A bid by the Farmers of North America (FNA) to acquire the Canadian Wheat Board (CWB) has been rejected by the formerly farmer-operated organization, but FNA says they will try again.
Bob Friesen, FNA vice-president for government relations, says acquiring CWB assets would assist the FNA develop a program called the Farmers’ Fertilizer Alliance — Project N — which is intended to put production of fertilizer in the hands of farmers.
Friesen says the CWB assets would give farmers control over grain handling and fertilizer distribution at one location. “We know that farmers are going to pay for a grain company. The question is do farmers want to pay for their own or do they want to pay for someone else’s?”
Friesen says in their attempt to garner interest from farmers, they were restricted in the information they were allowed to provide to potential investors and had little time to do it.
“The problem was we only got clearance from CWB management what we could tell farmers early in September,” said Friesen.
The challenge they faced was trying to speak with farmers during a busy harvest season and being restricted in what they could say made enticing investment difficult. Despite that Friesen says farmers were willing to invest $50 million in the project.
Over the last 18 months, the CWB opened up the possibilities of privatization.
“We were very confident that if we had additional time after harvest, we could easily get enough farmers as well as adequate capital to make a successful bid for the CWB. That’s why we asked for more time,” said Friesen.
The CWB’s decision to reject their bid troubled Friesen. A request for comment from the CWB was declined and a request for comment from the Ministry of Agriculture was not immediately returned.
“We can only assume that a company will be successful,” said Friesen.
Two years ago, the CWB announced a producer equity plan stating that every time farmers delivered their crop to the organization, a portion would be set aside in a trust fund. This was intended to represent a level of farmer ownership in the CWB.
However, when it was implemented, a public disclosure document stated the CWB would not guarantee what portion of the trust would be if privatized. Friesen said the FNA had intended to gain 90 per cent ownership of the trust and would use that as part of the acquisition.
He says they intend to continue with the project to have grain handling and fertilizer distribution in one location. Friesen says they are going to submit an amended acquisition request.
“We will continue to raise equity from farmers to build,” he said.
The FNA is a member-based organization with more than 10,000 farmer members across North America. The organization has four main goals: increasing competition in the market, driving efficiencies in the value chain, providing timely information to its members and supporting opportunities for farmers to achieve equity ownership in the value chain.