Saskatchewan scratching for a living. Both grain and oil have sagged; prairies look to wheat prices

A prairie grain farmer walks into the Chaplin Hotel to cover a bounced check. ``Here's your $30, Phil.''

``It's $33. The bank puts on a service charge,'' says Phil Walston, the hotel owner.

The farmer leaves, embarrassed by the presence of strangers.

``That guy farms 10 sections [6,400 acres],'' Walston says. ``If he's bouncing checks, it gives you an idea of how bad things are out here.''

Chaplin is halfway between Swift Current and Moose Jaw in the southern part of Saskatchewan, the biggest grain-growing province in Canada.

It is a farm town of about 500 people, with a hockey arena, one gas station, which closes for an hour at noon, one bank, a credit union, and the hotel. The main line of the Canadian Pacific Railway runs through town, and there are two grain elevators here.

Beyond the houses of Chaplin, the wheat fields stretch to the horizon. Dozens of these sleepy little western towns are in trouble because of subsidies to grain farmers in the United States and Europe, the oil glut, and the recent drought.

Saskatchewan is an oil-producing province, too, and when times are hard in agriculture, oil and gas usually pay the bill. Now, they're both on the skids. That means less business for the towns, and for hotel owners such as Phil Walston.

``Business has never been worse,'' says Walston, who bought this hotel to run with his wife after getting out of the Canadian Army. He opens the cash register drawer and pulls out more bounced checks, all of them from farmers.

The only good news is the weather. After two years of little rainfall, this prairie desert was drenched in the past two weeks. There were puddles in the ditches. And farmers had a new complaint, trouble getting their equipment onto rain-soaked fields so they could plant their seed.

All the wheat, oats, and barley grown in the prairie provinces is sold by the Canadian Wheat Board. Its biggest customer is the Soviet Union, which bought 6 million metric tons last year and has a five-year contract for more of the same.

``We expect business as usual with the Soviet Union,'' says Pat Keena, with the Canadian Wheat Board in Winnipeg. ``We are still uncertain about what effect if any the nuclear accident in the Ukraine will have on the harvest there.''

The early rain on the prairies could produce a bumper crop, Mrs. Keena says. Last year prairie farmers produced 40.6 million metric tons, a far cry from the record of 46 million metric tons set in 1982.

Canadian farmers will probably continue to produce as much grain as they can. Canadian farmers also get a subsidy from the federal government, although they say it is not as generous as those in the United States and the European Community.

There is no worry about the oversupply of grain in the world. ``The board takes the position that we will market whatever product the farmers give us to sell,'' Keena says. But the prices farmers receive is based on the world price, and although they will get a check from the Wheat Board, the money is based on a lower price per bushel. That is why the grain farmer with 10 sections bounces a check.

For Canadian wheat farmers to survive, they have to export. Canada exports 80 percent of its grain crop, compared with 20 percent for the Common Market countries in Europe.

After the Soviet Union, Canada's largest grain customers are China, with 2.8 million metric tons; Japan, 1.3 million metric tons; and Brazil, 1.1 million metric tons. Those big foreign sales are keeping Canadian grain farmers in business.

Mrs. Keena of the Wheat Board says the fight between American and European grain farmers has hurt the western Canadian growers by driving down world prices for grain, and unless the US and EC call a truce, there is little Canadian farmers can do.

What many of them might do is get out of farming altogether. Some experts estimate that the next few years could see as many as 1 in 5 prairie grain farmers leaving the land.

The western provinces, especially Saskatchewan, could see a big reduction in population -- helped by the drop in oil activity. That would make it harder for towns like Chaplin to survive and for Phil Walston and his wife to hang on to their little hotel.