Sask. MLAs have a keen eye on the Bunge-Viterra merger

As the proposed Bunge-Viterra merger makes it way through the regulatory approval process of the Competition Bureau, it was a featured topic of debate in the Saskatchewan Legislature Thursday.

It surfaced in Question Period when NDP Ag Critic Trent Wotherspoon accused the SaskParty government of being silent over the file. Wotherspoon says he asked Agriculture Minister David Marit in a committee meeting what he has done on the issue and claims Marit didn’t say anything.

“Not a word,” said Wotherspoon. “This is a bad deal for producers in our province and it shouldn’t go ahead. What’s that Premier going to do to stand up for Saskatchewan?”

Finance Minister Donna Harpauer responded, saying Marit has indeed been proactive by consulting with stakeholders about the merger as well as talking to leadership from Bunge and Viterra to ensure feedback from producers was being heard.

“He made a submission through the Ministry of Agriculture to Transport Canada and Competition Bureau, raising the stakeholder concerns that he heard and the Competition Bureau’s report addresses some of those producers’ concerns,” Harpauer said. “And we will continue to monitor it as it goes forward.”

Wotherspoon then quoted concerns from a joint news release from SaskWheat, SaskBarley, and the Agricultural Producers Association of Saskatchewan (APAS), saying “the merger may also reduce incentives for Viterra to build its proposed canola crush facility in Regina, Saskatchewan” and “the increase in export basis and canola crush margins would reduce producer income by approximately $770-million per year.” 

“Why hasn’t that minister (David Marit), why hasn’t that Premier done anything to stop this bad deal for Saskatchewan?” Wotherspoon asked again.

Harpauer repeated her previous answer, but later on Premier Scott Moe replied that the provincial government is committed to supporting the ag industry.

“The current Ag Minister is going to have the back of our agricultural producers day in and day out, Mr. Speaker…has his entire career because he’s one of them,” Moe said of Minister Marit. “We know that the Competition Bureau has made comments on this. We’re now looking at the companies and to the reaction that companies are going to make and we’re watching that very closely, Mr. Speaker. If the Opposite members think for one minute that myself or this Ag Minister or this government or the MLAs on the governing side are not going to stand up for the agriculture industry…they got another thing coming.”

Main concerns the Competition Bureau has with the merger include reduced competition for grain buying in Western Canada, and Bunge potentially influencing the behaviour of G3, a company Bunge is a minority shareholder with, and is a competitor to Viterra.

Both companies say those concerns are misplaced but will provide additional information to the Bureau and Transport Canada to address them.

After Question Period, Moe told reporters the metrics the government will be using when observing the merger is whether its in the best interest of the ag community when it comes to securing market access for producers.

But the provincial government does have two main questions: one is what happens to jobs at the Viterra Head Office in downtown Regina and two, whether Viterra’s plans to build a canola crush plant in Regina will proceed after the merger.

“Those are precisely some of the questions that our Minister of Ag is asking as this merger finds its way through,” Moe said. “We understand that Bunge is an international-operating company and we’re not asking them to move their head office here, but we certainly don’t want to lose access for our primary producers, but we don’t want to lose the jobs that are currently Viterra jobs here in Regina. 

“We worked, I think as a government, hard to provide the environment for investment into that ag value-added space — renewable fuel space is some of that — and we see that investment happening here in Regina and in Yorkton in significant ways and in Saskatoon as well,” Moe said of investments made in projects such as the addition of canola crush plants in Yorkton. “That much is on our radar as part of the conversation as well as these merger talks transpire and find their way through the process.”

Comparisons were made to the 2010 proposed takeover of PotashCorp by BHP Billiton, but Moe says that and the proposed acquisition of Viterra by Bunge are entirely different in terms of industry, and the fact there are more players involved in grain buying, such as Richardson and Cargill.

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