Canada's small farmers unite in bid for big discounts
For farming wife Susan Lytle, a recent trip to the farm-supply store offered a dramatic illustration of the tough times facing Canada's grain growers.
After picking up a supply of pesticide for her farmer husband, Joe, Mrs. Lytle, a part-time schoolteacher, noted: "It didn't even fill the back of the half-ton [truck], and it cost more than I earn in a year."
Her friend and neighbor, James Thorpe, agrees: "You can spray $25,000 [worth of pesticides] onto your fields and not even work all day."
The high cost of agricultural inputs may not be as hot a topic around most dinner tables of North America as it is around the Lytles'. Still, it is a critical element in the complex equation that will determine who farms the prairies - fourth-generation farm families like the Lytles and the Thorpes, or megacorporations.
Grain farming in western Canada is in a severe crisis, in large part because of depressed prices due to oversupply. Some analysts propose that the way to boost the bottom line for farmers is to focus less on crop prices and more on the cost of inputs - seeds, fertilizers, and pesticides.
That's what prompted the Lytles and Thorpes to join a new buyers' cooperative called Farmers of North America. "I think it makes sense," says Mr. Thorpe. "The more guys are involved, the more you can save."
Canadian farmers are at a greater disadvantage than US farmers, who are much more highly subsidized and have greater political clout with the federal government.
The FNA, based in Saskatoon, has taken on over a dozen major agricultural suppliers, charging them with unfair trading practices over a commonly used pesticide in order to preserve what amounts to cartel pricing. Consequently, the federal Industry Department's Competition Bureau in Ottawa is taking the complaint "very, very seriously" and is conducting a criminal investigation into the allegations.
The FNA says small-time individual farmers must have the opportunity to make profits from farming.
"Most farmers realize they're paying retail [for seeds, pesticides, and equipment] to produce a product for wholesale," says Steve Nixon, who serves as general manager for the FNA. "We could reduce the cost of inputs by 20 percent."
And each percentage point in the drop of total inputs would increase farm family net income by 10 percent, he estimates - a much more significant improvement than would come from a price increase of a few cents on a bushel of grain.
Even with 1,600 members farming a combined 4 million acres, the FNA still represents a small share of western Canada's farmers. Yet, their efforts are being closely watched. If the FNA succeeds in boosting farm incomes, the revenue is not only expected to make a marked difference in their lives but also help their farming communities.
Despite its collective clout, the FNA hit a brick wall when it bid to buy 130,000 gallons of glyphosate, a common pesticide manufactured by about half a dozen different companies.
"We sent a request for bid to the manufacturers, to the distributors, and to major retailers, and they all turned us down," Nixon says. "We don't want to put companies up against the wall - but we've got to get farmers to a level of profit afforded to every other industry."
Representatives of the companies named in the complaint reject the accusations. "We sure understand the financial pressure farmers are under," says Patti Miller, communications manager in Winnipeg, Manitoba, for Cargill. "When the farmers have a tough time, so do we. But there is a lot of competition out there: nine different companies and over 300 independent dealers."
She adds that in the case of pesticides like glyphosate, "a number of industry standards are in place," developed by the chemical industry and sanctioned by the provinces regarding the safe handling of the chemicals.
"The FNA aren't licensed vendors," she says, and therefore aren't equipped to deal with large volumes of potentially dangerous chemicals. "It would be irresponsible of Cargill" to sell to them in the volumes requested.
"We don't sell directly to farmers at all; we sell to distributors," says Steve Meister, spokesman for Aventis CropScience Canada, another company named in the complaint.
"The whole issue of corporate concentration has become quite significant," says Sally Rutherford, executive director of the Canadian Federation of Agriculture in Ottawa. "It's a basic matter of nervousness all over North America. We're seeing rural communities wither and die in a way they haven't in the past."
Susan Lytle sees the changing demographics of her region in the microcosm of the school where she teaches. "We've got 146 kids in the Dinsmore school," she says. "We had over 200 fifteen years ago." This fall's senior class will have 18 students; next year's, only five.
"It's about more than the wheat farmer up the road," Nixon says. "It's about the RV dealer at the center of town, the travel agent at Midtown."