SASKATOON — Two brothers embroiled in an eight-year-long bitter legal battle over control of a generic crop input business have “buried the hatchet.”
Jim and Jason Mann have agreed to end litigation against one another and the businesses they run, which are Farmers of North America (FNA) and AgraCity Crop & Nutrition Ltd.
“The news of the day is the Mann vs. Mann is ending and Jim and I are burying the hatchet,” said Jason.
“It took a lot of negotiating and arm-wrestling between Jason and I,” said Jim.
The catalyst for ending the hostilities was the financial trouble at AgraCity, which supplies crop input products to FNA members.
The firm made headlines earlier this month when it sent a letter to its farmer customers advising them it is unable to deliver product farmers had ordered and paid for due to cash flow issues caused by a delayed refinancing process.
“What has happened here has put us both in the frame of mind that we have to compromise,” said Jim.
Jason said the brothers are now working together on a plan to get AgraCity back on its feet and farmers reimbursed for product they bought but did not receive.
“I can assure you that every farmer is going to be made whole,” he said.
“We have a massive portfolio of products that’s worth a lot of money. We’re restructuring to pull some equity out of that portfolio.”
Jason estimates that about 1,000 of AgraCity’s more than 2,000 farmer customers are owed product.
The companies have no bank loans or secured lenders. They operate on a cash basis, so it is a liquidity problem.
Jim said they are still “ironing out” the details of the financial restructuring plan and will share those once finalized.
Court documents reveal that Jim and Jason are listed as equal shareholders in AgraCity, although Jason has been responsible for the management of that firm.
Jim is the sole registered shareholder of FNA. Jason has no formal role in that company, although he claims to have an ownership stake in the firm.
The brothers claim that most FNA members and AgraCity customers want both firms to survive and thrive despite the recent difficulties because they want competition in the crop input business.
But there are also farmers who are owed thousands or hundreds of thousands of dollars of product who are irate with the brothers and their companies.
“They’re pretty upset about not getting their product. There’s no question about that,” said Jim.
“We’ve made a few errors or miscalculations, no question about it.”
FNA and AgraCity were pioneers in introducing generic crop protection products to Canada, initially through Health Canada’s Own Use Importation (OUI) program.
“That was the game changer,” said Jason.
They were able to use that obscure government program to drop glyphosate prices by $5 per litre at a time when farmers were using 40 million litres of the product per year.
“We changed the market,” said Jason.
They also used the program to import Aurora, a generic version of Horizon herbicide. Farmers who were paying $21 per acre for Horizon were able to get the generic for $11.
Jason said those generic products and others put a target on the backs of the Mann brothers and their companies. Multi-nationals were not happy with the competition. Many have either threatened or launched lawsuits against the companies.
The OUI imports also caught the attention of the Canada Revenue Agency because the brothers were initially selling product out of Barbados. The CRA initiated a lawsuit that dragged through the courts for 10 years.
“There was some stuff reported on how we were scoundrels and CRA was after us for some sort of tax scam,” said Jason.
“What wasn’t reported is we won that case.”
Jim said the OUI program rules dictated that farmers had to buy product from outside of Canada and they decided to sell out of Barbados due to the low tax rates in that country.
The issue still haunts them today.
“I see some stories on social media these days about (how) we’ve run off with farmers’ money to the Barbados,” said Jason.
“There’s just no truth to that. We reinvest every dollar into growing the (crop input) portfolio and other initiatives to drive competition.”
Those other initiatives include the proposed $2.3 billion Genesis Fertilizer project planned for Belle Plaine, Sask. The company is attempting to generate $449 million of farmer investment in that project.
Jason said the brothers have always been aligned on what they’re doing, which is creating more competition in Canadian agriculture and empowering farmers.
The dispute was about how they would accomplish that goal. But now they’re working together on devising a path forward for FNA and AgraCity.
In the meantime, both companies have temporarily laid off some of their staff while other employees continue to work through the restructuring process.
Jason acknowledged that the brothers are “wild and maverick and crazy” as well as “tenacious and stubborn,” but those are the same qualities that allowed them to introduce generic crop protection products into the Canadian marketplace.
They are also the qualities that had them butting heads in the courts for eight years.
While a formal legal settlement has yet to be finalized, the brothers have made up and that is going to make one 89-year-old lady ecstatic.
“Our mother doesn’t even know yet,” said Jason.
“Our mom is going to be so happy.”
About the author
Related Coverage
Firm hopes to fill generic input void
VIDEO: Biologicals company celebrates 'new beginning'
Myths, misinformation abound around regenerative ag
Vague definitions may weaken brand
