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From Growth to Development: The Influence of Politics, Religion and Economics on Prairie Agriculture in Canada

 From Growth to Development: The Influence of Politics, Religion and Economics on Prairie Agriculture in Canada

Andrew Reed, PhD Candidate, School of Politics & IR

Primary Supervisor: Professor Mark Pennington (King's College London)

I became fascinated with agriculture as a child growing up in Yorkshire, although my family had no direct connection with the sector.  When I was thirteen, my family emigrated to Canada and we lived first in rural Saskatchewan where wheat growing was the primary occupation.

Since then I have been preoccupied by two questions: why farmers are so frequently poor and why they often adopt practices which are not in their long term interest.  Work I did on agriculture at the University of Toronto began with physical constraints on agriculture (soils, climatology), continued with basic agricultural economics and finally dealt with policy issues.  Influenced by the Provost of my college who was a Russian émigré, I wrote my MA thesis on Soviet Agricultural policy when the only people interested worked for the CIA. I also obtained a Diploma in Spanish after a year at the University of Barcelona, and a Post-graduate Diploma in Russian from the University of Surrey.

After university I first held the position of Agricultural Economist at the Bank of Nova Scotia, a Canadian multi-national bank. I was subsequently head-hunted to work for Massey-Ferguson Ltd, a Canadian farm machinery and diesel-engine manufacturer then struggling to return to profitability from the verge of bankruptcy.  In this role I was involved in the transformation of the company into an automotive components business.

I opted to become an independent consultant when the company moved its headquarters to the United States in 1991.  I volunteered for an agricultural project in Russia after the fall of the Soviet Union, where I discovered that huge sums of money were being expended by people who had no idea how agriculture worked in ‘market economies’ or why post-Soviet agriculture was in a state of collapse.  I worked on a number of these projects, including a two year stint managing a World Bank project in the Russian Ministry of Agriculture.  I came to the conclusion that either by accident or design, foreign-funded technical assistance projects were preventing Russian agriculture from recovering in the post-Soviet period.

On two occasions, I was asked to ‘evaluate’ projects:  one of these was the Russian Land Project in which DFID invested fifty-million dollars of taxpayers’ money; the second was to look at ten years of Canadian government funding of agricultural projects in Ukraine.  Neither of my reports was well received, but they did start me thinking about agriculture on the Canadian prairies.  Creation of an agricultural economy in that region was the objective of a nineteenth century Canadian government project.  My PhD at QMUL outlines the unintended negative consequences of that initiative.   

Research Project

The discipline of economics is currently deeply divided between those who argue government intervention can improve the outcomes generated by imperfect markets and those who consider such intervention counterproductive. 

Each side in this argument is convinced by its own theoretical arguments but rejects those offered by the other side.  The agricultural economy on the Canadian prairies provides a case study where the consequences of intervention can be examined over an extended period of time.

The standard version of this aspect of Canadian history is that the transformation of the prairies into a major wheat exporting region was the result of enlightened policy.  However when economic and ecological disaster struck the region in the 1930s it was blamed on laissez-faire capitalism.  Government control over the institutions which handle, transport and market prairie grain was adopted as the solution.  However these interventions were eventually dismantled, beginning with the removal of a low statutory railway freight rate on grain in the early 1980s and ending with the loss of the Canadian Wheat Board’s monopoly over sales of wheat and barley in 2012. The prevalent view is that this policy reversal is a return to policies previously blamed for catastrophic results.

The alternative interpretation points out that the original settlement policy, and the First World War, both of which created unwarranted expectations regarding the region’s agricultural potential, were the antithesis of laissez-faire.  Both increased the vulnerability of the prairie grain economy to lack of rainfall or declining prices, and the Depression brought both simultaneously.  The remedial intervention adopted in response compounded both the economic and environmental problems and undermined the competitiveness of prairie grain on world markets.  Canada’s market share declined sharply, precipitating a crisis which prompted the federal government to end its open-ended financial commitment to the sector.

Recent ‘neo-liberal policies’ – a derogatory term in some circles -- have revitalized the sector.  Massive investment in railway and grain handling capacity, diversification of the region’s agricultural commodity base, rising land values and expansion of value-added processing industries in the region and the elimination of practices that degrade the soil are among the consequences.  The prairies are no longer a ‘have-not’ region within the Canadian confederation, but provide a share of the transfer payments made to other provinces now suffering the effects of ill-advised industrial policies.

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