Canada fertilizer deal would send farmers to regulators

Wed Aug 31, 2016 6:54pm EDT
 
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By Rod Nickel and Michael Hirtzer

WINNIPEG/CHICAGO Aug 31 (Reuters) - North American farmers will pressure regulators to protect their negotiating leverage with fertilizer suppliers if Potash Corp of Saskatchewan and Agrium Inc agree to merge, major farm groups said on Wednesday.

The potential deal revealed on Tuesday would combine the world's largest fertilizer producer by capacity with the continent's biggest network of farm retail dealers and consolidate 60 percent of North America's potash production with one company.

The tie-up would face regulatory scrutiny in both the United States and Canada.

For farmers, already facing the prospect of fewer buying choices for seed and chemicals, the potential merger raises fears they will lose pricing power. Independent retailers in the United States and Canada worry about competing against a fertilizer Goliath that may stock its stores at preferential rates.

"It's like the movie 'Mad Max' - one company owns everything," said Norm Hall, president of Agricultural Producers Association of Saskatchewan. "There's less and less competition out there. We're being painted into a box because of corporate greed."

The group, based in Canada's largest crop-growing province, will raise concerns with the federal Competition Bureau if the merger proceeds, Hall said.

Likewise, Manitoba's Keystone Agricultural Producers will ask the bureau to weigh the risk of higher farm costs, said president Dan Mazier.

The Competition Bureau routinely contacts industry groups when it reviews proposed mergers, said spokeswoman Sophie Paluck-Bastien.   Continued...