The Western Grains Research Foundation will have to dip into its reserve fund in order to continue funding wheat and barley breeding programs in 1999.
Farmers sold substantially less grain in 1997-98, which will mean a sharp reduction in the amount of money raised by the research checkoff collected from Canadian Wheat Board final payments in January.
Lorence Peterson, executive director of the foundation, said it looks like the amount collected from the barley checkoff will be down by almost 50 percent while wheat will drop by about 20 percent.
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federal government proposed several months ago to increase the compensation rate from 80 to 90 per cent and double the maximum payment from $3 million to $6 million
Last year the voluntary checkoff raised $1.13 million for barley and $4.2 million for wheat.
“It’s likely that for both wheat and barley breeding funding for 1999, we’ll have to dip into the reserve a little bit,” said Peterson.
There is just under $5 million in the reserve for wheat and $1.5 million for barley. Federal legislation requires that each year 25 percent of the money collected from the checkoff goes into the reserve to ensure research programs can be financed in years of low revenue.
“It probably takes 10 or 15 years to get a new variety, so you can’t just turn it off and on,” Peterson said.
The legislation puts no floor or ceiling on the reserve fund. The foundation would like to see the reserve maintained at approximately 1.5 times the average checkoff, but that is still under discussion with the federal government.
Amount raised
Over the past four years, the 20- cent-a-tonne checkoff on wheat has raised an average of $3.3 million for wheat, while the 40-cent-a-tonne barley levy has generated an average of $800,000 in revenue.
About 90 percent of the money is used in varietal breeding programs at universities and Agriculture Canada research stations across the Prairies, with the balance used for administration.
Meanwhile, it looks like about 7,000 prairie farmers will opt out of the checkoff for 1997-98, about the same number as the previous year. The deadline for doing so was Oct. 31.
In the checkoff’s first year, 1993-94, about 23,000 farmers opted out. That dropped to about 7,000 the next year, climbed back to 13,000 and then dropped back to 7,000 the past two years.
Peterson said he expects to see the dropout rate decline over time.
“As more information gets out about the new varieties being developed and how the money is being used, producers will see the value,” he said, adding that varieties resistant to fusarium and wheat midge are being developed partly with the foundation’s money.
Over the last three years, check-off money has assisted in the development and release of 15 wheat varieties and 11 barley varieties.
