Manitoba Grain Act

Manitoba Grain Act
Wagons loaded with bags of grain, awaiting delivery to elevators in Brandon, circa 1888
Enacted by	Government of Canada
Date enacted	1900
Summary
Regulations applying to storage, trade and shipping of grain
Status: Repealed

The Manitoba Grain Act was an act passed by the Federal government of Canada in 1900 to protect the interests of grain farmers against abuses by the grain storage and trading companies and the railways. Although well-intentioned the act was flawed, and a series of amendments were required before the more effective Canada Grain Act of 1912 was passed.

After 1878 the governments of Canada implemented policies to encourage development of grain farming in the prairie province of Manitoba and the Northwest Territories of Saskatchewan, Assiniboia and Alberta. These included setting up protective tariffs, encouraging settlement on the prairies and building a transcontinental railway, the Canadian Pacific Railway (CPR). The agricultural community would produce cash crops for export, and would buy Canadian industrial products. There was inherent tension between the farmers, who wanted to get the highest possible price for their crops, and the grain dealers, who wanted to pay as little as possible.

By 1890 the grain traders had started to consolidate into large companies such as Ogilvie, Northern and Dominion. There were 447 working elevators in the prairie provinces in 1899. Of these 95 were owned by two large milling companies and 206 by three line elevator companies. 120 were owned by individual millers and grain companies, and 26 by farmer-owned companies. The farmers' elevators had difficulty obtaining sufficient volume for economies of scale in grain storage and handling. The large companies could force them out of business by paying excessive prices where the farmers operated elevators, balanced by lower prices elsewhere. The companies took large deductions from the farmers to allow for impurities in the grain (dockage), loss of grain during loading (shrinkage) and transportation costs. Farmers suspected they were colluding over prices, although this was not proved.

Farmers began to complain about the grain traders' practices, and the government established a Royal Commission to investigate the situation. The commission of 1899 held hearings in the main grain belt centers and market centers. The commission also reviewed the practices and regulations of the grain trade in Minnesota, and many features of the Minnesota legislation were included in the recommendations. The commission found, "a vendor of grain is at present subjected to an unfair and excessive dockage for his grain at the time of sale. ... doubts exist as to the fairness of the weights allowed or used by the owners of elevators." The commission said the elevator companies had an unfair monopoly "by refusing to permit the erection of flat warehouses where standard elevators are situated" so they could "keep the price of grain below its true market value to their own benefit." The report recommended legislation, "there being no rules laid down for the regulations of the grain trade other than those made by the railway companies and the elevator owners."