Ottawa-The $8.2 billion takeover of Viterra Ltd. by Bunge Global SA has been approved by the federal government with terms and conditions to protect competition and encourage investment in Canada that alarm the Canadian Federation of Agriculture (CFA) and Grain Gowers of Canada (GGC).

Anita Anand, Transport and Internal Trade Minister, said the conditions Bunge must meet are intended to foster healthy competition growth and productivity in the transportation and agricultural sectors and will help ensure that the acquisition will not have a negative impact on competition in Canada’s grain and oilseed sector, notably for grain purchasing in Western Canada and the sale of canola oil in Central and Atlantic Canada. Farmers will have a wide range of competitive options when they sell their canola and other crops, as well as continue to receive fair prices for their produce.

Kyle Larkin, GGC Executive Director, said the government did not go far enough in imposing competitive terms on the deal, which should have included requiring Bunge to completely divest it shares in the G3 grain company. “The divestment of six grain elevators is a token gesture in the face of a company that maintains a 25 per cent stake in G3, greatly reducing competition across the Prairies and in Quebec. These conditions do little to offset the $770 million annual cost this merger will impose on farmers.”

Overall, the conditions imposed on the deal are woefully inadequate to address the profound impact on market competition, he said.

CFA President Keith Currie said the deal does not go far enough to truly ensure a competitive marketplace for Canadian farmers. “We need to ensure that, at a minimum, the conditions set around this deal are being met. Our concerns from the beginning were that this deal would not be in the best interests of farmers and the fact that Bunge has maintained its minority ownership stake in G3 certainly furthers those concerns. Unfortunately, at the end of the day, it is the farmers who will pay.”

Both the federal Competition Bureau and University of Saskatchewan research found that the deal, without a divestment of G3, would result in hundreds of millions of dollars in lost revenue for farmers every year. CFA believes “it’s critical that government ensures all parties are financially accountable to commitments they put forward while going through the merger process. Further steps should also be taken to ensure subsequent merger reviews closely consider the impact of any further consolidation on Canadian producers in what are already highly concentrated upstream industries.”

Anand said the takeover “underscores the importance of promoting economic growth in Canada, while maintaining robust oversight to protect competition and the public interest. We are committed to supporting a strong economy, including in the agricultural and transportation sectors.”

The deal requires Bunge to sell six Prairie grain elevators in Western Canada to maintain competitive options for farmers in the region and accept strict and legally binding controls on its minority ownership stake in G3 so it cannot influence G3’s pricing or investment decisions. There must also be a price protection program for certain purchasers of canola oil in Central and Atlantic Canada to safeguard fair pricing and market stability. Also Bunge must invest at least $520 million in Canada within the next five years to foster economic growth, productivity and job creation as well met more than 20 other conditions intended to enhance the public interest benefits of the acquisition.

Larkin said the federal decision will be “a direct hit to producers’ revenue.” The average grain farm in Manitoba stands to lose $10,000 in revenue annually. “This is a missed opportunity to protect competition in Canada’s grain sector and prioritize the interests of producers who grow the food that Canada and the world rely on. We are urging the government to revisit these conditions, strengthen measures to foster competition, and take meaningful steps to support Canada’s grain farmers.”

This  news report prepared for National Newswatch