FNA proposes farmer-owned grain handling business

SASKATOON — Farmers of North America (FNA) says it has received almost $50 million in non-binding expressions of interest from farmers to build a new grain handling business that could include acquiring the assets from CWB (formerly known as the Canadian Wheat Board), and would be integrated with a proposed fertilizer supply and distribution project at Belle Plaine.

FNA, a Saskatchewanbased co-operative, has created Genesis Grain & Fertilizer Limited Partnership through which the Genesis Project would be developed.

Part of the Genesis project includes the possible acquisition of the CWB, said Bob Friesen, vice-president of government affairs for FNA.

“We are not proposing to resurrect the Wheat Board,” Friesen said. “We are proposing farmers buy the CWB assets purely for commercial reasons to move us more quickly to a farmerowned Genesis Grain & Fertilizer and to allow us to hit the ground running.”

Friesen said an offering memorandum in connection with Genesis has been issued with a minimum goal of $20 million up to a maximum of $380 million.

The farmer-based limited partnership would need a commitment from 3,000 to 10,000 farmers, each investing $10,000 — $50,000.

“We need at least $20 million to start building our fertilizer distribution and to build on the strategy we have developed,” Friesen said.

The plan to acquire the CWB arose when FNA was pursuing its ProjectN initiative to build a $1.76 billion nitrogen fertilizer plant at Belle Plaine.

FNA president James Mann said there is a tight timeline for privatization of the CWB and there have been discussions with government officials in the hopes of holding off any decisions on the CWB until FNA was able to talk to more farmers about buying the assets.

The privatization of the CWB is being fast-tracked from the government-imposed deadline of 2017.

Farmers need six weeks to two months to review the opportunity and make a decision, Mann said

“99 PER CENT OF FARMERS (WHO ATTENDED) HAVE SHOWN OVERWHELMING SUPPORT FOR A FARMER-OWNED GRAIN HANDLING AND MARKETING BUSINESS.” BOB FRIESEN

Over the last three weeks FNA have held more than 100 town hall meetings and “99 per cent of farmers (who attended) have shown overwhelming support for a farmer-owned grain handling and marketing business,” Friesen added.

He said some estimates put the cost of grain handling and marketing to producers at $40 per tonne, or $4 billion a year.

There are strong synergies between fertilizer distribution and grain handling and marketing, plus farmers would not be losing “excessive margins” to companies that they are currently dealing with, Mann added.

“The only solution we have to protect (them) from excess margins is to own the business to capture those margins.”

Mann said whether the CWB assets are acquired, the Genesis Grain & Fertilizer project will go ahead as long as they get a minimum $20 million.