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Three Plus One Equals Four Grain Buyers in Western Canada and the CWB Stays

Apr 20, 2015
 
By Harry Siemens of www.SiemensSays.com
 
 For many the new CWB and the former Canadian Wheat Board couldn’t be bothered because it was a non-issue  before the feds demolished the monopoly other than an intrusion sometimes. For others, the diehards, those who feel they’re still owed despite no evidence they actually own something other than the mortgage of the building worth less than the price on the books and several mortgaged sea-worthy vessels.
 
However, (Just like – spring) everyone knew it was coming but when it arrived – the announcement Wednesday the feds and CWB people had actually sold the former Canadian Wheat Board, now the CWB for $250 million dollars seemed almost surreal.
 
But there it was – all the controversy since the feds announced in January of 2012 they’d privatise the  Wheat Board would is so much water under the bridge.
 
A Company called G3 Global grain  will ante up $250 million for a 50.1 percent share of  the CWB, and the same entity will hold the other 49.9 percent in a trust set up by CWB in 2013. Farmers may take a position with the trust by delivering grain in return for $5 per tonne equity.
 
Federal ag minister Gerry Ritz in Winnipeg for the announcement Wednesday says the single fundamental reform the feds brought to the industry is an open market for western Canadian wheat and barley producers.
 
The CWB will offer farmers equity in the new entity for up to 7 years –they can receive $5 equity credits  per tonne of grain delivered. But after 7 years 3G may offer to buy them out but the G3 company has the right to determine that at the end of 7 years. As one company spokesperson says it is hard, obviously impossible to look into the future seven years and determine today what they will do.
 
To me it is also obvious that if that feature is working, and farmers are doing business with G3 because of it, they’ll fine-tune it to that purpose.
 
Dan Mazier, farmer and new president of the Keystone Agricultural Producers says farmers get a new buyer, a new purchaser of grain in western Canada and moving forward with the CWB. He sees very little controversy on the equity plan,either.
 
“This historic legislation restored to farmers a basic business freedom, denied to them for decades the right to market their own grain to a company and time of their own choosing,” says Ritz.
 
G3 Global grain group is a partnership between Bunge Canada and SALIC – an
 
acronym for the Saudi Arabia Agricultural and Livestock Investment Company.
 
Yes, I’m not sure why a Saudi Arabian company needs to be part of this, but I take comfort in a company like Bunge, just recently spending $250 million plus on a canola crushing plant in Altona will be in the driver’s seat, although the CWB management will do the driving for the most part.
 
You see Bunge, while big in canola couldn’t get traction in the grain sector because they didn’t have the infrastructure to pull it off. Now it does and the Saudis helped bankroll the plan.
 
The news conference lasted nearly 50  minutes with reporters both in Winnipeg and on the phone both in Canada and the U.S. showing huge interest in this matter.
 
CWB CEO Ian White and Dayna Spring, the CWB’s chief strategy officer, whom
 
along with White led the search team as she said it, virtually  around the world, meeting with over 50 potential buyers of CWB before coming up with the G3 arrangement.
 
Former Can Oat Milling and Viterra manager Karl Gerrand is the new president of G3 Global Grain while Ian White stays at the helm of the CWB.
 
The questions indicates that some media and other observers continue to argue the new deal will not adequately protect farmers interests.
 
Recapping. the former Canadian Wheat Board will continue to operate as CWB but after the deal closes majority interest will lie with Bunge Canada and Saudi Arabian interests – a company called G3 Global grain.
 
As I said since the feds announced the legislation to remove the single desk selling desk, the monopoly and made it happen August 1, 2012, it is a good deal for western Canadian farmers, the western Canadian economy, Canada, and the companies involved.
 
By Harry Siemens