Date of Award

Spring 2000

Document Type

Thesis

Department

Political Science & International Relations

First Advisor

Dennis Wiedmann

Second Advisor

Beth Wilson

Third Advisor

Robert Swartout

Abstract

Once again national and international news crews and I congregated at the Montana-Alberta border to discover why Montana and Canadian farmers were gathering there. Farmers were invited by the Reclaim Rural America organization to the protest rally to speak to journalists or anyone else, for that matter, about their plight. These farmers assembled at Sweetgrass, Montana, to voice their anxiety over the low grain prices on July 9, 1999. Throughout the day, it became very clear to me that many in the crowd and at the podium blamed grain trading, the lack of government enforcement, and the Canadian Wheat Board for manipulating the wheat market to obtain excess profits. I pondered the situation driving home. Having learned in economics that agriculture is considered the closest market to pure competition, I wondered if, at some link in the food chain, the industry had become oligopolistic or monopolistic. In other words, was the market being manipulated? Were the farmers correct in placing the blame on the grain companies, the governments and the Canadian Wheat Board? This thesis will decipher each of these entities as they belong to the complex agricultural sector. The first chapter will explain the basics of movement and pricing associated with the wheat industry. The second chapter will analyze governmental roles in antitrust legislation and state trading enterprises to express how the grain trade arrived at its current state in America and Canada in the legal sense. The third chapter will look closer at the actual grain traders and their recent actions. Following this, a full chapter will be devoted to the Canadian Wheat Board—a state trading enterprise, an important player in the wheat industry and a concept foreign to American capitalistic ideals. The fifth chapter focuses on the specifics of the Montana wheat industry to present the findings of a study of grain bids to determine if the differences in wheat prices were statistically significant. This study will attempt to answer whether or not grain bids are being continually manipulated by one of the players in the Montana wheat industry.

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