Business & Policy
Farmers show impressive support for fertilizer plant
Dec. 18, 2012, Saskatoon, SK - Early indications in the ProjectN seed capital drive are that farmers are overwhelmingly committed to the idea of farmer-owned fertilizer manufacturing. Farm leaders are speaking up about the opportunity for farmers to gain a return on investment to offset the high cost of fertilizer through participation as an owner.
"Farmers are clearly ready to invest and engage up the value chain," said FNA Fertilizer Limited Partnership ("FNA FLP") spokesperson and farm leader Bob Friesen.
The enthusiasm for the project is impressive. In six weeks over 5,000 seed capital units of FNA FLP have been sold to farmers wanting to participate. Farmers have attended over 60 public town hall meetings in British Columbia, Alberta, Saskatchewan, Manitoba, Ontario and Québec, speaking directly with FNA FLP representatives, and visiting the www.ProjectN.ca website. "It's important that interested farmers that have not yet committed to making an investment review the opportunity soon, because we are fast moving to a point where there may no longer be room for additional participants to get involved," added Friesen.
"The reasons farmers have given for this staunch support are that they're looking for a more permanent solution in reducing fertilizer costs — they recognize that to truly accrue benefits from the value chain they need to participate in ownership — and because they see fertilizer prices tracking corn prices rather than being based on cost of production." stated Friesen.
Farm leader and Canadian Federation of Agriculture President, Ron Bonnett, believes that farmers can benefit from engaging up the value chain. "The chance for farmers to participate as an owner in the manufacturing of one of their primary input costs makes a lot of sense," said Bonnett. "This kind of a project helps farmers get a piece of a very profitable industry - you've got to look out for yourself as a producer. We've heard for years that farmers should participate more in the value chain, and I believe it's a great strategy, given the increasing importance for farmers to be more competitive," continued Bonnett.
Other farm leaders see this as a rare opportunity. Agricultural Producers Association of Saskatchewan President, Norm Hall, is one of those. "It's great to see someone provide the leadership by facilitating a farmer owned fertilizer manufacturing project. It's not every day that a large number of farmers have the chance to become owners in the manufacturing of something they use on their farm like seed, fertilizer, chemical or equipment", said Hall. "We'll be supplying ourselves, so we don't have to worry about something happening to the market for the product."
Friesen stressed the importance of getting as many farmers to purchase seed capital units as possible. "The more farmers that participate, the better. We want to maximize farmer involvement so as many farmers as possible can benefit."
He also noted the importance of understanding that the strategy for the project is not to destroy the retail price of fertilizer or to compete at the retail level. "This is about supply security, bringing the price of fertilizer closer to wholesale prices at the farm gate for farmer investors, and about trying to give farmers a return on investment. Why not get fair pricing and an investment return at the end of the year through ownership from producing something you're using anyway?"
"Many farmers are now seeing input costs as being a greater obstacle to profitability than market prices, and it's nice to see farmers join forces to change the industry environment from a situation where fertilizer companies increase the price 'because they can' to farmers owning fertilizer manufacturing 'because they can,'" said Friesen.
Friesen encouraged farmers to find out more and get involved by contacting the FNA office, visiting www.ProjectN.ca or attending or seeking out one of the FNA FLP public town hall meetings. "We've held a lot of town hall meetings already, but if there's a group of farmers that would like a presentation, we'll be there," said Friesen.
In conjunction with organizing initial farmer investment and participation, work is currently being done on financing, strategic partnering and other key project components, moving FNA FLP into a suitable position for a substantive farmer equity phase to begin in the coming months.
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