A company that buys farm inputs in bulk says it is being stymied by the establishment.
Farmers of North America Inc. has launched a complaint with the Competition Bureau against 14 manufacturers, distributors and retailers. It says the companies are guilty of collusion, refusal to supply and unfair trading practices.
Steve Nixon, general manager of the Saskatoon-based company, said chemical manufacturers are afraid to sell product to organized groups of farmers because of repercussions they might face from grain companies – their largest customers.
Many of the line companies listed in the complaint were unwilling to comment, but the manufacturers that spoke said Farmers of North America doesn’t fit into their existing distribution channels and that is why they are reluctant to deal with the group.
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An official at the Competition Bureau said the complaint is being investigated under both the bureau’s criminal and civil branches. He has no idea how long the investigations will last.
“It’s like trying to predict when spring will come,” said Eugene Besruky.
On March 6, Farmers of North America sent out a “request for quotation” on a contract for half a million litres of glyphosate on behalf of its 1,300 members. It received no response from 13 of the 14 chemical, wholesaler and grain companies that were approached.
Nixon said Cheminova A/S was the only company that responded to the buying group and it indicated no interest in tendering a quote.
“Why would a manufacturer or a retailer not want to sell a lot of product for cash? It doesn’t make sense,” said Nixon.
The only conclusion he can draw is that the big companies are trying to prevent farmers from uniting to secure better prices.
Dave Anderson, manager of business planning with Dow AgroSciences Canada Inc., said his company chose not to tender a quote because its traditional distribution system of line companies and wholesalers ensures all farmers have access to all of the products. He said the allegations of collusion are unfounded.
Stir the pot
“It’s probable that all companies would react the same way we would because it’s not in our best interest to bypass traditional distribution and thereby bypass all the benefits that traditional distribution brings to a manufacturer such as ourselves,” said Anderson.
He said those distributor services include having product available whenever the farmer needs it, credit terms for customers and the consulting services necessary for selling modern farm chemicals.
Nixon suggested there is something more sinister behind apathy toward the request for price quotations, adding that the snubbing extends to all three major inputs – fuel, fertilizer and chemicals.
He has held discussions with manufacturers who say they would be happy to supply the buying group, but they are afraid of alienating the traditional companies that buy most of their product.
“(The grain companies) do not want FNA to exist. They do not want farmers to get organized in any fashion,” said Nixon.
Monsanto Canada Inc. spokesperson Carman Read said Nixon’s allegations are unfounded. He said Monsanto chemicals must be purchased through the company’s existing network of retailers.
And he said the group’s accusation of collusion is completely bogus.
“We have held no discussions with anybody else regarding this particular request and we responded directly back to them, so I have no idea what they’re talking about.”
