The federal government’s approval of the Bunge-Viterra merger – along with the attached conditions – has received just a lukewarm response from Saskatchewan farmers.
The Agricultural Producers Association of Saskatchewan (APAS) said in a statement Wednesday that while it acknowledged Ottawa’s efforts in trying to blunt the potential negative impacts of the deal for farmers, only time and a close monitoring of the situation will really tell the tale.
"The government's decision has begun to address critical issues we've raised, particularly around the need for enhanced competitiveness and sustainability for farmers,” said APAS President Bill Prybylski. “However, achieving real progress requires these policies to move beyond initial promises towards practical and impactful outcomes."
As part of its approval of the $8.2-billion merger between the two agribusinesses on Tuesday, the government set out several conditions, including that strict and legally binding controls are needed on U.S.-based Bunge’s minority ownership stake in G3 Global Holdings – a major competitor to Viterra - to ensure it can’t influence that company’s pricing or investment decisions.
Ottawa further said Bunge must divest itself of six grain elevators in Western Canada, which will “maintain competitive options for farmers in the region.”
Other conditions of the deal include a price protection program for certain purchasers of canola oil in Central and Atlantic Canada to safeguard fair pricing and market stability; retaining Viterra’s head office in Regina for at least five years to protect Canadian jobs; and a binding commitment from Bunge to invest at least $520 million in Canada within the next five years.
Last spring, a study commissioned by Prairie agricultural groups concluded the planned Bunge-Viterra merger was likely to result in substantial anti-competitive effects and harm competition in markets for grain purchasing. The study said the deal could end up costing farmers more than $700 million annually.
