GFO makes headlines in regards to potash

grain farmers of ontario has been actively participating in the Potash Corp. story over the last few weeks.  Our interest is not directly related to who owns Potash Corp.; rather, we have been encouraged by BHP’s statements that, should its bid be successful, it would not participate in Canpotex, the potash export cartel.

At the March 2010 delegates meeting in London, two resolutions passed related to Canpotex Ltd., the company that currently handles all exports from Potash Corp., Mosaic, and Agrium, Saskatchewan’s three major potash producers. One resolution requested GFO monitor potash prices resulting from the cartel while another one directed our organization to “file a formal complaint to the Competition Bureau to investigate possible anti-competitive behavior by Agrium, Mosaic, Potash Corporation of Saskatchewan and their joint venture Canpotex.”

As a result of the national media coverage of a takeover fight for the $40 billion Potash Corp. that is drawing global interest, GFO has made some progress on these resolutions. On behalf of GFO, I was interviewed for a story about the cartel for the Globe and Mail where I made the case for why the cartel is not good for Canadian farmers. 

The reporter also interviewed the former Saskatchewan premier Allan Blakeney, the man who created Potash Corp. in the 1970s, who was quoted as saying he “isn’t sure the export body can survive in the long term.”

The article in the Globe and Mail led to an interview with CBC’s Rita Celli on her noon phone-in show, Ontario Today, on the same topic.

Grain Farmers of Ontario has also brought this issue to the attention of government through letters to the ministers of Agriculture, International Trade and Industry as well as other key MPs and staff.  Our position is that, although Canpotex has positioned their organization as an export cartel to comply with Canada’s competition laws, potash is a commodity demanded worldwide and the prices offered by the three potash companies domestically are aligned with the world prices offered by the cartel.  As a result, Grain Farmers of Ontario had been very encouraged by BHP’s indicated intention to remove this price distortion from the Canadian potash market by not participating in the cartel.

Unfortunately, due to the Canadian government’s demands conflicting with the company’s business strategy, BHP has withdrawn their hostile takeover bid for Potash Corp. of Saskatchewan.

GFO believes that the review of any future bids should take into account the broader impacts that it would have for Canadians outside Saskatchewan.  We are bringing this issue to the attention of Canadians and will continue to move our position forward over the coming months. •

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THE ONTARIO GRAIN FARMER magazine strives to be the number one source of information for our province’s grain farmers. With a balanced mix of production, marketing, technology, research, and general interest articles, we provide farmers with valuable information in an easy-to-read format. As the flagship publication of Grain Farmers of Ontario, the Ontario Grain Farmer is a magazine that is made by farmers, for farmers. The magazine is an important tool that supports the organization’s vision to drive the Ontario grain industry to become a global leader.