CALGARY — Agrium Inc. was defiant Monday as its largest shareholder, New York hedge fund Jana Partners LLC, demanded five new directors be added to the Canadian agriculture giant’s board.The company (TSX:AGU) dismissed Jana Partners LLC’s latest move as “almost certain to fail” and vowed to stick with its current strategy.The nominees Jana is proposing include the fund’s founder Barry Rosenstein and former Liberal agriculture minister Lyle Vanclief. Also on the slate are three men with the executive experience in retail and distribution that Jana says is lacking.“Agrium’s board has had every opportunity to respond constructively to our analysis and instead simply attempted to avoid the issues,” Rosenstein said in a statement announcing the board challenge.Among other things, Jana wants Agrium to spin off its retail business, which supplies farmers with fertilizers, seeds and other products, from the part of its business that produces fertilizer.In a statement, Agrium CEO Mike Wilson said the board’s independent directors spent two months evaluating Jana’s ideas with its independent financial adviser, Morgan Stanley, before unanimously deciding the retail spinoff was a bad idea.“The facts are straightforward. Agrium remains committed to its highly successful integrated strategy,” Wilson said.“Jana has been trying for over six months to obtain support for its idea that Agrium should spin off or sell its retail operations. Agrium’s shareholders have overwhelmingly rejected Jana’s ideas. As a result, we believe Jana’s attempt to run its own slate for Agrium’s board is almost certain to fail.”A source familiar with Jana’s thinking said the fund has not decided which of Agrium’s 11 board members it’s looking to replace, but it will probably “lean heavily” on the group Agrium has previously cited as having adequate distribution experience.Most of Jana’s nominees are American and it wants to make sure enough Canadians remain on the board, “so you can also assume that Americans will probably be more targeted heavily,” the source said.When it comes to replacing Wilson as CEO, the source said Jana hasn’t “gone there” and “that would obviously be a significant escalation.”In its more than decade-long history, all of Jana’s campaigns have been resolved with management before coming to a shareholder vote.“Maybe this will be the first,” the source said. “We’ll see.”Jana has said the retail spinoff, and a better focus on cost management and capital allocation, could add $50 to Agrium’s share price.Recently Agrium has bumped up its dividend and bought back $900 million in stock — moves Jana has applauded.Jana’s statement on Monday accused the current Agrium board of failing to address it’s criticism. It also accused Agrium of failing to keep shareholders informed — particularly about the weakness of its third-quarter financial results, which generally missed analyst expectations.Besides Vanclief and Rosenstein, Jana is proposing David Bullock — a former chief operating officer of United Agri Products, which was acquired by Agrium several years ago; Stephen Clark, a former CEO of Brenntag North America, and Mitchell Jacobson, chairman and a shareholder of MSC Industrial Direct Co. Inc. (NYSE:MSM).Agrium shares rose about two per cent to $99.95 in afternoon trading on the Toronto Stock Exchange.