Ag input buying group Farmers of North America (FNA) says its proposal to buy the grain firm formerly known as the Canadian Wheat Board has been rebuffed.
Saskatoon-based FNA said Monday its proposal — which called for CWB’s assets to become part of an farmer-owned grain handling and fertilizer manufacturing and marketing organization dubbed Genesis Grain and Fertilizer — was “rejected by CWB management” in a phone call with FNA officials last week.
FNA and a sister company, AgraCity, earlier this month went to Ottawa urging officials with Agriculture and Agri-Food Canada and staff from Agriculture Minister Gerry Ritz’s office to spot them another six weeks to two months, in which farmers could “fully assess” their ability to invest in the Genesis proposal. [Related story]
However, FNA said Monday, “the deadline for raising capital passed before harvest was completed, denying farmers adequate time.”
As of Monday, FNA said it has received non-binding “expressions of interest” for $50 million from farmer-investors. Its proposal calls for share purchases at $1,000 per unit, with a minimum buy-in of 10 units.
Bob Friesen, FNA’s vice-president for government relations, reiterated Monday that FNA and AgraCity plan to build Genesis anyway, “but a successful acquisition of the CWB block of assets would have allowed us to hit the ground running.”
A spokesperson for Winnipeg-based CWB said Monday the company is not commenting on any specific proposals.
In an email late Monday, Ritz said CWB’s privatization “is not a political process.”
CWB, he said, “will assess all serious bidders and then submit a plan for commercialization to the government” as per the legislation under which the Wheat Board’s single marketing desk for Prairie wheat and barley was deregulated in 2012.
CWB, Ritz noted, is “increasing its capacity to remain a vibrant marketing option for farmers.”
Farmers, Friesen said, are going to be paying for a farmer-owned grain firm and have indicated they want to be part of CWB’s acquisition. “Which part of this doesn’t CWB management get?”
FNA president James Mann, in Monday’s release, said CWB has essentially decided to reject an offer by farmers which “would have facilitated farmer delivery loyalty through deferred delivery commitments to ensure volume for financial sustainability.
“Then, when the dust settles after majority ownership acquisition by another company, potentially foreign, (CWB brass) will expect farmers to come back and deliver to the CWB anyway.”
However, he said, if farmers can’t take over CWB, “we believe (farmers) will build their own efficient, globally competitive business with the grain they own and the fertilizer they buy, as farmers have done in many competitor countries.”
Friesen also noted concern over the status of CWB’s own farmer equity plan, quoting CWB’s public disclosure documents as saying there can be “no assurance” of the value of any eligible producer’s stake in CWB, once the former Wheat Board is fully privatized as expected by 2017.
“It sounds like farmers shouldn’t depend on that having a lot of value,” he said.
FNA tentatively plans to resume its ongoing town-hall meetings with Prairie farmers on the Genesis proposal next month, Friesen said. — AGCanada.com Network