The Key to the Wheat Puzzle

A forthright statement of the need for mass production methods on the grain farm

PAUL ARNOLD August 15 1930

The Key to the Wheat Puzzle

A forthright statement of the need for mass production methods on the grain farm

PAUL ARNOLD August 15 1930

The Key to the Wheat Puzzle

A forthright statement of the need for mass production methods on the grain farm


THE Canadian prairies have been called the "World’s Bread Basket,” "Canada’s Fortune,” and other euphonious names slightly misleading. However, the production of wheat has played so large a part in the economic development of Canada that all thinking people at some time or other have turned their thoughts toward the problems confronting the western farmer.

Climate always has been a problem and still is, but science has gone a long way toward overcoming this particular obstacle. The plant breeder has provided new varieties of wheat which now are grown on areas which years ago were believed to be useless for wheat growing. Government, through the agricultural services, has demonstrated how the handicap of idleness during the winter months can be overcome by the practice of mixed farming. Beef cattle, dairy herds, hogs, sheep have been shown to be profitable, and the more enterprising farmers have been quick to perceive their advantages as supplementary sources of revenue.

Labor has long been a problem owing to the seasonal nature of the demand, but here again the more enlightened farmer employers have shown that the labor difficulty is not insurmountable.

Marketing of the crop always has been a problem and still is, but thanks to the co-operative movement and the Wheat Pool which grew out of it, marketing is less of a problem than it was.

Much has been accomplished in these and other directions to the benefit of King Wheat, but still the fact remains that King Wheat is sick. And his sickness at the moment is the West’s greatest problem.

Fundamentally, I think the difficulty is one of production costs and the question I want to discuss here is: “Can the costs of our farm produce be reduced by any appreciable percentage?”

To live, the West has to sell its farm produce at a profit. In other industries when the profits dwindle toward the danger line, expert advice is sought to reduce the costs of production. If all internal defects are remedied and a loss is still shown, further economy is attempted by amalgamation with other firms; and should this prove ineffective, then all concerns producing similar lines are approached to effect an agreement over prices.

Not so with the farmer. Our first effort was to establish a “producers’ agreement” governing the sale of our wheat. If in the present gigantic struggle between the wheat buyers and the Wheat Pool the Pool should win, we will have a situation resembling the old monopoly days, when the price of a commodity was not set according to the cost of its production. Going a little farther, should Argentina and the other wheat-producing countries adopt the co-operative marketing scheme a tremendous power will be placed in the hands of a few. Why should the peoples of the world pay for a possible lack of efficiency in production?

Regardless of how the present deadlock ends, the Pool will not be "broke.” It receives wheat but it does not guarantee to pay any fixed sum for the wheat; it will pay only whatever it gets.

By virtue of this financial arrangement the Pool has grown to be a “Fellow of the Big Business Circle.” It differs from other Big Businesses, however, in one respect; they know the cost of the articles they have to sell whereas the Pool can venture only a guess—at that, the Pool’s guess with very few exceptions is closer than the guess of the farmer members. But any co-operative selling which considers the producer only is one-sided and bound to create dissatisfaction. When the Pool realizes that the consumer as well as the producer should be considered, it will have a new conception of what co-operation really means. That isn’t sentimentality; it is business and in business vernacular it is called goodwill. It is interesting though regrettable to see that the European millers bear very little goodwill toward the Canadian Pool at present.

The Advantages of Large-Scale Production

nPHOSE who have taken a trip through -*• any of our large industries and seen the different processes through which an article has to pass and then heard the price at which the finished product is sold, are often surprised into saying: "How can they do it?”

Among other reasons such as large turnover, large buying power, which easily could be adapted to farming on a larger scale, we'hear them say: “There is no guesswork.” Specialists are employed in each department, and whenever a problem arises it is referred to the man who is most capable of finding a solution. Since a farmer operates on too small a scale to permit the services of specialists, and since the Government Experimental Stations cannot send representatives to give the required information on the spot, to be really efficient the farmer himself would have to be a plant pathologist, a soil expert, a master mechanic, a veterinary surgeon, an engineer, and so on ad infinitum.

On the contrary, most farmers are "handy men” who upon close inspection are seen to be profoundly ignorant of the elementary things vital to their business. Few farmers are able to identify ten per cent of the weeds prevalent in their districts. The principles governing crop rotation are quite beyond their comprehension. Half of them have never seen a bulletin or pamphlet published by the Department of Agriculture, and one old fellow' of my acquaintance is positive that wild oats will “tame themselves” in a couple of years. How can such people be expected to manage farms and turn out a product at an equitable price? During the spring of a few years ago, the Department of Agriculture made a careful survey of the seed sown. The percentage of foul and degenerated seed used was surprising, and in most cases it was ignorance which caused this abusive practice. But all these losses may be obviated in time through the present educational agencies. Other losses cannot be avoided through education alone; they require a change of organization. Among them we find the waste of man power and horsepower which is directly attributable to the limitations of our present "unit farm”—the half section.

A farmer is reluctant to place any value on his time, since to his mind costs represent an immediate cash transaction. A positive confirmation of this would be to ask any farmer a comparative question which indirectly reveals the valuation he does put on his time. You will be surprised to find that an alternative which saves enough cash to allow him five cents an hour for wages is considered good business. Time being cheap, he uses it freely and as a consequence wre find innumerable makeshifts. We see the pitiful sight of a farmer trying to eradicate couch grass with a disc harrow to save the price of a more suitable implement. If he is persistent he will kill the weed in time, but the labor involved is four or five times greater than would be the case had he the right sort of cultivator.

A farm has a peculiar lack of balance in its equipment. It is stocked with implements which are used for very short periods each year, for example, a drill. If the owner had the land, he could cover two or three times the acreage he farms, with the equipment he has. At the same time other implements he should have he is not able to buy owing to the small scale of his operations. This is particularly evident in the matter of transportation. A small farm is not able to support a truck; the owner is compelled to jog along for half a day behind a team to deliver a load of produce which could be done in half an hour by truck and with half the expense. Yet strange to say, should he find himself in a position to buy either a $1,000 truck or a $1,500 automobile, the truck invariably loses!

Various organizations have tried to induce the farmer to keep accounts. They have prepared account books especially adapted to farm use and distributed them free; but with little success. When a note is due the farmer pays it if he can. At the end of the year, if he has any money over after all bills are paid, that represents profit. He couldn’t say which branch of his business made the money or which branch, if any, showed a loss. It may be that he is keeping a herd of cows and actually losing money on them. Since he raises his own feed, the loss doesn’t show until a dry year compels him to buy feed. Even then, the chances are that he will blame the obvious loss on the high price of feed, and makes no attempt to improve his herd. It is a significant fact, often overlooked, that the average farmer is a very poor business man, and yet it is almost axiomatic to say that the first requisite to farming is a sound knowledge of the elementary principles of business. In an honest endeavor to make up for this deficiency he will toil hour after hour in some futile effort.

Corporation Farming

ONE of the queerest anomalies we have today is our present farm organization. The oldest industry of all, it has not yet adopted the methods which made possible the existence of one of our youngest industries—the manufacture of the motor car. Thousands of years ago when man was just emerging from the forest, a savage gave birth to a thought which is the father of agriculture. This savage and his family began to till the soil. Today we have the “farmer family” still with us, a smug, self-contained unit which looks upon even the executive of a large corporation as someone who has to "work to a whistle!” At last he has found that he is not independent of his neighbors. WThen the sun ripened his crops it ripened the crops of thousands of other farmers. W7hen he had wheat to sell there were thousands of others offering wheat for sale, and naturally the price dropped. It took many years for this to dawn on him, and even now there are many who still believe that the railways, the banks, and the grain buyers all work in a combine to pound down the price of wheat in the fall. Just as soon as the majority realized they were cutting each others’ throats with the annual “dump,” they saw the finger of necessity pointing to co-operative marketing. For a while this has satisfied the farmer; but the world has arisen against this system. Consumers point to the inefficiency of the small farm and protest, rightly so, against an organization which is attempting a monopoly. If it were a monopoly it would be unfortunate for the world; but there are other countries where the standard of living is lower than in Canada, where it is possible with this cheap labor to produce w'heat at a lower cost than we, the members of the Canadian Pools, are able to produce it. Our officials have seen this source of danger for some time. We have had representatives in Argentina to try to establish a co-operative movement there, nominally to raise their standard of living, but also to maintain our own. Our efforts are wasted; we should set our own house in order first.

At present there is no controlled pro duction: each farmer attempts to raise whatever commodity is impressed on his mind in the most favorable light. Largely due to the prominence given to the Wheat Po&s in all our newspapers, wheat has been intensively advertised, and our overproduction of wheat is another strik ing proof of what may be accomplished by advertising. One of our immediate neces sities is to control the production of wheat to suit the demand. A World Wheat Pool cannot solve the problem. This has been tried already by the coffee producers with disastrous results, and yet it would seem an obvious fact to anyone that the accumulation of a surplus cannot go on indefinitely without having a bearing on the price. Necessity has driven us to co-operative marketing; greater necessity will drive us to co-operative producing. Y e must amalgamate, form our companies, lay down our rules, employ efficient managers and obey them. All modern practices of value must be adopted. By amalgamation we increase our buying power and decrease our operating expenses. A large company is not dependent on any one crop or even one season; it operates on the law of averages. An association of farming companies could maintain a positive control on production, so the price of any one product will not be excessively high nor the price of another ridiculously low.

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Those who are inclined to point to previous failures in corporation farming will be surprised to hear the progress made in this direction across the line. There are over 9,000 farming corporations in the United States with an average turnover for 1928 of $80,000 each. From this it is apparent that some of these concerns were small, but they have taken a step in the right direction.

The remedy is in our own hands; outside assistance will be futile since it will savor of coercion. However it must be remembered that the mere formation of a large company will not solve the problem automatically. A great deal will depend on its management.

The Farm of the Future

rT'HE farm of the future will be a wonderful place. It will be large enough to employ the services of specialists in all departments necessary to its existence. We will find plant pathologists, soil experts, mechanics, veterinary surgeons, engineers and biologists on the western prairies and they will be working for corporations under the guidance of general managers who will plan the operations carefully so there is an even distribution of labor throughout the year. When that time comes Canada’s employment problem will be solved. That time will come as soon as the farmer sees that “independence” is a myth, and working to a whistle may be quite agreeable.

Whereas individual localities will have their peculiar problems, generally speaking, the foundation of these companies will be built on mixed farming. The soil wdll not be “mined,” the conservation of its fertile elements will be considered and future generations will have cause to thank us.

When that time comes, gone will be the romance and glamor to wheat. It will find its level with the humble chicken and we shall hear it spoken of as “The Late King Wheat.”