I can remember the 90’s quite well especially from a hog production perspective. As is discussed in this module; to come to the right view of the future is not easy. To the SWP’s defense there were a lot of pressures, many of them external: freight subsidies gone, where to market grain now, competition being allowed in the industry, rail lines being closed; provincial governments saying we can diversify, each of the provincial governments saying that we can produce 10 million hogs per year in each of Alberta, Saskatchewan and Manitoba instead of the usual 3 million or so. Banks were eager to lend to large conglomerate hog farms, the Canadian Dollar was low and trade agreements seemed to be in Canada’s favor. There was overconfidence. Things changed for the hog industry quite quickly. By the late 90’s and early 2000’s the US put tariffs on hogs, there was overproduction, banks pulled back. Later the Canadian dollar improved and made the Canadian Hog Industry less competitive, the Swine Flu caused price collapse.
In hindsight, SWP didn’t pick the right view of the future. Instead of diversifying and expanding so rapidly it needed to adjust its core business and strengthen it and keep its members on board . Getting into ventures and expansions into areas it didn’t have expertise in was the wrong thing to do.
Who is responsible – ultimately the membership. I think there was a period where most were caught up in this wave of optimism and this wave of feeling a need to expand. Yes, management was pushing it and taking advantage of the lack of board experience. Really the SWP was not ready for the external changes at all. The board needed to sit back and slow things down and look at expansions with a more analytic approach. Overconfidence rather than rationale was too prevalent.
Possible Governance Changes – diversify the board of directors. The Board needed to obtain outside input from experts – this was a critical time for the SWP and they were big changes being made.