The ability of farmers to exercise some influence and control in the grain handling industry may be at stake in the ongoing saga over the ownership of Vancouver’s grain terminals.
“This is a very, very important time,” said Garth Gish of Terminal One Vancouver, a consortium of small, independent Saskatchewan grain companies trying to buy the Agricore United grain terminal at the west coast port.
“It’s really an opportunity to change the future of the grain industry.”
Terminal One’s efforts to buy the AU facility, which is being sold under a 2002 order from the federal competition bureau, hit a roadblock with the bureau’s refusal to grant the two parties an extension to the Aug. 15 deadline for a sale to be completed.
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Gish said Terminal One has not given up hope of acquiring the terminal, adding it’s in the interest of all prairie grain farmers to see the deal salvaged.
“I’m not going to be farming 20 years from now, but for those who are, to not see this opportunity brought to fruition would be a real disappointment and a real loss,” he said.
At the time the proposed deal was announced in May, Gish described it as a “once-in-three-lifetimes” opportunity for prairie farmers to regain a foothold in the grain handling industry, something that disappeared with the demise of the prairie grain handling co-operatives.
There was talk that ownership of the terminal could eventually lead to creation of a farmer-based grain exporting company and a shake-up in the country grain handling industry.
The Terminal One board met last week and decided to continue with its efforts to complete the purchase, although Gish declined to provide any details of how that might happen.
The main stumbling block has been the consortium’s inability to secure enough grain from other independent shippers to ensure the terminal’s viability. Potential partners are all tied into handling agreements with the big four grain terminal operators, an issue project supporters say should also be a concern to the competition bureau.
Gish said he doesn’t think the bureau understands how important the issue is for western Canadian farmers.
If it did, and if it truly cared about opening the Vancouver grain handling market to more competition, it wouldn’t have refused the two companies a couple more weeks to consummate the deal.
“If competition is your goal, then you have everything to gain and nothing to lose by granting an extension,” he said. “It’s very hard to comprehend what was behind the decision.”
Competition bureau officials, citing confidentiality issues, have declined to offer an explanation for the decision to deny an extension.
Meanwhile, both Terminal One and AU say the bureau should carefully scrutinize the proposal by Saskatchewan Wheat Pool and James Richardson International to jointly operate their Vancouver terminals.
Those two firms announced in April they would operate their terminals, the only two on Vancouver’s north shore, through a new jointly owned management company.
In a legal brief submitted to the federal competition tribunal, AU said that if the bureau allows the JRI-SWP proposal to go ahead, then AU should no longer be required to sell one of its terminals.
“A failure to challenge (it) in the current market conditions would imply a lack of current grounds to require a divestiture of a port terminal by AU,” said the AU brief.
The bureau is reviewing the JRI-SWP proposal, but in July granted the two companies permission to implement some aspects of the joint venture, operating as Pacific Gateway Terminal Ltd.
Together, the JRI and SWP terminals have licensed storage capacity of 345,240 tonnes, representing about 36 percent of the port’s total.
Gish said both SWP and JRI have grain handling agreements with some of the same independent grain companies that Terminal One could do business with.
“What the bureau rules on that JRI-SWP merger could have an impact on the availability of uncommitted tonnes,” he said.
