Canada must protect its future as a supplier of food but also of the fertilizers used to produce them, says Agriculture Minister Gerry Ritz.
“When we look at a strategic resource like potash – which is the basis for fertilizers and so on around the world – we do a tremendous job of supplying both potash and foodstuffs, in a lot of cases to the same countries, for example, China, India, Korea,” Ritz said during a Commons debate on the blocked takeover of PotashCorp.
“These are great markets for our fertilizers, as well as our finished foodstuffs. It gives us a power and a strategic position in the global food supply to be a major supplier of both the inputs and our crop and livestock production.”
One Canadian selling point is that foreign buyers “recognize the safety and security of the food supply in Canada,” he said. “Part of that safety and security is also on the input side.”
The decision by Prime Minister Stephen Harper’s government to block the deal has been controversial, praised by some as a move that protects a strategic Canadian resource and criticized by others, who say it has hurt the country’s ability to attract investment.
Ritz emphasized the former during a debate on an NDP motion calling for changes in Canada’s foreign investment rules in light of the stalled
takeover bid for PotashCorp. from BHP Billiton Ltd.
“Canada is a land of wealth and riches,” he said. “We have great raw materials. We have tremendous resource wealth. As we strive to open up our Canadian north, which we have done as a government, and secured that sovereignty there. And as we look at our fresh water supplies and the growing demand around the world, we will have to come to grips with that demand from the rest of the world to either invest or buy outright these types of commodities.”
The agriculture minister also linked the decision to food exports.
Ritz said if an Australian company owned PotashCorp., it would be interpreted by
countries that buy Canadian food that BHP “now controls their fertilizer too. I think that would have had a very detrimental effect.”
While the debate was underway, the Canadian Federation of Agriculture called on the government to make sure there is stability and competition within the fertilizer industry. “Regardless of company ownership, Canadian farmers expect the government to ensure that providers of crop nutrients will make their products available and accessible at a fair market price,” said CFA president Ron Bonnett.
“Supplies of key nutri – ents like potash are strategic resources for Canada and are directly tied to an individual farmer’s bottom line. This has the potential to affect food production across the country.”
The takeover bid for PotashCorp has intensified farmer concerns about fertilizer prices, the CFA stated in a press release.
“Fertilizer prices have risen steadily since 2005 and were particularly unstable in 2008, when fluctuating world commodity prices resulted in a 64 per cent increase, according to Statistics Canada. Agricultural production costs at the time skyrocketed and had a ripple effect through the economy, which saw food prices rise as well,” the release stated.
Liberal MP Ralph Goodale, a former agriculture minister, said his party has pushed the government to block the takeover because potash is important for the future.
“Potash is a mineral nutrient that is a vital ingredient in fertilizers, and 53 per cent of the world’s known reserves are located in Saskatchewan,” said Goodale. “Potash is used to renew and enrich arable farmlands. It is indispensable to food production worldwide and will be so for generations to come.
“Our soil types here in Canada are different from many others around the world. We do not use a lot of potash in our country, at least not yet. One day we most certainly will. In the meantime, its strategic value in feeding a hungry world is indisputable and is growing more strategic and more valuable every day.”
There was no net benefit to Saskatchewan or Canada in the deal, he added.
“Regardlessofcompanyownership, Canadianfarmersexpectthegovernment toensurethatprovidersofcropnutrients willmaketheirproductsavailableand accessibleatafairmarketprice.”
– canadian federation of agriculture president ron bonnett