Fertilizer costs have always been a major concern for farmers in the area, and a company has been working towards trying to help lower those prices. The FNA Fertilizer Limited Partnership has been holding meetings throughout Western Canada - including one in Yorkton - to get farmers investing in a farmer-owned nitrogen plant, which would be built in Western Canada. They held a meeting in the city recently to get farmer input into the concept.
Spokesman Bob Friesen says that the project has been in the works for twenty-two months and has so far involved a lot of research to see what kind of business case can be made for such a plant. He says the conclusion has been that there's a very strong case for a farmer-owned fertilizer plant in western Canada to produce nitrogen fertilizer.
While the business case is sound, Friesen says that it is still a very ambitious project, so they need to reach out to farmers and get their support to go ahead.
"This project is so much bigger than FNA has ever done, and we could only take so much out of our membership revenue, we decided to do a seed capital drive. It's meant to do two things, it's meant to get farmers to step up to the plate and support the project, to see how many farmers will do that, and secondly it's also meant to raise funds to continue project development," Friesen says.
The drive began in mid-October, which Friesen admits might have been early, he says that it has been embraced by the farmers he has talked to through the meetings. He says that farmers in Canada want a permanent solution to increasing input costs.
"I believe farmers are also frustrated that fertilizer companies are increasing prices just because they can. Fertilizer prices are no longer tracking the cost of producing nitrogen fertilizer, they're now tracking the prices of grains and oilseeds or the price of corn. Farmers have now decided that they are going to build a fertilizer plant because they can," Friesen says.
He also says that another incentive to build the plant is a desire for value-added processes for farm production, something Friesen says doesn't benefit farmers unless they own the process.
"That's what this project is really about. It's not about destroying the market price of fertilizer, it's about ensuring that the farmer-investors get a lower price for their fertilizer than what they're paying retail, but secondly on top of that they're also getting a good healthy return on their investment," Friesen says.
The plant will be located in western Canada, though Friesen says that no final decisions have been made beyond that.
Sixty per cent of the seed capital investment will be guaranteed by FNA, which Friesen says is a rare case for capital projects like this, as it is very rare there is a guarantee. He says that they chose to guarantee that 60 per cent is to show their confidence in the project. He also notes that early investors will be receiving some sort of preferential treatment, which will be decided later. He says the project itself could be worth a billion dollars, with investment from farmers as well as other sources.
People interested in the project are encouraged to visit projectn.ca.
