So what do you think? Is the takeover of the CWB by a new Bunge/Saudi joint venture, called G3, a pretty good deal for Western Canadian farmers?
I’m going to be spending the next couple of days calling around and asking people exactly that question. (See some of yesterday’s coverage here.)
I suspect I’ll find that most farm groups and moderate farmers will be happy with the deal. It brings a heavyweight global grain player (Bunge) into the Western Canadian wheat, barley and durum business, which should help add competition for farmers’ grain. It provides farmers with a chance to amass some equity in a significant Canadian grain company, something they have lacked for years now, even if that stake might be potentially gobbled up by G3 in seven years.
Those, to me, seem to be the most important features: 1) more competition created; 2) farmers get a stake in the grain handling industry.
Bunge has always been the most-mentioned name when people have been speculating about who might buy the CWB, so it’s presence in the deal is no shock. The Saudi Agricultural and Livestock Investment Company involvement is an interesting element, and a surprise to most, but also seems to make sense. The Saudis are dangerously reliant on imported food, so like the Chinese, they’ve been hedging their exposure by buying assets in production zones to balance their needs on the consumption side.
Those who felt horrified, outraged and betrayed by the government’s decision to break the Canadian Wheat Board’s monopoly aren’t going to be happy, and their initial press releases make that obvious. To them, this is a giving-away of the vestiges of something farmers built.
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Those on the opposite side of the political spectrum, for whom the government can do no wrong, will think everything is just ducky and another triumph to celebrate.
For the average farmer, who is neither excessively ideological nor partisan, I suspect this will seem like a positive development. Many farmers are beginning to feel too-reliant on the big three grain companies, who all now run impressive elevator-to-overseas pipelines, and many would like to see the slow growth of another option to join the small collection of alternatives they now have. Bunge has the size, power, global reach – and ability to work with farmers – that suggests they can make this new company work out if they choose to put their energy behind it.
But I don’t know what I’ll find. Right after the announcement yesterday I had to run across downtown Winnipeg to another big event – the Manitoba Pork Council annual meeting – so what farmers really think about this I have not yet had time to find out.
That’s what I’m going to start doing today.
