Four farm groups want the Saskatchewan government to conduct a risk assessment into the proposed merger between Viterra and Bunge.
The Agricultural Producers Association of Saskatchewan, SaskCanola, SaskBarley, and SaskWheat sent a joint letter to provincial Agriculture Minister David Marit.
Chairperson of SaskWheat Brett Halstead says one of the concerns is less options to sell grain.
“We’ve seen that in a number of things in agriculture – chemical companies for example, railways there is only two – so any loss of competition, any consolidation I think needs to be looked at fairly closely and how it will affect producers and our economy in general.” Halstead said.
A recent survey indicated 79 percent of farmers are concerned about the merger.
In the letter, the four groups referenced two specific examples of the provincial government conducting a review of mergers. One was Potash Corp. and BHP Billiton in 2010, which fell through, and another between Glencore and Viterra in 2012.
President of APAS Ian Boxall says a review is important because the merger would have the biggest impact here.
“I think it’s important our province recognize that and realize how big of a deal this is for Saskatchewan producers,” Boxall stated.
Chair of SaskCanola Keith Fournier echoed similar comments, saying they want to make sure all aspects of the merger are reviewed so it gives producers peace of mind.
“As farmers we need that competition out there – its vital for the success of our farm,” said Fournier. “There’s lots of aspects to this so the commissions and APAS – we want to make sure that this is fully vetted through and all the ramifications are examined thoroughly.”
There are six things the groups want to consider should they conduct a risk assessment:
1. Assessment of Historical Consolidation Impacts: An in-depth analysis of the consequences of previous consolidations within Saskatchewan’s agricultural industry.
2. Regional Competition within the Grain Handling System: A comprehensive evaluation of regional competition dynamics throughout the province’s grain handling system.
3. Implications on Agricultural Markets and Supply Chain: A detailed study of the potential implications the merger may have on agricultural markets, commodity pricing, and the overall supply chain.
4. Port Infrastructure Consolidation and International Market Access: An examination of the possible consolidation of port infrastructure and its effects on Saskatchewan’s access to international markets and delivery at inland handling facilities.
5. Market Concentration and Ownership: An assessment of the resulting changes in industry ownership and market concentration within the province.
6. Impact on Employment: An evaluation of the potential impact on head office jobs and employment within the grain industry across Saskatchewan.
The federal government and the Competition Bureau are doing their own reviews into the merger, but a conclusion won’t be reached until next year.
