Society

Impacts

Beyond the stakeholders already highlighted in this report, we also affect suppliers, research institutions,
governments and the general public. We can affect the regulatory direction in jurisdictions as large as
nations, and when we collaborate with peers we can affect the direction of an entire industry.
We can create value for the public when we get involved in educational and public safety initiatives.
Above all, we have an impact on all of society by providing nutrients that produce abundant and
nutritious food.

Although our stakeholders value the positive contribution of our products to food production, they also look to us to minimize negative environmental impacts and protect society from product safety and security risks.

Issues

• Nourishing Our Growing World - Many people cannot afford or obtain sufficient food to live. The ability to grow sufficient food is often affected by the availability of agronomic information and access to affordable crop nutrients, among other reasons.
• Transportation and Storage Safety - Our products can impact society when incidents occur in transport, storage and use.
• Criminal Misuse - The criminal misuse of fertilizer products for explosives and drug production is a threat that our industry is committed to defeating.
• Agricultural Knowledge - With large amounts of the world's population based in urban centres, society has less understanding of how their food is produced. This leads to many misconceptions.
• Global and Regional Environmental Impacts - The production, distribution and use of our products, like all human activity, has an impact on the environment. The impacts include energy and resource use, and the release of pollutants.

Involvement

We work with a wide variety of stakeholders to create stewardship programs that are science-based, effective and measurable. This is primarily accomplished through participation in industry associations and in multi-stakeholder groups.

Agrium constructively engages with governments to help develop solutions to emerging regulatory issues. At times, we are invited by governments to participate in roundtables and on other occasions we proactively initiate discussion with governments to provide ideas on how the industry can self-regulate and work with stakeholders to improve performance.

We work with non-governmental organizations (NGOs) through industry associations and multi-stakeholder groups (e.g., Crop Nutrient Council).

Implementation

With our stakeholders, we implement a number of industry-wide stewardship systems and codes of practice to address and manage issues impacting society.

Nourishing Our Growing World

By providing crop nutrients and other crop production inputs we are helping growers provide abundant and nutritious food. In the past two years we have increased our ability to support growers in North and South America through our retail growth. We have also expanded our ability to provide best management practices by introducing our controlled-release technology for broad acre crops (e.g., corn, wheat) and through the development of the 4R Nutrient Management System.

We support developing nations in their efforts to increase food production and improve environmental performance through the International Plant Nutrition Institute.

With our recent entry into the Chinese market we see an enormous opportunity to promote sustainable agricultural practices. By helping millions of Chinese growers apply at the right rate and time, using controlled-release technologies, we have the potential to make a significant positive impact on the environment and crop yields.

Agrium invests approximately $300,000 annually on in-field research to help develop best management practices to foster the use of the right nutrients, at the right rate, time and place to minimize environmental impacts.

Transportation and Storage Safety

In the past two years, we have worked with the Canadian Fertilizer Institute to develop an ammonia code of practice. This code provides industry-wide standards for ammonia handling and storage. Agrium has also worked with customers, carriers and industry associations to reduce the number of shipping incidents through improved infrastructure and practices. As a result of these efforts we have reduced our non-accident ammonia release rate by 55 percent since 2003.

Criminal Misuse

In 2005, Agrium announced that we would no longer manufacture ammonium nitrate for agricultural use in part due to the risk of criminal misuse for making crude explosives. In 2007, we began limiting the sale of third-party ammonium nitrate to blends or custom applied product to prevent misuse. Agrium has supported the development and implementation of industry-wide programs such as America's Security Begins With You and On Guard for Canada to reduce security threats. These programs were developed in collaboration with governments and law enforcement agencies. While we still manufacture explosive grade ammonium nitrate for industrial markets, all shipments of this product are tracked to reduce the risk of criminal misuse. Through The Fertilizer Institute and the Canadian Fertilizer Institute, we support federal legislation in the United States and Canada to track sales of ammonium nitrate.

Ammonia can be used to produce "crystal meth". Agrium supported the development of an awareness program by the Progressive Agriculture Foundation to inform rural children and their families of crystal meth and the adverse consequences of its use. We have also worked with our industry associations and law enforcement agencies to determine how we can reduce or prevent the use of ammonia for crystal meth production. To support this effort, Agrium has locking capability at all of our ammonia storage facilities.

Agricultural Knowledge

In the past two years we have increased our efforts to provide society with information about our industry to help create informed decision makers. A key means of achieving this objective is support for the Nutrients for Life Foundation in the United States. In 2006, the foundation developed the Nourishing the Planet in the 21st Century curriculum for middle and high school students. These materials were requested by more than 1,500 teachers in the United States in 2007. The foundation has sponsored an exhibit in the Smithsonian Institute's National Museum of Natural History to help educate visitors on the importance of soil to our world. In 2007, a Canadian Nutrients for Life Foundation was formed to educate Canadians.

Agrium has also participated in a global multi-stakeholder review of how agricultural education is provided in the Province of Alberta. In this review, global best practices and stakeholder needs were identified through interviews and literature reviews. As a result, a proposal was presented to the Alberta Government to establish a sustainable model called Agriculture for Life, by working together with community groups and industry to develop agricultural safety and education programs.

For a full description of the Agriculture for Life model, please see our website: www.agrium.com/in_the_community

Global and Regional Environmental Impacts

Agrium's efforts to manage climate change and nutrients in the environment are outlined in the Environment section of this report.

Illustration

The International Plant Nutrition Institute (IPNI) employs more than 20 scientists globally to work with growers and researchers to increase crop production and environmental performance through the use of fertilizer best management practices. IPNI's efforts are currently focused on programs in North America, South America, Russia and Asia. Agrium is a significant supporter through financial contributions, management participation and membership on IPNI's Board.

The IPNI staff in Asia has continued in their efforts in 2007 to bring the technology of balanced fertilizer use to growers. Balancing the use of macro, secondary and micronutrients continues to be IPNI's major focus. The challenges are many, but the opportunities are also abundant for those with the scientific knowledge to deliver this message to growers, their advisors, scientists and public policy makers.

India

India is reported to be the third largest consumer of fertilizers in the world. The IPNI program there advances the concept of improving the balance in nutrients for crop production, emphasizing soil testing-to ensure site specific nutrient management.

The Indian program is actively involved in delivering on-farm research and extension activities. Working with industry partners in 2007 they delivered 179 field trials, 26 dealer training programs, 26 farmer seminars and 19 meetings to train industry groups on balanced fertilization. 2007 also marked the publication of the first issue of Better Crops India. The publication was circulated to government and industry officials throughout the country.

China

The National Research Network on Soils and Fertilizers in China was formed in 2007. The Network was developed on the basis of current IPNI cooperative linkages in 31 provinces across China. Working with 45 research institutions and universities, the Network is an effective means of delivering government supported projects in all regions of China. In 2007, with support from IPNI member companies, including Agrium, the China program and their cooperating institutions carried out a total of 236 field trials and 281 field demonstrations, held a total of 106 farmer training meetings, 106 field inspections for local leaders, and 39 harvest field days across the country.

Information sharing has positively impacted farm practices and the way government officials view the industry.

Our Management Approach to Societal Issues

Major Society Risks & Opportunities	See Issues
Policy Commitments	Because Society encompasses numerous issues, we have numerous related policies: Code of Business Conduct and Ethics; Anti-fraud and anti-corruption; Political donations; and Environment, Health and Safety. Although we do not have specific policies directed at local hiring and procurement, we do follow procedures that focus on local capabilities first and then supplement this with talent elsewhere.
Operational Responsibility	The most senior positions responsible for: Public policy issues - Senior Director, Corporate Relations; and Legal issues - Senior Vice President, General Counsel. Business unit presidents are responsible for the implementation of policies and practices.
Key Strategies and Procedures for Implementation	Agrium actively participates in discussions and initiatives with governments and industry associations to improve our impacts on society. We continue to educate society on the benefits of agriculture and the proper use of fertilizers. We develop curriculum materials independently and in conjunction with industry associations to get agriculture information into North American classrooms. We provide new technologies, such as seed varieties that require less pesticide, and controlled-release fertilizers that maximize yields, minimize environmental impacts, and can be used in developing nations.
Major Changes to Systems or Structures to Improve Performance	We have discontinued the manufacturing of agricultural grade ammonium nitrate in part due to the risk of criminal misuse for making crude explosives. Agrium adopted an Anti-fraud Policy in 2007. In 2007, we identified company-wide policies to ensure fair international dealings. Agrium created a strategic business unit (Advanced Technologies) focused on controlled-release and other specialty products.
Training and Awareness	Anti-corruption and compliance training is delivered to management. We share our public policy positions internally through our employee newsletter Food for Thought and on our Intranet.
Monitoring and Follow-Up	During our Redwater, Alberta environmental permit renewal process and our Egyptian permitting process we conducted extensive social impact assessments. Currently, we review the EH&S performance of our suppliers, but not their human rights performance.
Goals and Performance	Our goal is to help shape informed governmental policy decisions that meet society's objectives while maintaining business viability. See performance data below and in our Performance Summary section.
Key Successes and Shortcomings	We have expanded our agriculture education program through our involvement in the Nutrients for Life Foundation. We help growers to further increase food production through our expanded use of best management practices and controlled-release technologies such as ESN. We continue to experience misconceptions in society of the role of nutrients in sustainable food production.

Indicators

Assistance from Governments

Governments have supported Agrium in pursuit of generating major societal benefits. The Alaska and United States federal governments granted a total of $7 million to support the evaluation work for our Kenai Coal Gasification project. The Government of Alberta has contributed C$3 million for further development of ESN.

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