It didn't take long for the Canadiain Wheat Board shake up to have a ripple effect. Late last week Viterra, formerly the Saskatchewan Wheat Pool, made it be known there are suitors out there looking to buy the Regina based grain giant.
At least, we might think it is a giant, having absorbed what was once the Saskatchewan Wheat Pool, Alberta Wheat Pool, Manitoba Pool Elevators and United Grain Growers. This includes the intermediate companies known as Agricore and Agricore United.
But on the world stage, what's $5 billion or so? Not much, it would seem, and so there are several companies that may be in the bidding. Even though as of the time of writing we don't know who the bidders are yet, the announcement they even exist makes a sale seem like a foregone conclusion. Viterra will be sold, and to foreign interests.
There are generations of Wheat Pool members turning over in their graves as we speak.
With the province already saying it's not going to bat for the Wheat Pool, sorry, Viterra, in the manner it did for Potash Corp., the bidding starts now.
I like to think I believe in free trade and foreign investment, but recent history is full of examples where the sales of Canadian champion companies have gone bad. Can anyone say Inco? How about our steel industry, which, once strong, is now almost completely foreign owned, and in tatters in Central Canada.
Viterra is the largest Canadian company in the agriculture sector. Its headquarters are at the corner of Albert and Victoria, the very centre of our capital. I imagine it will soon be a branch office, although Boyd Erman of the Globe and Mail says it already is. He wrote on March 12, "Viterra, like Potash Corp., has spirited many of its head office jobs out of the province while keeping a headquarters there in name only. Yet it remains tied deeply into the province's fabric and history. The company's roots are in the farmer-owned Saskatchewan Wheat Pool. In scores of small towns, including the one I grew up in, the grain elevators of Viterra and its rivals offer the only hint of a skyline."
Fighting the dominance of big grain companies was the very raison d'etre of the Wheat Pool. Now, if it is sold wholesale to foreign interests, the Pool's journey to the Dark Side will be complete.
We have China and Â鶹´«Ã½AV Korea buying up oil and oil sands assets, the steel sector already gone, manufacturing in the tank and a good chunk of our minerals in the hands of foreign companies. Research in Motion, our technological champion, is taking a beating from Apple and the Android, and is considered a takeover target.
Foreign investment is great, except for when it isn't.
At some point Canadians will realize a large number of us are going to mostly be working for someone else, and that someone else doesn't necessarily have our best interests in mind. They'll make a buck off us when they can, but as soon as there's a downturn, the plant gets shuttered.
Could this happen to Viterra? Not likely, at least not in a Stelco sense. Its geographically distributed network of terminals makes it hard to cut much more than what was already done when the industry converted from wood elevators to concrete terminals. But if the purchaser is Cargill, for instance, surely there will be consolidation.
And how will all this affect the farmers? They are no longer the quarter-section per family Wheat Pool members, but instead have thousands of acres and $300,000+ combines and tractors with which to operate. They can market their grain on their 3G-enabled iPad while in the seat of the aforementioned tractor that is steering itself.
These farmers are in better shape to deal with big, foreign grain companies than their ancestors. To them, it will likely make little difference in the long run.
- Brian Zinchuk is editor of Pipeline News. He can be reached at [email protected].
