Wednesday, January 18, 2012

Co-operatives in Saskatchewan

Encyclopedia of Saskatchewan

George and Mary Farnsworth proudly display Co-op products, Admiral, Saskatchewan, August 1950.
Everett Baker (Saskatchewan History and Folklore Society)

Like its counterparts in England and Europe, the co-operative movement in Canada arose from a sense of exploitation. On the prairies, farmers were frustrated by the high prices being charged by bankers, railroads, elevator companies, implement manufacturers, and shopkeepers. Individuals had little control over what they paid for goods and services, or the prices they received for their products. The formation of the first co-operatives was thus fuelled by the desire of farmers to gain control over their local economies, coupled with a shared sense of the necessity for collective action.

While agitating for change in the political arena, farmers at the same time began to use co-operatives to supply themselves with goods and to help them take control of handling and marketing their produce. They formed buying clubs to make bulk purchases of farm supplies and basic commodities, and in 1906 banded together to establish the Grain Growers’ Grain Company to market their grain. In 1911, farmers launched the Saskatchewan Co-operative Elevator Company, with the aim of building an elevator system owned and controlled by farmers.

The heightened demand for Canadian produce during World War I created a favourable environment for the growth of producer and consumer co-ops, but although hundreds of co-operative associations were formed over the next few years, many did not survive the post-war depression. The successful formation of the Saskatchewan Wheat Pool in 1924 encouraged livestock, dairy, and poultry producers to form their own marketing organizations a few years later.

Surprisingly, the hardships of the 1930s strengthened the co-op movement, and co-operative methods were used to meet a wide variety of needs, including marketing, banking, insurance, the refining of oil, and provision of farm implements. That decade witnessed the birth of Consumers Co-operative Refineries, credit unions, and Canadian Co-operative Implements, at its peak one of North America’s largest farm machinery co-ops. It was also during the 1930s that the Saskatchewan Wheat Pool gave up its marketing function to the Wheat Board and developed its expertise in grain handling.

The sector made major strides during the next decade, beginning in 1940, when the western co-op wholesales came together to form Interprovincial Co-operatives Limited (IPCO). IPCO facilitated the marketing, under the familiar CO-OP label, of commodities produced and processed by co-operatives throughout the sector. In 1941, the Saskatchewan Co-operative Credit Society (today’s Credit Union Central) became English Canada’s first central credit union system. In 1944, the provincial government created the Department of Co-operation and Co-operative Development to support new and existing co-ops. That same year witnessed the amalgamation of the Co-op Refinery and Saskatchewan Co-op Wholesale into a single organization known as Saskatchewan Federated Co-operatives Ltd. (SFCL). This merger was an important step towards the establishment of an integrated co-operative retail system.

Like the 1914–18 conflict, World War II brought expanded opportunities for all types of co-operatives. Farm production co-ops were formed by veterans returning from the war. Ventures that had taken root during the Depression grew stronger and diversified, often through amalgamations. SFCL merged with the other western wholesales to form Federated Co-operatives Ltd. (FCL); the western wheat pools became members of IPCO; the Saskatchewan Wheat Pool began to diversify through joint ventures with other co-ops; and the Dairy Pool and Saskatchewan Co-op Creameries came together to form Dairy Producers Co-op. The formation of the Co-op Life Insurance Company, Co-op Trust, and the expansion of the credit union system contributed to substantial growth in the co-operative financial sector over this period. During the 1960s, health care and other community-service-based co-ops took on a more formalized structure, and by the 1980s there were co-operative organizations in almost every sector of the economy.

Although urbanization has eroded its rural base, the co-operative movement in Saskatchewan remains strong, vibrant, and innovative. And as they have done since their earliest stages, co-operatives continue to play an integral role in the social and economic development of the province. Initial forms of co-operation have evolved into an extensive network of co-operatives engaged in a wide range of activities, including agriculture and resources, community development, recreation, child care and education, wholesale and retail, financial and community service, housing, and employment.

Co-operatives play an important role at every level of the economy. A major statistical analysis done in 1998 revealed that the 1,306 co-operatives in Saskatchewan generated revenues of nearly $7 billion and controlled assets of more than $10 billion. Capital investment totalled $372 million, and they had a surplus amounting to $208.9 million. In addition, co-operatives employed 15,046 people and paid wages of $458.7 million.

Two of Saskatchewan’s three largest businesses are co-operatives, as are four of the province’s top twenty firms. Large organizations, such as the Saskatchewan Wheat Pool (SWP), Federated Co-operatives Limited (FCL), and Credit Union Central (CUC) wield significant economic power in the provincial economy. Although smaller co-operatives seem insignificant in comparison, they are major players at the community level, and two of the largest—FCL and CUC—exist primarily to serve the needs of a network of smaller retail and financial co-operatives.

Saskatchewan is home to a broad range of co-operative organizations that vary greatly in size, scope, and operational focus. Not surprisingly, agricultural and resource-based co-operatives comprise more than one-quarter of the total. Other areas in which co-operatives play a major role include retail and wholesale, finances, community development, recreation, child care and preschool, and community service. There is a small group of other types of co-operatives that provide services to members in areas such as housing, real estate development, employment, publishing, film production, and transportation.

The diverse nature of the organizations that are able to function successfully according to co-operative principles is a testament to the flexibility of this business model. Co-operatives clearly possess characteristics that have enabled them to address problems experienced by their members and the communities in which they live. Their impact on communities is substantial, especially in the smaller centres, where the co-op may be one of the few remaining businesses in town. In these cases, co-ops supply not only a wide range of goods and services that might not otherwise be provided, but also employment, thus contributing significantly to the survival of the most vulnerable communities. Co-operatives have a long track record in Saskatchewan and are engaged in organizational renewal that will allow them to continue to make crucial contributions to sustainable economic development in the province.

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