National | Letters

Request for investigation of fertilizer pricing in Canada

On January 12, the NFU sent the following letter asking the Chair of the House of Commons Standing Committee on Agriculture and Agri-Food to launch an investigation into fertilizer prices.

Dear Mr. Blois,

RE: Request for investigation of fertilizer pricing in Canada

The National Farmers Union (NFU) is concerned about possible profiteering by fertilizer companies. Depending on the type of fertilizer, the North American fertilizer market has become dominated by two to four companies — combinations of Nutrien, Yara, CF Industries, and Mosaic — giving these companies tremendous market power. This market power means their businesses are unrestrained by competitive forces. For instance, Nutrien predicts its profits will double between 2020 and 2021, from $3.7 Billion to $7.1 Billion EBITDA (Earnings before interest, taxes, depreciation and amortization).

Over this past year there has been an ongoing discussion about increased costs due to supply chain problems, COVID related problems, increasing energy costs, etc. When farmers experience these problems our net income goes down, yet we see fertilizer companies’ incomes skyrocketing. We believe the best explanation for company profit increases is that their incredible market power allows them to charge whatever the market will bear, and that the price increases farmers face have little relationship to costs of fertilizer production and distribution.

One of the most important roles of government is to maintain some level of fairness. In agriculture this is jeopardized by the absence of any competitive forces acting on the fertilizer companies. All of the Business Risk Management Programs under the Canadian Agriculture Partnership rely on a substantial level of taxpayer support, which Canadians generally agree to do in order to maintain a viable farming sector. Anticompetitive corporate behaviour and gouging will drive many farmers out of business, but equally important, exorbitant fertilizer prices will cause Business Risk Management programs to function to flow hundreds of millions of taxpayer dollars to the corporations engaged in the profiteering. Rather than restraining anti-competitive behaviour, government programs may be enabling or even funding it.

Therefore, the National Farmers Union is calling on the Standing Committee on Agriculture and Agri-food to investigate all of the factors that contribute to fertilizer pricing in Canada post haste.

Yours truly,

SIGNED

Katie Ward, NFU President

CC: Benoit Jolicoeur, Clerk of the Committee

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