Communities

Impacts

In some communities Agrium has a significant presence-employing a measurable percentage of the
population, creating business opportunities for local suppliers, and contributing to the tax base. Our retail
outlets are often located in small rural communities. We offer employment and other business opportunities
in areas where sometimes few choices exist. But we also use community infrastructure like roads, water
and protective services, and generate noise and waste that can have an impact.

As we engage with community leaders and residents, we identify what works well and opportunities for
improvement. When we follow responsible practices we can multiply our positive impacts and minimize the negative.

Issues

• Role in Rural Communities - In most instances our facilities are located in smaller rural communities. As one of the major employers in these communities we have a role to play beyond employing residents.
• Globalizing Community Contributions - With our rapid growth and global expansion, our charitable contributions and the types of projects we undertake must be adjusted to reflect a bigger and more global Agrium.

Involvement

Two of the traits we demonstrate are consistency and reliability. We plan on being part of our communities for the long term. It is this long-term thinking that we incorporate into our approach to community engagement and charitable community investments.

We engage with communities in a variety of ways to achieve mutual benefits. We continue to convene Community Advisory Panels (CAP) for our Redwater and Fort Saskatchewan, Alberta facilities because they are located in areas with extensive industrial activities and growing populations. CAP participants provide insight into what is going well or poorly in citizen interactions with Agrium and often identify solutions to local issues. We also collaborate with other businesses, community residents and governments on emergency preparedness committees.

We regularly conduct door-to-door visits with neighbors of our production facilities. We offer tours at many of our facilities to students, customers and other groups.

When we open, expand or close a facility we work to include community residents in this process through dialogue with community advisory groups, community meetings and open houses. We also work with local government officials and industry where appropriate.

Implementation

We focus our community relations efforts on community outreach and community investments.

Role in Rural Communities

At a time when many rural communities are shrinking because bright young people are moving to the city, we provide jobs for university graduates. As well, we source as much of our supplies as possible from local suppliers.

Beyond employment, we have a special role to play in rural communities. And it's more than writing cheques to support worthwhile causes. Our employees work to support a rural way of life by volunteering extensively in 4-H, farm safety programs, and in schools. We see ourselves as long-term community residents not as tenants.

Smaller towns and agricultural areas often do not have the resources to support extensive infrastructure. In many communities we participate in emergency planning and response beyond our own operations. For example, a team of firefighters from our Carseland, Alberta operations helped the local fire department fight an extensive grass fire in 2006. At some of our locations that require cooling ponds, we supply water to farmers for irrigation.

Globalizing Community Contributions

We think it is important to provide stability to community investment programs that dovetail well with our values and strategy. As we continue to grow across the value chain and geographically, we plan to expand our financial contribution and the international scope of many of our outreach programs.

• For almost a decade we have co-sponsored Caring for the Kenai, a high school competition aimed at protecting and understanding the Kenai River watershed in Alaska. This program's success encouraged us to expand the program to the Battle River area in Alberta in 2007. We are exploring opportunities to replicate our Caring for Our Watersheds program in other sensitive watersheds in China, South America, Canada and the United States.
• We continue to support programs that provide safety education to youth in rural communities. In the past two years we have increased our contribution level and expanded the number of farm safety day camps provided in North America through the Progressive Agriculture Foundation. The camps reach more than 70,000 people each year.
• The United Way remains a strong focus for our contributions to improve health and wellness. To grow a sense of community giving among Agrium employees, we matched employee donations, dollar for dollar. In 2007, the company contributed more than $400,000 to the United Way.
• During the past two years we worked with the National Arts Centre to expand the Music Ambassador program from Alberta and Saskatchewan into British Columbia. The program brings live classical music into hundreds of rural classrooms that are located in areas that may not have access to fine arts.

Our community projects are focused on investing in people, to build community and individual capacity, rather than building facilities. We believe that this approach creates greater value and has a more lasting impact.

For a description of many of our community and charitable collaborations, please see our website: www.agrium.com/in_the_community

Our Management Approach to Community Engagement

Major Community Risks and Opportunities	See Issues
Policy Commitments	Our Community Outreach Policy requires each major facility to develop a community outreach plan and to provide timely information to the community.
Operational Responsibility	Agrium's Senior Director, Corporate Relations, oversees all company-wide policies and programs related to community engagement. Our business units and production facilities independently customize policies and community outreach plans to fit local conditions and cultures. In 2007, our budget for community investments was split approximately 57 percent for corporate and 43 percent for site programs. Our corporate program supports national and regional initiatives and our site program focuses on local efforts. When we see an opportunity to affect numerous communities with a broader program, our corporate office gets involved.
Key Strategies and Procedures for Implementation	Community outreach plans include how we engage local residents through neighbor visits, open houses, emergency preparedness planning, and educational activities. The plans also engage local government officials and interest groups. We employ Community Advisory Panels for two of our production facilities. We encourage non-profit organizations to apply online for assistance. Criteria for community investments are posted on our website, and innovative software enables applicants to learn right away if their project meets our requirements. This software also enables external review of our community investments.
Major Changes to Systems or Structures to Improve Performance	An employee Volunteer in the Community program that began with Retail in 2004 will be taken company-wide in 2008. Employees contribute to a community project on company time.
Training and Awareness	Numerous employees throughout the company receive training on Grantstream, our donations tracking system. We publish regularly about Agrium's community involvement and contributions in our employee newsletter, Food for Thought.
Monitoring and Follow-up	Effectiveness of our community investments is reviewed with our Corporate Social Responsibility committee twice a year. Local community donations committees meet on a regular basis to discuss funding requests and assess effectiveness.
Goals and Performance	We plan to increase the absolute and relative amounts of funds donated to non-profit groups. See performance data below and in the performance summary section.
Key Successes and Shortcomings	We contributed to over 800 charitable organizations through our community investment programs.

Kenai Closure

In late 2007, we closed our Kenai Nitrogen Operations in Alaska due to a shortage of natural gas supply in Alaska's Cook Inlet. This facility added significant value to the Alaskan economy for the past 40 years. It has been a major nitrogen supplier to international markets in the Pacific region and was Alaska's third largest exporter in 2006, despite running at 50 percent of capacity. Closing the facility resulted in the layoff of approximately 150 employees. All Kenai employees were offered employment placement assistance and severance packages.

In conjunction with the Alaska government, Agrium investigated the feasibility of a gasification project to use coal as a feedstock, instead of scarce natural gas, and to capture the greenhouse gas emissions for use in enhanced oil recovery. Unfortunately, it was economically infeasible to implement coal gasification. We are currently decommissioning the facility in a safe and environmentally responsible manner.

For additional community stories, please see our website:
www.agrium.com/in_the_community

Indicators

Community Investment Amounts

We strive to maintain our goal of contributing one percent of our pre-tax profits over a five-year rolling average to non-profit groups. In 2008, our donation budget was increased to $2.7 million. This will effectively maintain our 2007 pre-tax contributions of 0.9 percent in 2008.

Community Investment Sectors

We support more than 800 local and global non-profit groups. Our 2007 donations were distributed to organizations committed to improving conditions in four focus areas.

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