two choices: diversify or create
added value. Farmers could diversify primarily by planting new, more valuable crops;
moving into livestock production; or growing forage crops for livestock. Or they could
add value by developing the manufacturing sector in their area, often through community
co-operatives.
In response to several requests for information, Corbey says, the government created
“Agri-Ventures,” an information and marketing service designed to help farmers research
new ventures, like diversifying their crop or livestock production and/or developing
added value through local manufacturing.
“Some people that are already into livestock expanded,” says Corbey. “Others that didn’t
have livestock, got into beef or hog production.”

2. Other farmers decided to take a chance on new markets; particularly in livestock.
Suddenly Manitoba farmers were raising bison, ostriches, even emus, in an attempt to
capitalize on new markets and higher value meats.
“When the conversion started, [livestock producers] were looking for a higher market
value animal. At that time, the market for bison was fairly strong. There was a lot of
production occuring” he says, and the production end of the industry expanded quickly.
Subsequently the market was flooded with the expensive meat, and prices fell.
The same thing happened with ostrich. Corbey says the problem starts with production.
“It’s a breeders’ market at the beginning,” he says. “Once the breeders’ market was
saturated, there was no demand so prices fell… The leg work of developing the market at
the other end” wasn’t being done.
He points out that this is a fundamental problem in Manitoba agriculture. “The attitude
[of farmers] was just to produced the product and then hopefully somebody would buy
it… if they start becoming more efficient and producing a lot of it and then prices fall….”
The attitude he describes is one that has been fostered in western Canada since
confederation. Farmers were encouraged to develop raw product in the west to be shipped
east in order to develop Ontario’s manufacturing sector. Financial incentives like the
crow rate, made it feasible and attractive for farmers to ship their grain within the country
and reap the rewards.
But when the crow was pulled and farmers were exposed to unregulated international
markets, they were left to deal with an economic infrastructure that was flawed from the
beginning. Where it would have been natural and efficient to ship grain south to
international waters via the Mississippi, rail lines to the US border didn’t exist, having
been discouraged by confederate government desperate to create and east-west rail
system across the country. Where it would have been natural and efficient to create a
manufacturing sector in the west, those efforts had also been discouraged, if not quashed,
by federal government.
So, farmers were left to cope with impossibly slim profit margins on the international
market for wheat. They could either produce more economically viable crops or livestock
or try to create a local manufacturing sector.
“What we’ve really seen since the loss of the crow is the transfer of power from farmers
and communities to agribusiness corporations,” says Ken Sigurdson, Regional Co-
ordinator for the National Union of Farmers. “The deregulation of the system has seen
the loss of elevators and the loss of all the coop elevators… we’re seeing communities
divided all over, hog production is a good example.
“Farmers are really losing out here…. As one new farmer told me, our governments are
just throwing us to the wolves.”

3. Corbey acknowledges the difficulty for farmers. “It’s tough to create an entire new
industry,” he says.
So what about subsidizing the existing industries. When the bison market expanded, the
US government stepped in to help by buying excess meet and incorporating it into school
lunch programs. Corbey admits that the industry is now starting to stabilize and that
“there could still be a future there.”
Corbey says that “we realize that by subsidizing someone to get them started, you’re
hurting someone else. It’s a competitive thing.”
Dr. Daryl Kraft, head of the Department of Agribusiness and Agricultural Economics at
the University of Manitoba, says that the government’s efforts to support diversification
and added value, rather than subsidization of existing industries, is the way to go to create
stability for Manitoba agriculture. But he says short term pain is long term gain.
“Supplying farmers with information, encouragement and perhaps even start up grants,”
he says, “you have to look at the probability of success in those new ventures and with
that recognize that there’s probably going to be some individuals who fail.”
“Not everybody has the management skills and the capability to pull these things off.”
But Kraft says that “if you have innovators that are successful you’ll have neighbours
who watch and adopt” their methods.
“In the short term, you’re not going to raise the income very much … but maybe over the
course of ten years time you’ll be in a better position.”
Sigurdson disagrees. “I think we need to get back to what we’ve done well here in
Manitoba. We’ve been good producers of wheat… of canola… of barley…I don’t think
we just abandon that as governments do now. I don’t think that makes any sense at all.”
He goes on to say that subsidization happens whether we like it or not, it’s just a matter
of who benefits.
“Some of the things being done in terms of value-added just border on the ridiculous,” he
says. “Ethanol is a good example. Half of the products price is going to be in subsidy.”
He also brings up the fact that the US subsidizes the corn to produce the ethanol. He says
he fears that the cheaper US corn will be brought up to fuel the ethanol plants in Canada.
It’s not a very comforting position for the farmers who are the guinea pigs for this new
future. Some have not survived. But those who do, are throwing themselves into new
ventures like community co-operatives, new livestock and crop production, and even
agri-tourism. Over the next two weeks, we’ll look at some of the individual efforts
farmers are making to re-create the rural and agricultural economy in Manitoba; and at
the future with potential benefits from ethanol production and windpower.

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