What do public pension funds have to do with Canadian agriculture? The answer to that question begins with the Prairie Wheat Pools formed back in the 1920s.
I learned early the pride that many Western Canadian farmers held for the Prairie Wheat Pools. Committed farmers created these member-owned grain-handling cooperatives in the hopes of having improved prices for their crops, a better life for their families, a future for up and coming young farmers, and a sustainable economy for rural communities.
The formation of those cooperatives took a lot of planning, organizing, and sheer persistence. It was based on agrarian activism and a movement of small farmers defending each other and working together.
In the early 1920s Prairie farmers formed wheat pools in Manitoba, Saskatchewan and Alberta, in an effort to break the power of the large, for-profit grain merchants. Large corporations controlled the marketing and transportation of grain, and left farmers exploited with no say in determining the price of their crops.
Once formed, the pools were successful grain marketers and operators of grain elevators. But, when the 1930s hit, times were hard. The grain marketing end of the business was hived off to the newly formed Canadian Wheat Board, which was farmer controlled as well. The wheat pools concentrated on maintaining their network of grain elevators.
These prairie cooperatives have not existed since 2007 when they were privatized. I have written in great detail about farmers’ loss of control of the Canadian Wheat Board. Here is one perspective on the loss of the Prairie Wheat Pools, as these cooperatives struggled with fewer family farmers, rail line abandonment across the Prairies and more.
Connecting pensions and agriculture
As I was researching the links between land concentration, pension funds, and long-term care homes for my February column, I came across a media release proudly touting the rebranding of a corporation with the ‘new’ name of Viterra.
Viterra rang a bell. So I started refreshing my memory — Viterra was the name selected in 2007 when the Prairie cooperatives were restructured. The Prairie Wheat Pools were privatized and merged into a corporation called Viterra.
Glencore Agri –the agricultural unit of mining, metals and energy transnational Glencore — had purchased a company called Viterra in 2012 for $6.1 billion.
The rebranding of Glencore Agri to Viterra in January 2021 was heralded in a news release as strengthening the future of its operations in 37 countries as “a fully integrated agriculture network connecting producers and consumers to supply sustainable, traceable and quality-controlled agricultural products.”
It’s so easy to forget recent history — even events that happened less than 15 years ago amid attempts to rebrand and rebrand again.
As I dug further into the rebranding of Glencore Agri, I came up with yet another link to Canadian pension funds and our hard-earned pension savings.
A brief look at Glencore Agri shows that pension plans are still hot in agri-investments here in Canada and around the world. In 2016 the Canada Pension Plan Investment Fund (CPPIF) purchased 40 per cent of Glencore Agricultural Products for US$2.5 billion.
The release stated:
“Glencore Agri is a globally integrated grain and oilseed business — primarily focused on grains, oilseeds products, rice, sugar, pulses and cotton — with activities including origination, processing, storage, logistics and marketing.”
The CPPIF — the managers of the public pension funds of all Canadians — holds 40 per cent of the shares of Glencore Agri – now called Viterra. The BC Pension Investment Fund owns another 10 per cent.
Canadian public pension funds purchased 50 per cent of a transnational corporation that owns what were once the farmer-owned Prairie Wheat Pools. And this 50 per cent ownership is in shares of Glencore Agri, which previously acquired Viterra, and has now rebranded as Viterra. Talk about rebranding.
Glencore Agri/Viterra — or the privatized wheat pools if you like — has become the same type of multinational that family farmers who formed the wheat pools railed against — and tried to defend themselves against — by forming cooperatives.
Viterra is an agricultural commodity trading company owned by Glencore that sources, handles, markets, and processes a variety of commodities, including corn, cotton, soy, and grains. The company holds over 270 storage and handling facilities, 35 processing and refining facilities, and 23 port terminals worldwide. It is active in agricultural commodity markets in Australia, Canada, Russia, Argentina and Brazil.
Our pension money and the fund investment managers were not involved in the privatization of the wheat pools. But it is clear that CPPIF is hoping to grow our pensions with the profits of Viterra.
A history of land speculation
Buying shares into large agricultural corporations is likely easier and less controversial than trying to buy huge chunks of farmland in Saskatchewan, which the CPPIF tried to do less than a decade ago.
In 2013, the CPPIF was involved in a controversial purchase of 115,000 acres of prime agriculture land in southern Saskatchewan. That move was so visibly contested that even a very conservative government took action through farmland acquisition laws to prevent any such purchases by pension funds seeking to speculate on farmland.
The next attempt to acquire more than 65,000 acres in 2014 — this time by another unnamed pension fund — was halted by the Saskatchewan Farm Land Security Board when it ruled that pension funds were not allowed to own land in the province.
To be clear, pension funds from around the world are still speculating on land or food resources.
Canada’s pension fund has not ceased speculating on “diversified holdings” but it appears to have retreated from the direct purchase of farmland. The reality is that it has found a less controversial path toward acquiring agricultural power through its investments.
Meanwhile, the CPPIF website also notes investments in cleaner technologies, and climate change, electric powering stations for vehicles, etc. But it is risking its reputation when companies like Glencore Agri are involved, for example, in issues of deforestation in Brazil.
If money is the only gauge, Canada’s pension fund’s’s strategy is working. The fund has grown in leaps and bounds in recent years. It started out with a transfer of $12.1 million from the federally controlled Canada pension plan in 2001, by September 30, 2013, the CPP Fund totalled $192.8 billion. Today the Canadian Pension Plan Investment Fund is worth more than $500 billion and projected to surpass $1 trillion by 2032.
And so that is how the world turns — the Prairie Wheat Pools are privatized and called Viterra. This company is bought by Glencore Agri, which sells 40 per cent of its shares to the Canada pension fund and another 10 per cent of shares to the BC pension fund. And Glencore Agri is born again as Viterra.This timeline helps understand the trajectory.
Have we forgotten the roots of Viterra? Will this rebranding help us to forget or to remember? Will we want to know more about pension funds and how they are used here and around the world?
Background information about the parent company Glencore and its coloured history — in mining, resource extraction and more — puts a whole new meaning into following the money.
(This article was first published in March of 2021 on Rabble.ca)