Now that the dismantling of the Canadian Wheat Board is imminent, Viterra, Inc., the Regina-based company that handles 45 per cent of Western Canada’s grain, is fielding takeover bids from “third parties,” according to a statement on its website. The Wall Street Journal reported Sunday that American agribusiness giant Cargill and Switzerland’s Glencore International are among the most high profile bidders for the company. As rumours of a takeover spread, Viterra’s stock prices soared, giving the company a market capitalization of more than $5 billion.
The prospect of an international company taking over such a large portion of Canada’s agricultural sector will likely stir up controversy. The federal NDP has already been critical. “I’m concerned that the independent Prairie farmer will turn into more of a serf to international agrifood giants, and that we will no longer be price setters of our commodities, we will be price-takers as dictated by someone else,” NDP MP Pat Martin told the Canadian Press in Ottawa.
Critics of the Conservative government’s move to disband the Wheat Board have argued that wheat and barley farmers in the Prairies would suffer without the price guarantees offered by the monopoly system. They contend the main benefactors of an open system, where farmers sell their produce directly to grain handlers and processors, will be large corporations that own the transportation networks necessary to get grain to market. “This market share was delivered on a silver platter to these international agrifood giants,” said Martin.
The situation is reminiscent of Anglo-Australian firm BHP Billiton’s bid to buy the Potash Corp. of Saskatchewan in late 2010. The proposed deal fueled a national discussion on Canada’s foreign takeover regulations after then-Industry Minister Tony Clement blocked the sale. That move was deemed widely to be politically strategic, since Saskatchewan Premier Brad Wall enjoyed a significant popularity boost by championing the domestic ownership of Saskatchewan’s potash industry.