Most farm groups are giving the Viterra sale a thumbs up on the grain side of the transaction, but there’s concern about potentially less competition in farm input sales.
Glencore is buying Viterra, but will sell 232 of Viterra’s 258 input stores in Canada and all 17 in Australia, along with 34 per cent of Canadian Fertilizers Ltd. to Calgary-based Agrium for $1.65 billion.
“The sale of farm retail outlets to Agrium could result in too few competitive options for some farmers in the purchase of their fertilizer and other farm inputs,” Western Canadian Wheat Growers Association president Kevin Bender said in a news release. “We will be asking the Competition Bureau to ensure good competition remains in all areas of the Prairies.”
The Keystone Agricultural Producers (KAP) and Grain Growers of Canada have similar concerns. There could be isolated pockets where farmers lack competitive alternatives, KAP president Doug Chorney said in an interview.
“While Agrium is a well-respected Canadian company, we are told they will now have 30 per cent of farm input business,” Grain Growers president Stephen Vandervalk said in a release. “In areas of Western Canada where farmers feel there will be less competition, we will encourage the Competition Bureau to have a look and make appropriate recommendations.”
Agrium currently has 65 retail farm input stores in Canada and will have 39 more after acquiring Viterra outlets through Glencore, Richard Downey, Agrium’s vice-president of investor-corporate relations, said in an interview.
Farmers won’t notice much change as staff at Viterra’s stores will remain the same, he said.
“There will be a new sign up front and it will be pretty much business as usual,” Downey said.
The National Farmers Union (NFU) says while Agrium is a Canadian company, Canadian farmers shouldn’t expect special treatment.
Its members fear private companies are moving to capture earnings farmers would have received through the Canadian Wheat Board, which will lose its sales monopoly Aug. 1.
“The purchase of Viterra is not new investment, but simply a shuffling of ownership,” NFU president Terry Boehm said in a release.
Farmers built Viterra’s terminals and the elevators through the Pools and United Grain Growers, he said.
“What was once an asset owned by farmers is now an asset to be used in a way against them,” Boehm said. “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.”
The NFU wants the Competition Bureau to examine the sale’s impact on farmers and Canada.
The Grain Growers, on the other hand, welcomes Glencore’s purchase of Viterra. The firm brings “a wealth of expertise and connections” to Canada’s grain sector, Vandervalk said.
“We received reassurance that Canadian agriculture would be a top priority for the company and we look forward to doing business with them,” added Grain Growers executive director Richard Phillips.
Chorney said he welcomes the investment in Canadian agriculture. The deal should result in more competition for farmers’ grain.