CWB rejects FNA bid for assets
A bid by Farmers of North America (FNA) and AgraCity Crop Nutrition to acquire the CWB has been rejected.
“It is very disappointing,” said FNA spokesperson Bob Friesen.
The privatization of the CWB (formerly known as the Canadian Wheat Board) is being fast-tracked from the government-imposed deadline of 2017.
FNA, a Saskatchewanbased company, wanted to acquire the CWB assets as part of its plans to build a grain handling and fertilizer company, Genesis Grain Fertilizer Limited Partnership, that would be majorityowned by farmers.
Acquiring the CWB would help build Genesis Grain Fertilizer into a farmer owned, globally competitive grain company, Friesen said.
For the past month and a half the FNA has been holding town hall meetings and asking farmers for “nonbinding expressions of interest” in buying shares in the privatized CWB.
Friesen said in that time 1,000 farmers expressed interest in acquiring CWB and investing in Genesis.
He said the latest setback will not stop the plans for a new grain handling and fertilizer company, adding farmers are frustrated by the grain handling and marketing charges margins they pay every year.
“We will continue to build Genesis Grain Fertilizer. We know there is strong synergies between grain handling and fertilizer distribution,” said Friesen. And despite the rejection FNA will continue consulting with farmers about their interest in the CWB and pressure the government to have CWB reconsider the bid.
“We are also asking the Agriculture Minister to instruct the CWB to give us more time,” Friesen said. “We are confident we could raise the appropriate amount of capital to make a successful acquisition of the CWB if we could talk to more farmers after the harvest is done.”
FNA president James Mann said farmers need to own their own grain company along with fertilizer distribution facilities.
“If farmers can’t acquire the CWB, we believe they will build their own efficient, globally competitive business with the grain they own and the fertilizer they buy, as farmers have done in many competitor countries,” Mann said in a press release.
“After the difficulties last year when farmers were held to ransom by grain companies – being offered discounted prices far below the true world price of their grain – farmers want to own part of the value chain to accrue grain company margins.”
Some of CWB’s prime assets include hopper cars and a pair of eastern port positions.
In an email the CWB said it would not comment on any specific proposals.