FNA seeks to buy Wheat Board

The privatization of the CWB (formerly known as the Canadian Wheat Board) is being fasttracked from the government-imposed deadline of 2017, and one of the organizations vying for ownership of the CWB is Farmers of North America, a Saskatchewan-based co-operative that has attempted to build farmer-owned glyphosate and nitrogen fertilizer plants, according to documents obtained by the Leader-Post.

In an email to FNA members in late August, the organization asked for “nonbinding expressions of interest” in buying shares in the privatized CWB. “(We) are here today to ask you for your support to build a world-class farmer-owned grain handling and fertilizer distribution company, starting with the transformational move of purchasing a majority interest in the CWB …”

“As you know the CWB is in the process of privatization. You also know that it has been publicly reported that this privatization is proceeding on an expedited basis,” the letter reads. “This is a rare block of grain handling assets that will likely not come again in our lifetime.”

The letter was referring to the statement on CWB’s website that “the Marketing Freedom for Grain Farmers Act mandates that CWB present a plan for privatization to government by 2016, to be implemented in 2017. CWB is interested in fasttracking our privatization plans, and intends to beat that deadline.”

While the CWB has proposed that farmers who deliver grain to the CWB receive shares on the basis of $5 per tonne, post-privatization, the FNA proposal envisions farmers would purchase controlling interest in the CWB. “We are setting up a farmer-based limited partnership which will need a commitment from between 3,000-10,000 farmers, each investing $10,000-$50,000 or more …” the letter says.

“We must move quickly to ensure farmers can become majority owners in a major grain handling company, capture margins up the value chain, and inject badly needed competition into this industry.”

Bob Friesen, FNA’s vicepresident of government affairs, said in an interview Monday that FNA was “getting a lot of interest” in its purchase proposal. “We’ve sent it to all FNA members. We have around 10,000 farmers in our membership.”

He said the plan to acquire the CWB arose when FNA was pursuing its ProjectN initiative to build a $1.76-billion nitrogen fertilizer plant at Belle Plaine – announced at Canada’s Farm Progress Show in Regina in June.

Friesen, a former president of the Canadian Federation of Agriculture, said the FNA’s objective is to “build a majority farmer-owned grain handling and marketing company. That’s our primary objective. And the reason for that is similar to why we started ProjectN.”

“It suddenly became very clear to us that there were a lot of synergies between that – the fertilizer sales and distribution – and grain handling and marketing. We realized very quickly that the (capital and operating expenditures) of the grain handling and fertilizer sales and distribution facilities would be much higher if you build them separately.”

Friesen said some estimates put the cost of grain handling and marketing to producers at $40 per tonne, or $4 billion a year. “If farmers owned the grain handling and marketing company, we believe we could mitigate a lot of that.”

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