Economist defends Bunge-Viterra report
I’m responding to statements made in an op-ed on page 11 of the May 16 issue by Gregory Heckman, chief executive officer of Bunge. I was one of the academics who wrote a report on the implications of the proposed Bunge-Viterra merger.
I need to clarify the misleading statement that we “refused to share our data.” As I pointed out at the time of the request, every number used in the Cournot simulation model is presented and explained in the public 27-page report. There is no hidden data to share. The data is all published in the report, which is posted on SaskWheat’s website.
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We also included an appendix in the report to precisely explain the steps involved in creating the model. Our model was provided to the federal Competition Bureau and to Transport Canada for their inspection.
While it is true that our analysis is based on assumptions, I can’t imagine analyzing a merger that has not yet taken place without some assumptions.
The Cournot model we employed is a standard used for merger analysis, largely because the economic model has been shown to be predictive over time, in multiple industries.
To suggest that Bunge will not influence the management of both G3 and the Bunge-Viterra merged firm is naïve and stands in contrast to many economic studies examining the effects of common major shareholders across firms. I’ll also point out that the Competition Bureau report concurs with our perspective and urge those interested to read Section 8.2 of the bureau’s report.
Firms have a responsibility to maximize the return to their shareholders. Merging is what overbuilt industries often do to reduce price competition. That is precisely why mergers are reviewed as part of competition policy in most developed countries.
In our study, we found that a Bunge-Viterra merger would reduce price competition in the grain industry to the detriment of grain producers. This result should not be surprising.
Richard Gray (Ph.D)
professor and grain policy chair
University of Saskatchewan
Access to land sales date necessary
Thank you for publishing the May 16, 2024, article in your paper, “Data changes leave farmland buyers, sellers in the dark,“ by Karen Briere.
My family and I have a farm near Rouleau, Sask., and I share the concerns raised by Shaun Wildman in the article that it is important to see who bought farmland and at what price. I am writing to add my voice to Mr. Wildman’s. I think the same information should be available to all users.
I am concerned with changes to the land sales information database that have seen the removal of the names of vendors and purchasers from land sales information for users other than large users with a subscription.
I understand the reason for the change was solely based on the issue of privacy. Now farmers have been made disadvantaged to the financiers, appraisers and governments because someone, after decades of use, decided privacy was an issue. Where is the balance?
In the interest of full disclosure, I did work with the Farm Land Security Board for many years until about three years ago.
The Farm Land Security Board originally developed the land sales database. My experience was that small users and large users of the land sales data alike were pleased with the reasonably priced access they had to land sales data.
Thank you once again for covering this issue and please do continue your coverage.
Jim Chernick,
Rouleau, Sask.
