Farm groups say Bunge-Viterra approval fails farmers

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Farm groups are voicing frustration and disappointment with outgoing Transport Minister Anita Anand’s decision this week to approve the acquisition of Viterra by Bunge.

The conditions laid out in the order-in-council are “woefully inadequate,” according to Grain Growers of Canada, the umbrella organization for 14 national, provincial, and regional crop producer organizations.

In a Jan. 15 statement responding to the decision, GGC says it is “extremely disappointed” the approval was given without forcing Bunge to divest its minority stake in fellow grain company, G3.

The conditions for approval include the sale of five Viterra grain elevators and one Bunge elevator in the vicinity of Bunge’s canola crush plants in Altona, Manitoba and Nipawin, Saskatchewan. Bunge is also required to invest at least $520 million in the Canadian market over the next five years, implement governance measures aimed at maintaining G3’s independence, and maintain Bunge Canada’s head office in Regina, Sask. for at least five years.

GGC is calling on the federal government to revisit the conditions for approval of the multi-national grain company marriage that was first announced 19 months ago.

“Minister Anand’s decision to approve the acquisition, even with conditions, doesn’t go nearly far enough,” says GGC executive director Kyle Larkin. “The divestment of six grain elevators is a token gesture in the face of a company that maintains a 25 per cent stake in G3, greatly reducing competition across the Prairies and in Quebec. These conditions do little to offset the $770 million annual cost this merger will impose on farmers.”

A University of Saskatchewan study estimated the negative impact of the deal on Canadian farmgate revenue could approach $800 million annually due to reduced competition at the Port of Vancouver and among elevators and crush facilities on the Prairies.

The Canadian Federation of Agriculture (CFA) is echoing Grain Growers in arguing the conditions of the approval do not go far enough.

“We need to ensure that, at a minimum, the conditions set around this deal are being met,” says CFA president Keith Currie. “Our concerns from the beginning were that this deal would not be in the best interests of farmers and the fact that Bunge has maintained its minority ownership stake in G3 certainly furthers those concerns. Unfortunately, at the end of the day, it is the farmers who will pay.”

Meanwhile, the Agricultural Producers Association of Saskatchewan (APAS) says the decision “sidestepped big issues like the projected $800 million hit to farmers wallets and control over nearly half the Vancouver Port.” The Saskatchewan farm group noted key details about Bunge’s plans for Viterra’s proposed canola crush plant at Regina were also omitted.

“While we acknowledge the government’s efforts in addressing the concerns raised by Saskatchewan farmers in its decision, it is essential that these conditions are more than just words on paper. Farmers need real action that translate into enhanced competitiveness and sustainability in the grain industry,” says APAS president Bill Prybylski.

Editor’s note: This article has been updated with comments from CFA and APAS presidents.

Related: Canadian government grants approval of Bunge’s acquisition of Viterra

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