The Political Economy Of Saskatchewan Potash, Past And Present

Potash was first discovered in Saskatchewan in 1943 but its continuous extraction did not begin until 1962. In the years since then, potash has played an important role in the economic and political life of the province. And, as is well-known, the most eventful time in the life of the industry occurred in 1975 when the Government of Saskatchewan decided to become a major participant in potash production. To understand that decision, however, requires an understanding of the economic development of Saskatchewan and of relations between the industry and the government prior to 1975. This year, Saskatchewan celebrates its 75th year as a province. For most of those years, we have been an agrarian economy and society, dependent on exports of cereal grains, mostly wheat, for a livelihood. Even today, agriculture accounts for about 25% of the province's Gross Domestic Product (Economic Review, 1979, p. 7) and difficulties in agriculture spread rapidly to the rest of the provincial economy. The difficulties and risks that go hand in hand with being a "one crop" economy were known as long ago as 1920 but were not fully appreciated until the combination of depression and drought in the 1930's turned the prairie grain- belt into a dustbowl. Some idea of the severity of the depression is revealed by the following data: in 1928, Saskatchewan produced 321 million bushels of wheat. By 1931, the total fell to 132 million bushels and, in 1937, to a mere 37 million bushels. The value of agricultural products sold off farms fell from $273,000,000 in 1928 to a meagre $51,000,000 in 1937. The impact of such a fall of agricultural incomes was catastrophic since about 70% of the population of some 921,000 persons lived in rural, agriculture-dependent areas (Britnel.1, 1939, p. 14).