Canada has approved Bunge’s $34-billion merger with Viterra, a move that critics say will consolidate corporate control over the country’s grain-handling sector and squeeze farmers already struggling with tight margins.
With farm profitability at a historic low point, the price suppression expected from this mega-merger—calculated at C$770 million per year in lost income for grain producers—could push farmers to scale back climate resilience and emissions reduction efforts, representatives warn.
Transport Canada, which oversees grain transportation infrastructure, greenlit the merger despite warnings of “substantial anti-competitive effects” from Canada’s competition watchdog—and widespread opposition from farmers. The department said denying the merger would create “significant negative effects on Canada’s reputation for regulatory predictability and for openness to foreign investment.”
“Foreign investment is important to Canada’s economic success as it can enhance economic growth, support new technologies, create good jobs for Canadians, and provide Canadian farms with access to global supply chains,” a Transport Canada spokesperson wrote in an email to The Energy Mix, emphasizing that the approval comes with “extensive terms and conditions” to protect public interests and mitigate potential impacts on competition.
But multinationals like Cargill and Chinese-owned COFCO are already crowding out competitors in Canada’s farm sector. These big companies cost-effectively achieve high productivity, but without strong regulation, their efficiencies can come at the cost of public accountability.
Mergers like Bunge’s let large agribusinesses dominate the food sector, diminishing government influence, Cathy Holtslander, director of research and policy at Canada’s National Farmers Union (NFU), told The Mix. The companies are privately-held with fewer obligations for transparency, their “first responsibility” being to shareholders.
Growing corporate control of markets, supply chains—and in effect, food policy—is a big shift from when the government-run Canadian Wheat Board represented farmers, Holtslander said.
Background of the Merger
The Bunge-Viterra merger first floated in 2023 was approved by major markets like the U.S. and European Union, which also have competition laws at stake in the deal. With Canada’s recent nod, China remains the final holdout.
But from the start, the deal raised red flags in Canada. The Commissioner of Competition warned in a report of suppressed competition and public interest issues with consolidating Canada’s transportation sector. “This consolidation could potentially lead to lower sale prices for farmers because the availability of transportation services is a factor that contributes to the price they receive for their grain and oilseeds.”
Merging the companies will give farmers fewer options for selling their produce, which they transport and sell to grain handling facilities run by the likes of Viterra. Grain is taken to primary elevators, canola often goes to processing elevators like oilseed crushing facilities, and unprocessed crops are shipped for international sale through terminal elevators.
A competitive market depends on these facilities being owned by different companies that vie for products by offering high prices. If the elevators are owned by only a few companies, there is less pressure to buy at higher prices because farmers have fewer alternatives. Distribution of ownership is important, too: farmers need to pay more to deliver their product to an elevator located farther away, which matters less when there are multiple buyers.
On merging with Viterra, Bunge would have control of 40% of Canada’s canola crushing capacity, gaining influence throughout all levels of the grain supply chain, from purchasing to processing to exporting. The deal would bring together “the company with the most oilseed crushing facilities and the company with the most primary grain elevators in Western Canada,” wrote the Commissioner.
“To be clear, this will [also] affect farmers that aren’t selling directly to Bunge, because it’ll suppress prices across the market,” said Holtslander.
All the facilities operated by Bunge and Viterra would be under one corporate roof, plus Bunge holds a 25% share of a third company, G3, putting those facilities under the behemoth’s sway, too. The Commissioner wrote that Bunge has veto rights over major G3 decisions, and so has “material ability to influence G3’s economic behaviour.” Bunge also has nominated directors on G3’s board who have access to confidential information.
Bunge and Viterra said in a statement that these concerns are “localized” to select areas in Saskatchewan, Manitoba, and Eastern Canada. The worries are “misplaced,” they added, including those about Bunge’s stake in G3.
Impacts on Farm Sector, Climate Action
Researchers say the merger would undermine what little leverage farmers have for securing a decent price for their product. The impact would be substantial—a report by the University of Saskatchewan projects [pdf] that the merger “reduces grain producer income by approximately $770 million per year.”
That loss could land hard with farmers already operating on thin margins. In recent years, per-acre margin peaks “are below the inflation-adjusted troughs of the 1940s, ’50s, ’60s, ’70s, and early ’80s,” says Darrin Qualman, NFU director of climate crisis policy and action.
Meanwhile, farmers are already struggling with lower yields due to the worsening impacts of climate change. The federal government is also pushing for farmers to adopt new practices to lower emissions and build resilience. These will pay off in the long term, but come with high upfront costs without supportive funding. Some ongoing programs aim to provide some support, like the federal On Farm Climate Action Fund—a $704-million program that has been vastly over-subscribed.
Against that backdrop, the merger will weaken the resources farmers have to undertake new practices.
“When you push down prices, that means farmers have less income to work with when they’re making their decisions about what they’re going to do on their farm,” said Holtslander.
With a projected drop in the prices they can expect, grain farmers will need to consider how to save money on production costs, and taking on a new practice that costs more money is unlikely to balance that calculation.
“If you want to make the same income, you have to have the same revenue—you need to produce more tonnes on the same piece of land,” added Holtslander. One way to do that is to increase the amount of fertilizer used, which increases emissions.
Farmers may also try to make ends meet by growing food on under-utilized areas of land—like forestland, wetlands, and other wildlife habitat—”and those land use changes also release carbon from the stored carbon from the soils, and then turn that land into a source of emissions instead of a sink.”
As one of the conditions for the merger that will cost farmers hundreds of millions of dollars per year, the Bunge-Viterra company will need to put $5 million towards helping farmers adopt regenerative practices.
Transport Canada’s Terms And Conditions
The merger’s approval was granted with conditions that place “strict controls” on Bunge’s representation on the G3 board and require the company to divest several grain elevators, implement price controls on canola and maintain current processing capacity, keep Viterra’s head office open, and “invest at least $520 million over the next five years in grain handling infrastructure, regenerative agriculture programs, and community support initiatives in Canada.”
Bunge also needs to “appoint and remunerate an independent monitor” to oversee their compliance with the terms.
But the commissioner’s report said such conditions won’t fully address the competition concerns with the deal, cautioning that measures like the controls on Bunge’s stake in G3 are unlikely to be effective. Measures like divesting grain elevators will only reduce competition in some locations, the report added.
Transport Canada said the “strict measures” on Bunge’s G3 stake—which do not require divestment from G3—“will ensure that the companies are operated independently and cannot coordinate pricing decisions.” The Competition Bureau, however, had indicated that even without “material influence”, Bunge’s competitive incentives may still be affected through “a reduced incentive to compete with the business in which it holds an interest.”
