User-friendly spray rebates
By TOM BUTTON
The cheque is in the mail, maybe for the last time. It now looks as though Ontario's foray into rebate pricing for pesticides is going to be scaled back for 1999.That will bring an end to the rigmarole of figuring out which programs offer the best rebates. For the most part, growers won't be told to buy a company's corn herbicide in order to get a cut in the price of its soybean products.
Gone too will be the long delays waiting for rebate cheques. "Our goal is simple, up-front pricing," says Brent Schmidt, Cyanamid product manager. Cyanamid's Pursuit was in the thick of the rebate tango last year with Basagran, sold by BASF. Depending on how much Basagran they bought, Pursuit sprayers could get rebates of up $9.30.
Sprayers first filed their sales receipts and then had to wait, and wait, for the cheque. "We've had over 10,000 claims to process," Schmidt says to explain the delay. "We should have them all in the mail by the end of November - that's what we promised last spring."
Actually, the promise was made mostly to dealers. It seems few growers were told how long they'd wait. "We keep getting complaints," says Susan Iler, research manager for the Ontario soybean board. "The payments haven't been anywhere near as fast as expected."
Board director Dave McClary, who heads the research committee, fired off a letter last April to the Crop Protection Institute, the group representing pesticide makers. Farmers, McClary said, want companies to "abandon their sales gimmicks and flashy advertising in favour of hassle-free, fair-price, up-front transactions."
McClary said it's a waste of time for growers to sort through all the rebate and coupon programs to find the cheapest herbicides. He added growers end up paying more because of staff hired to process rebate cheques.
It looks as if the message has got through. "We're going back to rebates the way they should be used," says Bob McAuley, communications manager for BASF. "We're going to be talking $1 or maybe $2 per acre." The focus will be on "rewarding customer loyalty," he says.
But as usual, companies won't publish their prices until mid-winter. Until then, they're reluctant to promise they'll hold their rebate programs in check, saying they may need to up the ante if competitors play hard ball.
"I don't think that's going to happen," McAuley says. "There's going to be a lot more focus on list prices."
When rebates are offered, growers can expect faster payouts.
Companies are
studying how DowElanco last year arranged for dealers to deduct
the rebates
from farm invoices, so the dealer waited for the cheque, not the
grower.
back
Heavy-duty handouts
U.S. cash crop farmers are receiving $130 per acre from the U.S.
government, double what Ontario farmers receive from NISA and
market
revenue
BY TOM BUTTON
Subsidies, trade wars, tariffs - all the words that dominated global agriculture through the '80s and early '90s are suddenly back with a vengeance. The U.S. and Europe especially are loading their heavy artillery, while countries such as Canada have cut back on defence spending.Grain and oilseed growers who thought the Uruguay round of GATT talks put an end to unfair grain trade are in for a rude awakening, warns Paul Martin, acting director of multilateral trade for the federal agriculture department.
The U.S. and EU didn't unload their big guns. They simply didn't have to fire them through the 1995 to 1997 crop years because world supplies were so tight there were enough high-priced grain and oilseed markets for everyone.
With today's world granaries full to bursting, the superpowers have even more ammo to ensure they can make sales wherever and whenever they want. Under current World Trade Organization (WTO) rules, for instance, the U.S. was allowed to use its Export Enhancement Program (EEP) to subsidize $1.1 billion in farm exports. Because of healthy markets, Washington spent only $120 million.
The Clinton administration and Congress now agree that the U.S. should be able to add the unused US$980 million to the US$500 million that's permitted this year. In addition, Washington has an additional US$1.5 billion available for export credit guarantees.
"Certainly, we're not in a position to use export subsidies to play that game," Martin says.
In fact, Canada has dismantled much of its export subsidy and credit programs, and has capped spending on farm stabilization at $660 million.
Meanwhile, the U.S. has stepped up its internal subsidies, says Brian Doidge, economist for the Ontario Corn Producers Association. Under the 1995 version of its farm bill, Washington was supposed to cut its farm subsidies to essentially zero by the year 2002.
Instead, under the last-minute budget cobbled together just before the November congressional elections, Washington found an extra US$6 billion for agriculture spending, including US$3 billion in direct cheques called market loss payments.
Doidge calculates the changes mean a typical 500-acre American cash cropper can qualify for an average C$65,000 in federal payouts in 1998. That's $130.42 per acre, and more than twice the support that Ontario farmers can expect from NISA and market revenue insurance. See U.S. Crop Subsidies.
The combination of internal and export supports are a double whammy, Doidge says. Internal supports let American farmers produce big crops while other farmers around the world are pinched by falling Chicago prices. Those big American crops in turn put more pressure on Chicago, so the low prices last even longer.
The U.S. uses export subsidies on commodities such as wheat and soy meal to ensure it can undercut any countries that continue to grow exportable crops.
While support dollars are being thrown around like birdseed, countries around the world are preparing their negotiating positions for the next round of WTO talks, scheduled to begin in late 1999 and conclude within two to three years. As in the Uruguay Round, agriculture is expected to be front and centre.
"There's a perception that the Uruguay Round solved all the problems with world agricultural trade," says George McCaw, OMAFRA policy analyst. "One of the first things we have to do is correct that idea....GATT left the U.S. and EU lots of leeway to continue their subsidies."
Ontario farm groups are starting to stake out their lobbying positions and tell Ottawa what its negotiators should demand, Doidge says. But they're also trying to ensure Canada's farmers get better defences in order to survive until a new WTO agreement takes effect, he adds.
"Safety nets are going to be critical," Doidge says. "They're
going to be
crucial for the survival of a lot of our farms."
back
By TOM BUTTON
If their marketing board won't give wheat growers a chance to sell their own crops, maybe the millers will. Hayhoe Mills says it may buy directly from farmers next summer."We're in the process of looking at posting our own wheat price for 1999 for new crop," says Ed Michaels, wheat buyer for the Woodbridge-based mill. Michaels refuses to explain how growers could sell to the mill when it's illegal under Ontario's single-desk sales system. "You're trying to probe me and get more facts....That's all I'm going to tell you."
Hayhoe already offers a $5 per tonne premium to growers who ship Karena soft white wheat. And the company's anti-board leanings are no secret.
Last month, company president Mark Hayhoe put out a call for Ontario Agriculture Minister Noble Villeneuve to scrap the board's single-desk pooling system, under which all wheat must be sold except for farm-to-farm feed sales.
"The board's monopoly costs the flour users of Ontario over $5 million every year," Hayhoe said. "There's too much at stake to allow just the board to shape the future of our industry."
Meanwhile, the board is preparing to take a tough line with millers in coming talks on how millers buy their wheat. And the board is wondering what else it can do in the face of repeated rejections from the Ontario Farm Products Marketing Commission.
The board asked the commission last spring to allow farmers to sell their own wheat, providing the off-board wheat was all sold in the U.S. The commission suspended the plan when millers complained that it would give American millers an unfair chance to buy Ontario wheat that the province's own millers couldn't buy.
After four months of talks, and offers to put a 75,000-acre cap on the program, the wheat board went back to the commission last month asking for support for the plan, called declared off-board marketing, and was again rejected.
"We're extremely frustrated," says William McClounie, wheat board manager. "We've worked on this plan for over a year, our delegates have voted in support of it, and now it looks like there's no chance it will ever be approved."
Instead, the commission has suggested the board look at broadening the off-board system so growers could sell to millers in Ontario, not just the U.S.
But board chairman Ken Nixon says that "drives at the very heart of the single desk selling." It would let millers play the board against individual growers, and would lead to the death of the pools. Nixon says before the board would accept that option, it would need "a strong producer mandate."
Yet the board feels it can't hold a vote on wheat marketing because the commission has "poisoned" the climate, Nixon says. In 1997, the commission shocked the board by ruling that in any future vote, the pools would be scrapped unless two-thirds of growers voted in favour of keeping them. The board had thought it could keep the pools unless a majority voted for change.
The board must now look for more opportunities for growers to market their own wheat within the pool structure, McClounie says. About 400 growers have already signed up 20,000 tonnes under the board's forward contracting program, which will pay growers cash for their wheat at delivery next summer.
The board is also heading into talks with millers over what's called the processor supply agreement. Under it, the board promises whenever possible it will hold enough wheat in Ontario to meet processor needs. Because of the plan, millers normally don't have to pay for their wheat until the day they grind it. The board pays all storage costs.
In the coming talks, the board will tell millers they'll have to pay higher prices in future. The board will base its white wheat pricing formula on the value of white wheat in central Michigan. The current formula is based on soft red wheat at Toledo. Some years, there's as much as a 25-cent premium for soft white.
The board will also tell millers that if they want to buy Ontario wheat, they'll have to bid for it, McClounie says.
"We aren't legally obligated to keep an inventory of wheat just
for them,"
McClounie says. "If the price is right, the wheat will be there."
back
SEEDBED
By Keith Reid
Good corn yields don't sap your soil
There are many reports this fall of corn crops yielding 200 bushels per acre and more. In most cases, the grower didn't apply anywhere close to enough fertilizer to support that yield. Where did the nutrients come from?The answer is that the nutrients were there all along. What happened is that the growing conditions this summer allowed the crop to make much greater use of them than normal.
Bigger roots = bigger crops
The one common factor in all the fields with high yields was good
soil
structure. This allowed the crop roots to produce both a larger
root ball
than normal and also a greater density of roots within the root
ball.
Of course, the roots don't grow in isolation from the top part of the plant: The ample heat and sunlight that encouraged top growth is what supported the root growth. Fields with restrictions to root growth, however, whether from compaction, waterlogging or acid soil conditions, did not grow the large root systems and did not produce the tremendous yields.
Large root systems had two direct effects on crop growth. First, the crop was able to absorb water from a much larger volume of soil, and so was able to withstand moderate drought much better than its neighbours.
Second, the roots had access to much greater amounts of nutrients in the soil than normal. Larger root systems put more nutrients within easy reach of the roots, since immobile nutrients such as phosphorus and potassium will only move a short distance through the soil. The roots need to go to them, not vice-versa. Even mobile nutrients like nitrogen, however, can be absorb-ed more efficiently by a large, dense root ball.
More mineralization
When we think of weather, we tend to think of its impact on the
crop
growth. The weather, however, has just as much impact on the
organisms
living in the soil. Warm temperatures and the right balance
between
moisture and aeration create ideal conditions for the growth of
soil
organisms as well as plants. This means that there are more
nutrients
released from soil organic matter that can be absorbed and used
by plants.
The impact of this increased mineralization is greatest with nitrogen since it is the nutrient where the greatest proportion is held in organic forms. The influence extends, however, to many micronutrients, and even to phosphorus.
Implications?
Some farmers will worry that this year's high yield will be at
the expense
of future yields, but this is not the case. Even with the high
yields, only
a small proportion of the total nutrients in the soils have been
removed.
Some soil organic matter has been broken down to release
nutrients, but
balancing this is a large volume of fresh organic material that
has been
returned to the soil in the stover and roots.
It is true that a larger amount of phosphorus and potassium than normal have been removed from the soil, but this will be reflected in the soil test. Rather than immediately applying fertilizer to replace what has been removed, pull a soil sample to see how large the effect has been.
A high yield indicates that you are already doing many things
right on the
nutrient management and soil structure fronts.
Keith Reid is an OMAFRA soil fertility and crops specialist based
at Walkerton (kreid@omafra.gov.on.ca)
back to November 16, 1998 Issue