Friday, April 11, 2008

Big Sky Controversy

Kevin Hursh (Today’s Comment, 11/04/08) rightfully defends Big Sky Farms from those who are resentful of its size, its success and the fact that the Saskatchewan government owns 69% of it. Jim Long (Pork Comments, e.g. ) has been particularly vocal in his attacks. Partly I suspect because Big Sky is using what used to be NPD (now Hypor) breeding stock. Be interesting to hear the tune if Big Sky’s 50,000 sows were of Genusus breeding. Jim Long makes it sound as though Big Sky were on government funded life support more so than the rest of the industry – “pull the plug”. Investors in the pig industry everywhere are bleeding equity and I expect Big Sky investors are no different. There has been no word of any cash injections to Big Sky from the general provincial treasury, so the “taxpayers” are not supporting Big Sky. What is Jim Long’s problem?

The history of Saskatchewan (indeed Canada) is that much of what we have is a result of significant government investment. We have a different political and economic history and culture than the Americans. The American wanna-bees in Alberta and their vocal imitators in the rest of Canada who brand everything they disagree with or can't understand as “socialist”, don't seem to comprehend that. In his excellent book “The Canadians”, Andrew H Malcolm points out that when the US completed its transcontinental railway in 1869, it had a population of 40 million people. When Canada completed its transcontinental railway in 1885, it had a population of 4 million people and 1500 miles more miles of railroad to build through the Canadian shield. Government did not just guarantee loans, it put up cash as well. Huge amounts of cash. Major developments have since relied heavily on government funding and support simply because other investors would not take the risk without it.

Governments can and must take risks that others will not take. Upgraders, fertilizer plants, irrigation systems, etc. When they fail (plastic shopping carts, French translation software, Meadow Lake Pulp Mills, potato storage) they are soundly and self righteously beaten up by the press and opposition. When they are successful they are also beaten up for “interfering” in private enterprise. Prince Albert Penitentiary used to have a thriving cattle herd and feedlot which employed the prisoners and provided beef for the prison and other federal institutions. A prominent local cattle buyer successfully forced the government to close it because it provided “subsidized” competition to “honest” private cattle people.

Florien Possberg was one of the original investors in NPD swine genetics, I believe. NPD also had heavy government investment. We would never have had a major World-Class swine genetics company located in Saskatchewan without it. I happen to know from sitting on the Board of NPD back when I worked for Saskatchewan Agriculture that the company was so profitable that there was no way Saskatchewan Crown Investments wanted to sell their shares. It was a cash cow. I suspect that Big Sky is no different. Crown Investments has no doubt made good money from their investment in Big Sky and Saskatchewan has a pork production company that sets examples for others. It has excellent management, excellent human resource policies and staff who are proud of their work and their company. Big Sky recruited locally and trained and maintained their staff. No imported labour because they didn’t need it.

The Saskatchewan government need not apologize to anyone for investing in Big Sky and certainly, like any investment, if one is offered a price one cannot refuse, then it is time to sell and look for another place to invest.

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