Canada: Bunge-Viterra merger approval highlights myth of competition and need for effective regulation, says NFU
PRESS RELEASE BY NATIONAL FARMERS’ UNION, CANADA
Saskatoon – Canada’s approval of Bunge’s acquisition of Viterra effectively ends competition in Canada’ agriculture commodity sector by giving control of 40% of our grain market to what will become the world’s largest agricultural commodity trader. It is time to abandon the myth of competition and get serious about regulation to protect the public interest. We need a stronger, fully funded Canadian Grain Commission with enhanced authority to protect the interests of farmers.
The NFU and other farm organizations outlined clear harms to Canada’s farmers, which were blatantly disregarded. Both the degree of market power concentration and the specific ways Bunge and Viterra assets are structured will increase the merged company’s ability to annually extract hundreds of millions in excess profits from Canadian farmers – and by extension, from our communities and the Canadian economy as a whole.
Canada’s decision puts very light conditions on Bunge. Farm organizations universally opposed the merger. Selling off a few elevators, urging the new company to put some of the higher profits it will make into investments in Canada, keeping its head office in Regina for five years, and putting up a paper firewall between Bunge and the directors it will appoint to G3’s board, will hardly counter the increase in Bunge’s power to influence markets, prices and production within Canada and internationally.
When the merger is finalized, ADM, Bunge, Cargill, and Louis-Dreyfus, will continue to dominate internationally, with Bunge now in first place. Together these four giants control 70% of the world’s grain trade. A 4 firm Concentration Ratio (CR4) above 40% is considered monopolistic. In Canada, the CR4 for grain companies (counting G3 as a de facto Bunge asset) will be 88% .
In her announcement, Transport Minister Anand stated that the merger approval with conditions serves the public interest. Like all corporations, Bunge’s first duty is to its shareholders, and it is certain that its own private interests will guide its decisions. The NFU therefore urges the federal government to ensure the Canadian Grain Commission and other relevant regulators have increased capacity and authority to safeguard farmers’ interests in the face of Bunge’s domination of our grain sector.
Background Information:
- Bunge-Viterra merger has drastic implications for Canadian farmers, June 27, 2023
- Farmers Would Lose Hundreds Of Millions Of Dollars If Bunge-Viterra Merger Gets Green Light, May 29, 2024
- Bunge-Viterra deal highlights need for new approach to merger reviews, September 3, 2024
- The Economic Impact of the Proposed Bunge-Viterra (BV) Merger on the Grain Sector in Western Canada: A Preliminary Assessment by Gray, Nolan, & Slade. Research support for the study was provided by the Agricultural Producers Association of Saskatchewan (APAS), Alberta Grains, the Saskatchewan Barley Development Commission, and the Saskatchewan Wheat Development Commission.