The idea of mergers has always been one that sends shudders through whatever sector the businesses are involved in.
That is with at least some good reason.
Mergers by nature reduce competition.
If two elevator companies merge, it means there is one less option for farmers to sell to.
That is the same regardless of what sector the merger is in.
Part of the reason mergers take place is to eliminate at least some of the competition. It is why big fish eat little fish.
Mergers also mean a shuffling of the deck in terms of services and local jobs.
When companies come together they move to consolidate, and that almost always means cutting out redundancies in service. To do less would be folly, since it is through such actions that the efficiencies in providing products and services are realized, which in turn is how a better overall bottom line is attained.
That said, in the case of agriculture and of many other sectors, the savings are not generally passed on to the consumer (or farmer).
Mergers create better bottom lines for investors first and foremost.
So it's not a huge surprise that a report crossed the desk noting that Terry Boehm, chair of the Seed and Trade Committee of the National Farmers Union (NFU), and past president of that group, said the suggested merger of Agrium and Potash Corp could have adverse impacts on Canadian farmers.
In an email from the NFU itself, Boehm is quoted from an interview with CBC's Peter Armstrong, host of CBC News Network's On the Money, saying "Our experience with mergers, whether it be in herbicide manufacturers or seed companies, has always led to higher costs to the farmer as we have very little power to negotiate as individual farmers, or even as small collectives… with these behemoths that are being formed."
There is at least some rationale for the suggestion to negotiate for farmers.
But farm groups, even ones as 'small farm-oriented' as the NFU, must be careful in criticisms of mergers.
Few sectors have seen the steady, decades-long trend of growing farm operations.
The bigger fishes gobbling up the smaller ones began sometime in the period book-ended by the two great wars, and has been continuing unabated to this day.
The multi-thousand acre farms today are a far cry from the quarter section homesteads which brought farmers to the Canadian Prairies in the first place.
Farmers have merged, absorbed, bought out, and otherwise taken over their neighbours' farms for decades on end. They have done so in the name of creating efficiencies which are supposed to improve their bottom lines. Many producers equate bigger with better in terms of what they can achieve and in terms of making a return in investment and, in the process, a living for themselves.
It's a motivation not so far removed from the ideas behind a potash merger, only those owners are shareholders, and the scale of dollars is much larger.
Whether it's two potash companies becoming one, or one farmer absorbing another, the process is undertaken to generate efficiencies and better returns for the owners. That is really something central to the idea of business and farming is no more, and no less, than just another business sector.
