Viterra Sale Helps Global Agribusiness, Not Farmers, says NFU

(Saskatoon, SK) – “The sale of Viterra to Glencore International, and its plans to hive off parts of the company to Richardson International and Agrium Inc., tilts the economic playing field ever more in favour of global agribusiness corporations to the disadvantage of Canadian farmers,” said Terry Boehm, National Farmers Union President. “With Bill C-18’s removal of the Canadian Wheat Board’s single desk still before the courts, it appears these companies are making a move to quickly secure access to a significant portion of the $5 billion worth of grain sales revenue that has been controlled by the CWB.”

With Glencore entering Canada’s grain trade and Richardson expanding its operations, on the surface it may look as if we have two companies where we once had one, but I would be very surprised to see any significant competition that would result in tangible savings for farmers,” added Boehm. “We have seen dramatic changes in the grain handling industry in western Canada in the last fifteen years and each one has brought increased costs to farmers. When the iconic prairie wooden elevators were destroyed it was supposed to generate efficiencies. It certainly did for companies, but farmers have seen nothing more than ever-escalating handling charges and increased transportation distances with a corresponding increase in costs,” he continued.

The long history of James Richardson and Sons has been contentious in western Canada. “Many of the early organizers in the prairie Wheat Pools were responding to abuses in the grain system that companies, including Richardson, routinely visited upon farmers,” noted Ed Sagan, NFU Saskatchewan Regional Coordinator. “It is a very sad day for us to see the company that was build upon the Wheat Pools being turned over to the very company the Pools were established to counteract,” he commented.

“Farmers originally built the terminals and the elevators that Viterra owns and are now up for grabs by the big commodity trading companies. What was once an asset owned by farmers is now an asset to be used in a way against them. We know that instead of controlling these assets we will only be paying for them through handling charges, not earning equity dividends like we once did,” concluded Boehm.

Agrium is poised to control an even larger share of the fertilizer market. “We saw Agrium work with Cargill in Australia to obtain the former Australian Wheat Board’s farm input business,” noted Doug Scott, NFU Board member. “Agrium has operations in the USA, Argentina, Chile, Egypt and Europe as well. While its head office is in Calgary, it is a global business. It’s not going to be giving any special consideration to Canadian famers.”

“The purchase of Viterra is not new investment, but simply a shuffling of ownership. Nothing new is added in terms of assets, and indeed we may see head offices disappear from Saskatchewan at the end of the day,” stated Boehm. The NFU urges the Competition Bureau to review this sale closely and to consider the impacts upon farmers and upon Canada as a whole that would result from the increased foreign ownership of the grain trade as well as further concentration in Canada of both the fertilizer and the grain sectors.

– 30 –

For more information:

Terry Boehm, NFU President – 011 33 3 44 04 82 75

Doug Scott, NFU Board Member – (780) 650-1336 or (780) 358-2376

Ed Sagan, NFU Regional Coordinator – (306) 728-3760 or (306) 728-9050

Cathy Holtslander, NFU Director of Research and Policy – (306) 652-9465