Hey there, time traveller!
This article was published 11/5/2012 (1570 days ago), so information in it may no longer be current.
REGINA -- Saskatchewan farmers stand to benefit on many fronts -- but could lose out on others -- if Glencore's $6.1-billion takeover of Regina grain handler Viterra Inc. goes ahead, says a report released by the province Friday.
The report by Informa Economics, commissioned by the province, says the transaction is likely to improve Saskatchewan farmers' ability to export their crops worldwide and cement the province's reputation as being open for business.
But its says the deal, which would see Glencore sell a large chunk of Viterra's Canadian business to Calgary-based Agrium Inc., raises some concerns about competition for crop nutrients such as nitrogen.
The effect on employment in the province is expected to be mixed and the impact on provincial coffers is expected to be modest.
"There's a positive side to this, and there's concerns that we still have," Agriculture Minister Bob Bjornerud told reporters.
It's up to Ottawa to make the decision as to whether or not the transaction represents a net benefit to Canada.
If the federal government approves the deal, Saskatchewan would want to see conditions that make sure Glencore sticks to its commitments, like keeping a head office presence in Regina.
"I take them at their word, but we would just like a little additional reassurance there," Bjornerud said.
The deal will give Saskatchewan farmers better access to international markets just as the Canadian Wheat Board's monopoly over the sale of wheat and barley comes to an end, the report said.
It also has "generally positive" implications for Saskatchewan's position in the international grain industry.
"The acquisition by Glencore will tie Saskatchewan agriculture into a leading international agricultural commodity marketing network, which will be much needed in a post-CWB environment," it said.
"Glencore is particularly strong as a marketer of wheat into the Middle East, North Africa and Southern Europe, and it has a strong presence in grains in the (European Union). Glencore also has offices in Turkey, Egypt, Dubai and Morocco, where it has the ability to discharge and store wheat at destination."
The Competition Bureau isn't challenging Glencore's takeover of Viterra. But separately, it will weigh the sale of parts of Viterra's business to Winnipeg-based Richardson International and Agrium.
One concern flagged in the report is that Agrium might be able to raise nitrogen prices, since the deal will make it even more vertically integrated in the farm-inputs industry.
It's already a big producer and wholesaler of fertilizer, and the deal will lead to a larger retail footprint.
-- The Canadian Press