While the optimism from a corporate standpoint is expected, given that they are working to maximize profitability for shareholders, there are many reasons to consider why this merger might not be in the best interest of farmers.

First, the promise of a “commitment to Canadian workers” and the guarantee against closure of existing facilities does not directly address the central concern of farmers: market concentration and competitive pricing for their products. A fundamental aspect of a healthy commodity market is the ability of producers to get a fair price for their crops. The fear is that a super-sized entity will curb market competitiveness, leaving farmers with fewer options and lower prices.

While Heckman says G3 and Viterra will remain competitors post-merger, this suggestion underestimates the power dynamics in the ag industry. When two behemoths merge, the resulting entity naturally holds sway over the market and can influence pricing and terms. Just because they are competitors in name does not ensure a level playing field.

The Canadian Competition Bureau also thinks G3 and the new entity will have an incentive to reduce competition.

The dismissal of the University of Saskatchewan report based on “assumptions and incomplete data” also demands scrutiny. Economic modeling frequently requires assumptions. This does not invalidate such studies. Rather, it prompts a deeper dive into potential market impacts. As a multi-billion-dollar company, Bunge should have the ability to replicate the study, draw its own conclusions and add to this important debate.

Indeed, Heckman’s remarks appear to corroborate the hypotheses presented in the University of Saskatchewan’s report.

He indicates that there will be no operational changes post-merger, implying that the pursuit of operational cost efficiencies is not on the agenda for the newly formed entity. This assertion strengthens the perception that higher profits are expected via increased margins, to the detriment of farmers.

Moreover, Mr. Heckman’s argument suggests historical GDP growth in Saskatchewan is linked to previous mergers in the grain handling sector. Yet correlation does not imply causation. The increases in GDP and agricultural receipts are likely the result of other factors, such as commodity prices and technological advancements.

Interestingly, Heckman does not mention the declines in agriculture’s GDP in subsequent years following those mergers. He also neglects to address concerns raised over canola crushing and grain export capacity control.

The merger could conceivably place over 40 per cent of Vancouver’s export capacity and a significant portion of canola crushing capacity within the purview of one firm. This is an overpowering share that could negatively affect farmers’ income, estimated by the University of Saskatchewan researchers at a loss of almost $800 million annually.

It’s also important to note that Bunge still has not committed publicly to build the Regina crushing facility previously announced by Viterra.

Increased corporate consolidation often proves to be good for shareholders at the expense of the customers they serve. Farmers and Canadians only need to look at other industries like phone companies, banks, airlines, railways and grocery stores to feel the effects of reduced competition.

In agriculture, should supply chain disruptions occur, a singular, larger entity could prioritize its own interests, leaving producers with less recourse. Bunge’s promised resilience to such disruptions needs a more detailed explanation and assessment backed by evidence.

To conclude, the potential for decreased competition coupled with market dynamics that typically favour larger entities could stack the deck against the very people responsible for the grains making their way to our tables. It is imperative that we scrutinize beyond the surface of corporate promises to ensure that this deal, should it go forward, includes safeguards for the interests and livelihoods of Canadian farmers.

Ian Boxall is president of Saskatchewan’s general farm group, the Agricultural Producers Association of Saskatchewan. Jake Leguee is chair of Sask Wheat, which represents that province’s wheat growers.

The post Opinion: Defence of Bunge-Viterra merger has holes appeared first on Manitoba Co-operator.

For example, consider the official statements coming from the Glencore team related to their role in the continuing consolidation and concentration of the grain handling business in Canada. 

In 2012, when Glencore announced it was acquiring Viterra, the last remnant of the once mighty Prairie co-operatives, it offered these reassuring words to farmers.

“Glencore is confident the acquisition of Viterra will deliver significant overall benefits to grain farmers,” the release states. “The transaction will give farmers access to Glencore’s unparalleled global distribution channels and increase their ability to export their product into international grain and oilseeds markets. 

“Glencore’s global reach and expertise will provide farmers with strong protection from market volatility, more options to market their grain and oilseeds and more competitive pricing resulting from Glencore’s wider markets access and its more consistent demand for grains and oilseeds.” 

Fast forward to June 2023 and Glencore’s announcement that Viterra is be merged with Bunge. 

The wording in that press release is much more succinct and conspicuously, offers no direct assurances to farmers. “The merger of Viterra with Bunge is expected to realize significant value for Glencore,” it says. 

Farm organizations were quick to flag the merger as detrimental. Their concerns have recently been corroborated by Canada’s Competition Bureau and an independent analysis by University of Saskatchewan agricultural economists Richard Gray, James Nolan and Peter Slade, who were commissioned by several Prairie commodity groups. 

READ MORE: Competition bureau has major concerns about proposed Bunge-Viterra merger

The economists’ analysis found that the merger would result in more than 40 per cent of the export capacity at Vancouver controlled by one firm, which would increase the export basis by an estimated 15 per cent. Further market concentration in canola crushing would increase canola crush margins by 10 per cent. Aside from the immediate economic harm, it found that the merger may also reduce incentives for Viterra to build its proposed canola crushing facility in Regina. 

The combined impacts would reduce producer income by approximately $770 million per year. 

These reviews highlighted the stake Bunge holds in G3 Global Holdings, which is the majority owner of G3 Canada Ltd. along with minority shareholder investor Farmers Equity Trust, established in 2015 to manage the shares held by farmers who formerly did business with the privatized Canadian Wheat Board. 

The stake in G3, which includes the ability to appoint directors, is likely to affect how aggressively G3 competes for grain in areas where it competes against Viterra. 

As the Competition Bureau pointed out, the proposed transaction would combine the company with the most oilseed crushing facilities in Canada (Bunge) with the company that has the most primary grain elevators in Western Canada (Viterra). 

One partial solution is to require Bunge to divest its port terminal interest in G3 Ltd. to the other shareholders or external interests. 

However, the economists’ report could find no easy remedy for the further consolidation of control in canola crushing, especially if the Regina plant does not go ahead. 

“This creates a worst-case scenario of a concentrated industry with limited capacity,” the report says. “If there was to be a requirement for merged BV to build the Regina facility, the Regina facility would give BV a 37 per cent market share, which would in turn still increase crush margins by about 10 per cent.” 

“Both outcomes are undesirable and would come at a large cost to Canadian canola producers.” 

The anti-competitive tentacles of this deal reach much deeper than a consolidation that makes two competitors into one. This is about who will shape the future of grain handling and oilseed processing in Western Canada. 

Farmers’ concerns have been verified. Regulators must act.

The post Editorial: Grain business consolidation and concentration appeared first on Manitoba Co-operator.

After the news leaked out last month, Rotterdam-based Viterra confirmed Tuesday morning it’s “concluded an agreement” to merge into Bunge — the St. Louis-based “B” in the “ABCD” of the companies handling the bulk of global grain trade — under the latter company’s banner.

Viterra’s shareholders, which include international commodities trader Glencore, the Canada Pension Plan Investment Board and British Columbia Investment Management Corp., will receive about 65.6 million shares in Bunge — worth about $6.2 billion — and $2 billion cash (all figures US$).

Once a $2 billion share repurchase plan Bunge announced in tandem with the merger is completed, the Viterra shareholders would together hold about 33 per cent of the merged company, up from 30 when the merger deal closes. Viterra shareholders would not take part in the share buyback plan.

The deal also calls for Bunge to assume about $9.8 billion in Viterra debt.

“Our highly complementary asset footprints will create a network that connects the world’s largest production regions to areas of fastest growing consumption, enhancing the geographical balance and adaptability of our global value chains and benefitting farmers and end-customers,” Bunge CEO Greg Heckman said in a release.

“In combining our highly complementary origination, processing and distribution networks, we are better positioned to meet the increasing demand for the food, feed and fuel products we offer,” Viterra CEO David Mattiske said in the same release.

“Together, we will play a leading role in the future of the agriculture industry, developing fully traceable, sustainable supply chains and moving towards carbon-neutral operations, while creating a strong growth platform for our combined business.”

Heckman and Bunge CFO John Neppl would remain in their posts with the merged firm, while Mattiske would become the new firm’s “co-chief operating officer.”

The two companies said the combination is expected to generate about $250 million per year in gross pre-tax “operational synergies” within three years of closing, plus “significant incremental network synergies” and “relatively more stable cash flows from the larger, more diversified footprint.”

Those synergies, Heckman said on a conference call later Tuesday morning, would not be based on reduced staff head count but rather mainly on “operational” synergies such as asset utilization and procurement savings. In terms of human capital, he said access to talent in the agrifood sector is “at a premium.”

The combined firm would be based in St. Louis, where Bunge relocated its global head office from White Plains, N.Y. in 2019. Rotterdam, where Viterra’s global head office sits today, “will be an important commercial location in the future of the combined company.”

Glencore and CPP Investments would each be able to name two members to the merged Bunge board, while Bunge would nominate the remaining eight. Glencore and CPP’s shareholder agreements with Bunge also include a 12-month lock-up period on sales of Bunge shares.

For its part, Toronto-based CPP Investments said separately its 40 per cent stake in Viterra will translate to about a 12 per cent equity stake in Bunge and about $800 million.

On Tuesday’s conference call, Bunge said its own shareholders would have 70 per cent equity in the combined firm when the deal closes, while Glencore would have 15 per cent and BCIC, three per cent.

“Combining these two highly complementary companies will create an enhanced agribusiness that can provide an expanded product offering to end-customers, with an increased ability to innovate and promote sustainable practices in the global food supply,” Bruce Hogg, head of sustainable energies with CPP Investments, said in a separate release.

Glencore CEO Gary Nagle, in a separate release, said the deal “is expected to realize significant value for Glencore” and described the planned merged group as “a premier pure-play agribusiness solutions company, well placed to meet increased global demand as well as the ongoing challenge of providing sustainable, traceable food and feed products to customers around the world.”

Bunge and Viterra said the merger is expected to close in mid-2024, subject to the usual closing conditions, including approval by Bunge shareholders and the relevant regulatory approvals.

Those approvals are likely to include review by Canada’s Competition Bureau, given Viterra’s significant stakes in Prairie grain handling, oilseed crushing and port terminal capacity, and Bunge’s stakes in Canadian crushing and its part-ownership of Prairie grain handler G3.

Asked on Tuesday’s conference call about any plans to divest assets to appease regulators in countries where the two firms operate, Neppl described the companies’ asset footprints as “very complementary” and said Bunge looks forward to working with regulators and “helping them to understand the footprint.”

Viterra formed in 2007 in a merger of Saskatchewan Wheat Pool with Agricore United — the latter having formed in a 2001 merger of the former Alberta and Manitoba wheat pools with another former Prairie grain co-operative, United Grain Growers (UGG).

The Regina-based firm went international in 2009 with a deal for Australia’s ABB Grain, then was majority-acquired by Glencore in 2012, becoming Glencore Agriculture before rebranding as Viterra internationally in 2020. It expanded its U.S. footprint last year with a takeover of grain firm Gavilon.

Bunge formed as a trading company in Amsterdam in 1818, expanding to Argentina in 1884, Brazil in 1905 and North America in 1918, moving its global headquarters from Brazil to the U.S. in 2001, when it became a publicly traded company.

Bunge’s stake in Winnipeg-based G3 was acquired through a joint venture with a Saudi state grain firm in 2015, which bought the assets of the privatized Canadian Wheat Board. — Glacier FarmMedia Network

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Winnipeg grain handler G3, whose grain terminal at Trois-Rivieres, Que. has storage capacity for 109,000 tonnes, reported Wednesday the terminal has so far unloaded over 160,000 tonnes of imported grain from incoming ships in 2022.

That total marks “far more than the facility has ever handled in one year,” the company said in a release.

The Trois-Rivieres site — like G3’s three other port terminals in Eastern Canada — is focused mainly on loading ships with grain for export. However, G3 said Wednesday, it’s also the only port facility in the Great Lakes-St. Lawrence Seaway system able to unload grain from Panamax-class bulk ships and transfer it onto trucks, trains or smaller laker vessels.

Included in the 160,000-tonne total so far this year were 30,000 tonnes of inbound grain just recently unloaded from a single vessel, sent to Canada from an overseas supplier, G3 said.

The jump in demand for inbound grain is “due to a shortage of some crops caused by drought last year in Western Canada,” G3 said.

Given the supply situation, G3 CEO Don Chapman said the company is providing “important capacity to import grain when needed.”

The Trois-Rivieres facility has been operating “around the clock” to handle the increased imports, the company said, while still receiving “thousands of truckloads” of corn, soybeans and other crops from Quebec growers to load on outbound vessels for export.

The Trois-Rivieres terminal, formerly known as Les Elevateurs des Trois-Rivieres (ETR), came to G3 in 2013, when the company, then known as CWB, bought the port terminal assets of Toronto’s Upper Lakes Group.

ETR’s annual grain throughput at that time was estimated at around six million tonnes. The site has 35 feet of water at its berth, thus allowing it to handle inbound and outbound ocean-class bulk vessels loaded to deeper drafts. — Glacier FarmMedia Network

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G3 announced Monday it had completed the sale of the ag input business adjacent to its elevator west of Plenty, Sask., to Saskatchewan input and bulk fuel dealer Rack Petroleum, a.k.a. The Rack. The dollar value of the sale wasn’t disclosed.

The fertilizer and input retail business at G3’s Prairie West elevator had operated at the site since before it became part of G3, the company said. Selling the retail side to The Rack “allows G3 to focus on its core grain handling business.”

The Rack said it will operate the retail business and expand its agronomy offering, and will also make bulk farm fuel delivery available to the area.

“This move ensures that customers have continued and improved access to crop inputs services conveniently located alongside the G3 grain terminal,” G3 said.

Headquartered at Biggar, about 75 km northeast of Plenty, The Rack started in 1984 as a bulk fuel agent and expanded into crop input supply and service, then became a stand-alone independent retail business under its current name in 2001.

Along with its Biggar and Plenty operations, The Rack today has retail offices in nine other western Saskatchewan communities.

“The Rack is focused on being a leader of innovation and offering science-backed knowledge and we look forward to gaining the trust of local producers to meet their needs as we continue to support rural Saskatchewan,” Rack CEO Dennis Bulani said in G3’s release.

The Plenty elevator and retail operation came to G3 — then known as CWB — in 2014, when it bought full control of farmer-owned grain handler Prairie West Terminal, which built the concrete terminal there in 1998. — Glacier FarmMedia Network

CORRECTION FROM SOURCE, July 20, 2022: An earlier version of this article incorrectly identified The Rack’s CEO.

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G3 has partnered with CASA since 2016 for delivery of BeGrainSafe, which offers education about the risk of grain entrapment and provides rescue training and equipment for first responders.

In 2022, BeGrainSafe will train firefighters in Central Canada. For the first time, BeGrainSafe training will be offered in French. G3 is funding the translation of the training material for firefighters.

“Safety is key to everything we do at G3, and that has included providing grain rescue training and equipment to enhance safety in communities across Western Canada,” Don Chapman, G3 president and CEO said.

G3 funding will also support training and rescue equipment for six fire departments in Central Canada. The rescue equipment consists of a pencil auger and a coffer dam. This equipment and training is vital as it gives firefighters the knowledge and equipment to help save lives in grain entrapment situations.

“Making BeGrainSafe training available in French allows BeGrainSafe to reach more firefighters across Canada,” Rob Gobeil, CASA’s agricultural health and safety specialist, said. “As a national organization, CASA strives to make all training and resources available in both official languages, and thanks to G3, BeGrainSafe will make significant impacts on French-speaking rural communities.”

For more information about BeGrainSafe, including firefighter training, please visit casa-acsa.ca/begrainsafe or contact CASA at 877-452-2272 or info@casa-acsa.ca.

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Court of Queen’s Bench Justice Chris Martin delivered his written judgment Tuesday in Winnipeg, clearing the way for a judge to hear the allegations on behalf of an estimated 70,000 or so western Canadian farmers who delivered grain to the wheat board’s pool accounts in 2010-11 and 2011-12.

“I think it is good news for the farmers who felt they weren’t dealt with fairly when (Agriculture Minister Gerry) Ritz and (Prime Minister Stephen) Harper were privatizing the wheat board,” Stewart Wells, a Swift Current, Sask., farmer and member of the Friends of the Canadian Wheat Board, said in an interview Thursday. “The wheels of justice grind slowly but they’re still grinding.

“It’s the first major progress since the case was launched in 2012 and it’s certified so this is going to be heard in court. It’s just not going to be swept under the rug somewhere. So that’s a pretty major advancement.”

However, Wells didn’t rule out the possibility that the government and G3 will appeal Justice Martin’s decision.

An out-of-court settlement is also possible.

The Harper government government removed the CWB as the sole marketer of western Canadian wheat and barley destined for export or domestic human consumption Aug. 1, 2012.

In 2015, G3 (Global Grain Group), newly formed to subsume the CWB, agreed to invest $250.5 million and in return received the CWB’s assets from the federal government.

G3 is a joint venture firm majority-owned by the state-owned Saudi Agricultural Livestock Investment Co. (SALIC) and Bunge.

The lawsuit brought by Brookdale, Man., farmer Andrew Dennis alleges Ritz acted unlawfully by taking $150.9 million of farmers’ money from the CWB’s pool accounts to help privatize the wheat board.

One hundred and forty-five million dollars was used to triple the wheat board’s contingency fund and $5.9 million went to cover some of the transition costs.

Under the Canadian Wheat Board Act, all money collected in the CWB’s pool accounts earned from marketing farmers’ grain was required to be paid to farmers, less board operating expenses.

“What’s alleged is that Gerry Ritz… was acting illegally and not in good faith — the legal phrase is misfeasance while in public office — when he directed money to the contingency fund that we argue ought to have been paid to farmers instead,” Wells said.

“We argue that he was morally and legally wrong to be hiving off money that should have gone to the pooling accounts and been paid to farmers but instead he was trying to build up the Canadian Wheat Board as an entity so he could later on give it away to Saudi Arabia and Bunge.”

The CWB’s board of directors unanimously passed a resolution calling on the government to cover the cost of privatizing the board instead of farmers, Wells said.

“And then Ritz said in public that he would pick up all the cost, but when the (CWB’s) final annual report came out it showed that they had taken $5.9 million out of the pooling account to cover restructuring costs,” he said. “It makes no sense. It just loops back to the notion that farmers weren’t being treated fairly.”

The suit also asks for $10 million, plus interest since 2012, in damages, bringing the total compensation sought to $160.9 million, excluding interest.

“It’s not that much per individual farmer (if the suit is won),” Wells said. “It totally depends how many tonnes they (farmers) delivered to the pools in those two years, but that’s one of the reasons class actions were invented. It wouldn’t make sense for one or a very small group of farmers to take this sort of action, but it certainly makes sense to launch it as a class.”

Farmers who delivered to the pools in 2010-11 and 2011-12 are automatically part of the class action lawsuit unless they opt out, Wells said.

More information for affected farmers will be posted on a website, he added.

Wells doesn’t know when the case will be heard, but doesn’t rule out it taking another three to five years to resolve.

“They (federal government and G3) have been deliberately trying to delay this process all the way along for the last 10 years… but this is a very significant step toward getting the action certified having the representative plaintiff Andrew Dennis named in the action so he can carry it forward on behalf of all these farmers,” Wells said. “It’s a really crucial step. Without this the case couldn’t have gone anywhere.”

Wells declined to disclose how much money has been spent litigating the case so far.

“We have said all along that we are very grateful to all of the farmers that supported us when we started fundraising for this action back in very, very late 2011 and then in 2012, 2013 and 2014,” he added. ‘We wouldn’t have gotten anywhere without the support of those farmers there’s no question about that. This is truly the farmers’ action. Everybody is looking forward to the result.”

While the case is about the alleged misuse of farmers’ money, it’s also about holding government to account, Wells said.

“Cabinet, through orders-in-council, can change some things but they can never override the existing legislation,” he said. “And that’s what we are arguing happened here — that Ritz was overriding the original legislation with his orders-in-council, which in turn makes his actions illegal.

“Whether they (farmers) agreed with the wheat board being a (mandatory) marketing agency or not they still didn’t deserve to have money taken from the pooling accounts and just given to the King of Saudi Arabia and Bunge.”

After taking over the CWB, the new G3, renamed G3 Canada Ltd., was 50.1 per cent owned by SALIC and Bunge and up to 49.9 per cent potentially owned by farmers, depending on how much grain they delivered to the new firm.

Farmers were to earn $5 of G3 equity for every tonne.

G3 Canada had two shareholders — G3 Global Grain Group and the farmers’ equity trust. Farmers who deliver to CWB own units in the trust and the trust owns shares in G3 Canada Limited.

After the farmers’ equity is fully allocated, or in seven years (2022), G3 Canada Ltd. can buy the equity, but isn’t obliged to.

In 2016 Reuters reported SALIC’s ownership within G3 Global Grain Group jumped to 75 per cent from 49 per cent, according to an April 28, 2016 Bunge filing.

— Allan Dawson is a reporter for the Manitoba Co-operator at Miami, Man.

The post Farmers’ CWB class action lawsuit gets certified appeared first on Manitoba Co-operator.

In Winnipeg Nov. 22 Court of Queen’s Bench Justice Chris Martin heard from lawyers representing the plaintiff and defence on how the case that began almost nine years ago should proceed.

“The purpose of the process here is so that the judge can ensure that this case moves forward in a way that serves the best interest of the farmers,” Anders Bruun, one of the lawyers for plaintiff, Brookdale, Man., farmer Randy Dennis, said in an interview Nov. 23. “So our proposal has to be one that we think is in the best interests of the farmers in terms of publicity on how they can claim money (if the case is won) and so forth. That’s the test. What’s the best way to move this case forward in the interests of farmers?

“Is it best to certify as a class action instead of requiring 70,000 farmers to sue individually?”

Based on a Manitoba Court of Appeal ruling Dec. 2, 2020, Bruun said he is confident the proposed class-action lawsuit seeking more than $160 million in compensation to farmers who sold grain through the CWB pool accounts in 2010-11 and 2011-12, will be certified.

“Now it’s a question of determining what the protocol for moving the action forward is going to be,” Bruun said.

“It’s essentially, what should the terms of certification be?”

If the class-action lawsuit is certified the plaintiffs will then have to prove the federal government and G3, which took control of the CWB’s assets in 2015, misused farmers’ money.

Why it matters: If the lawsuit is certified, allegations that the Harper Conservative government misused farmers’ money to privatize the Canadian Wheat Board will be tested.

The suit alleges the federal government improperly used $151 million that should’ve gone to farmers to cover some of the costs transitioning the CWB from a statutory, single-desk wheat and barley marketer, to a private grain company.

Of the $151 million, the suit claims $145.2 million ended up in the CWB’s contingency fund and $5.9 million was withdrawn from the CWB’s pool accounts.

The CWB set up a contingency fund to cover losses that occurred when farmers opted to price grain sales outside the CWB’s pools. It was normally funded when transactions earned more than the price farmers sold at. The fund was meant to break even over time.

“In order to fund the transformation of the board to a privately held entity, the defendants engaged in a course of conduct intended to reduce payments to farmers who had sold and delivered grain to the board during the class period and to increase the monies in the contingency fund,” the lawsuit alleges.

The CWB Act didn’t allow the wheat board to use money earned from its pool accounts for anything other than covering its operating expenses.

Gerry Ritz, who was agriculture minister at the time, said the government would cover the costs of transitioning the CWB to an entity that could be acquired by a private company.

“Nevertheless, the board improperly charged $5.9 million in transition costs to the pool accounts, which reduced the amount that was available to producers upon payment of their contracts during the 2011-12 crop year,” the claim alleges.

“The plaintiff pleads that the board breached its duty of good faith to the class (farmers who delivered to the CWB) by ignoring its obligations to the producers, and by allocating money to the contingency fund that otherwise would have been paid to the pool account contract holders.”

The case is simple, Bruun said. Under the wheat board act the CWB was obliged to buy all wheat “offered by a producer for sale and delivery.”

After the CWB sold the grain farmers delivered, the earnings went into the pool accounts. The CWB deducted the costs incurred in marketing the grain and by statute was obliged to return what was left to the farmers who delivered the grain.

“The case is really that simple, which may be why we’ve seen one feeble delay tactic after another (by the federal government’s lawyers),” he said.

The Conservative government ended the CWB’s single-desk marketing authority Aug. 1, 2012.

In 2015, G3 (Global Grain Group), newly formed to subsume the CWB, agreed to invest $250.5 million and in return received the CWB’s assets from the federal government.

G3 is a joint-venture firm majority owned by the state-owned Saudi Agricultural Livestock Investment Company (SALIC) and Bunge.

After taking over the CWB, the new G3, renamed G3 Canada Limited, was 50.1 per cent owned by SALIC and Bunge and up to 49.9 per cent potentially owned by farmers, depending on how much grain they delivered to the new firm.

Farmers were to earn $5 of G3 equity for every tonne.

G3 Canada had two shareholders — G3 Global Grain Group and the farmers’ equity trust.

Farmers who deliver to CWB own units in the trust and the trust owns shares in G3 Canada Limited.

After the farmers’ equity is fully allocated, or in seven years (2022), G3 Canada Limited can buy the equity, but isn’t obliged to.

In 2016 Reuters reported SALIC’s ownership within G3 Global Grain Group jumped to 75 per cent from 49 per cent, according to an April 28, 2016 Bunge filing.

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The Winnipeg-based company announced Monday it will build new facilities at Rycroft, Alta. and Melfort, Sask., with construction starting later this year on both toward completion in early 2023.

The two elevators will each be built with 150-car loop track systems connecting to Canadian National Railway (CN) track, and will each include storage capacity for 42,000 tonnes of grain.

Other “high-efficiency features” will allow producers the ability to unload a Super-B truck in less than five minutes as well as “excellent” road access, the company said.

“G3 is keeping grain moving to market, and that means more delivery opportunities for our farmer customers, and faster service which saves farmers time and money,” G3 CEO Don Chapman said in the company’s release.

Other grain handlers with elevators at Melfort include Viterra, Richardson Pioneer and The Andersons, while Richardson, Parrish and Heimbecker, Cargill and Grain Millers Canada have facilities at Rycroft.

G3 has been on a relatively steady expansion track on the Prairies since its formation in 2015, today operating 17 Prairie grain elevators and five port terminals.

Those include elevators opened earlier this year at Vermilion, Alta. and Swift Current, Sask. In 2020 G3 opened five Alberta elevators, along with its West Coast port terminal at Vancouver. — Glacier FarmMedia Network

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The Manitoba Court of Appeal has overturned a lower court judge’s ruling to strike the suit.

The higher court on Wednesday “ruled that our cause of action — ‘malfeasance while in public office’ — is legitimate, and that our litigation against the federal government can continue,” Wells said Friday via email.

“The alleged offence occurred when Gerry Ritz was the minister of agriculture and the Canadian Wheat Board was being destroyed by the Harper government in 2011.”

The decision, Wells said, means “we can continue our legal process which calls for the repatriation of $150 million to farmers who were marketing wheat and barley through the CWB in 2010-11 and 2011-12. The legal action also calls for $10 million in punitive damages. With interest accruing since 2012 the total number would be in the $190 million range.”

In a phone interview, Wells said the Court of Appeal’s written ruling underscores the suit’s credibility.

“There is nothing on the record before this court to suggest that the allegations (in the suit) are bald conclusions, patently ridiculous or manifestly incapable of proof,” the Court of Appeal’s written ruling states in part.

It goes on to say the lower court judge’s decision to strike the suit “is so clearly wrong as to amount to an injustice.”

Wells said it’s unclear when the suit will go before a judge to be certified. If it is, farmers who did business with the CWB during those two crop years will be part of the action, unless they opt out.

Of the $151 million the suit claims should’ve gone to farmers who delivered to the CWB, it alleges $145.2 million ended up in the CWB’s contingency fund and $5.9 million was withdrawn from the CWB’s pool accounts. The allegations have not been tested in court.

The CWB set up a contingency fund to cover losses that occurred when farmers opted to price grain sales outside the CWB’s pools. It was funded when transactions earned more than the prices farmers at which farmers sold. The fund was meant to break even over time.

“In order to fund the transformation of the board to a privately held entity, the defendants engaged in a course of conduct intended to reduce payments to farmers who had sold and delivered grain to the board during the class period and to increase the monies in the contingency fund,” the claim alleges.

The federal CWB Act didn’t allow the wheat board to use money earned from its pool accounts for anything other than covering its operating expenses. Gerry Ritz, who was agriculture minister at the time, said the government would cover the costs of transitioning the CWB to an entity that could be acquired by a private company.

“Nevertheless, the board improperly charged $5.9 million in transition costs to the pool accounts, which reduced the amount that was available to producers upon payment of their contracts during the 2011-12 crop year,” the claim alleges.

“The plaintiff pleads that the board breached its duty of good faith to the class (farmers who delivered to the CWB) by ignoring its obligations to the producers, and by allocating money to the contingency fund that otherwise would have been paid to the pool account contract holders.”

The Conservative government ended the CWB’s single-desk marketing authority effective Aug. 1, 2012.

— Allan Dawson is a reporter with the Manitoba Co-operator at Miami, Man.

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