聽 聽 聽 聽 聽 聽 Bigger, at least in terms of business, is generally seen as better.
聽聽聽聽聽聽聽聽聽聽聽 That certainly extends to farming where neighbours have bought out and absorbed neighbours for decades dating back essentially to the end of the First World War, at least here in Canada.
聽聽聽聽聽聽聽聽聽聽聽 Of course farm consolidation is not unique to Canada. It is a rather general trend in terms of dryland farming areas around the world.
聽聽聽聽聽聽聽聽聽聽聽 The idea of growth for farmers is all about creating economies of scale and buying more fertilizer or agricultural protection products in order to reduce costs. You are able to spread the costs of the overall farm operation over more acres and that should allow better gross returns.
聽聽聽聽聽聽聽聽聽聽聽 But on the flipside, there are concerns that corporate growth through mergers may not be a great thing for farmers because the concept of competition holding prices in line is reduced.
聽聽聽聽聽聽聽聽聽聽聽 Not that farmers have much say in things.
聽聽聽聽聽聽聽聽聽聽聽 Go back to the days I was in high school and farm machinery dealerships were still selling products from Allis Chalmers, Co-op Implements, White, Cockshutt and a handful of other companies that have long fallen by the wayside. Farmers can of course still purchase farm equipment but whether prices are controlled by competition better today than a few decades ago is a question for economists.
聽聽聽聽聽聽聽聽聽聽聽 It is a question that is very current for producers today, since a number of major mergers have taken place in the past couple of years which will effect competition in areas which directly impact farming.
聽聽聽聽聽聽聽聽聽聽聽 Dow Chemical and Dupont officially announced a $130-billion merger to form ag-chem giant DowDuPont. A few months later ChemChina made a $43-billion move for Swiss agriculture chemicals and seed giant Syngenta AG.
聽聽聽聽聽聽聽聽聽聽聽 Then in September 2016 Germany鈥檚 Bayer swooped in for Monsanto in a $66-billion takeover during the same week as Potash Corp of Saskatchewan鈥檚 merger with Agrium to create the largest fertilizer giant in the world valued at $36 billion.
聽聽聽聽聽聽聽聽聽聽聽 Business suggests competition remains and the number of companies is not the key to keeping prices in line.
聽聽聽聽聽聽聽聽聽聽聽 That has some definite truth to it, since we still have a number of Canadian banks, but their products, services and fees are largely clones of one another.
聽聽聽聽聽聽聽聽聽聽聽 And gas station prices at the pumps move in virtual lockstep regardless of the company sign in front.
聽聽聽聽聽聽聽聽聽聽聽 It comes down to balance. Competition can exist with limited competitors and be a mirage with many in the field.
聽聽聽聽聽聽聽聽聽聽聽 Although ultimately the larger business gets, farm or otherwise, the closer to dominating control we may get.聽
