It is both a surprise and not a surprise that federal Minister of Transport Anita Anand on Monday approved the takeover of one giant agribusiness company by another, a move that will inevitably lessen competition in a key Canadian agricultural sector.
A surprise, because Canada’s Competition Bureau said last year that U.S.-based Bunge Global’s acquisition of Viterra Ltd., a long-standing Western Canadian firm now owned by a Swiss commodity trader, would harm farmers who sell their grain and oilseed to those companies.
And not a surprise, because approving the deal is in keeping with Ottawa’s long-standing devotion to corporate concentration in agriculture. Any hope that Ms. Anand might have said no to Bunge’s takeover cut against the grain of recent history.
Since 2000, Ottawa has allowed 31 out of 31 proposed mergers and acquisitions in agri-food to go through, the Canadian Anti-Monopoly Project (CAMP) said in a report last year.
So why stop now – even if the Viterra buyout will harm farmers. Research by the University of Saskatchewan estimated farmers could lose $770-million in annual revenue.
The buyout will combine two of the country’s largest purchasers of canola and give Bunge control of seven of 14 oilseed-crushing facilities in Canada. Bunge will also control 33 per cent of primary elevator capacity in Western Canada, the Competition Bureau says.
As well, Bunge has a 25-per-cent interest in G3 Global (the other 75 per cent belonging to Saudi Agricultural and Livestock Investment Co.). That company owns 19 grain elevators in Western Canada and one grain elevator in Quebec.
The three companies also own port facilities, but the issue for farmers is the decreased competition for their grains and oilseeds when they take them to market at grain elevators. Having fewer buyers can make it harder for them to get a fair price for their goods.
Ms. Anand has attempted to limit the damage by forcing Bunge to sell off six grain elevators and to place independent directors on the board of G3 who will be forbidden from sharing critical information with Bunge – an acknowledgement of the risk of anti-competitive behaviour.
Bunge will also have to maintain its head office in Regina and employ at least 200 people there. And it has to commit to $500-million in capital expenditures in Canada within five years of the deal closing.
But all that does little for Canadian farmers, who are already squeezed by a high level of corporate concentration that forces them to sell their products at a lower price to fewer buyers, while at the same time paying higher prices for inputs such as seeds, machinery, fertilizer and veterinary medicines purchased from international oligopolies.
CAMP says Canadian canola growers are dependent on just two companies for their seeds. The National Farmers Union said in a 2023 brief that four companies control 95 per cent of Canada’s ammonia fertilizer business and 100 per cent of the urea fertilizer business.
In the beef industry, two companies control 99 per cent of Canada’s federally inspected slaughter capacity, according to the National Farmers Union. Between them, they operate only three facilities.
An upshot of all this has been the disappearance of small family farms. Ninety per cent of Canadian farms produce just one-third of all revenues, according to Statistics Canada. The other 70 per cent is earned by large-scale operations that benefit from consolidation.
Ottawa continues to reduce the ability of the vast majority of Canadian farms to make a fair living, while simultaneously maintaining a supply management system in dairy, eggs and poultry that sets high prices for those products while protecting them from competition. Ottawa also permits a grocery-store market controlled by a handful of companies.
Canada has an addiction to concentrated markets when it comes the agri-food industry. The people at either ends – farmers and consumers – are obliged to pay a cost created by the bureaucrats and multinational corporations that control the middle.
Ms. Anand should have broken that habit by stopping Bunge’s buyout, or by at least forcing the company to sells its interest in G3 Global to ensure that grain and oilseed farmers benefit from what remains of the competition in their sector. Instead, she added one more burden to their lives.