MOOSE JAW, Sask. – How much is an extra bushel per acre worth to you?
Agricultural economist Richard Gray said farmers should consider investing in research as an investment in potential profit.
The annual average rate of return on public crop research is 81 percent, he said. In most industries, anything more than 15 percent is a good return.
Yet some producers balk at the thought of mandatory levies that would fund crop research and result in yield increases.
For example, a one-bushel-per-acre increase in yield might not sound like much. But on a 2,000-acre farm, at $5 per bushel, that amounts to $10,000 per year.
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“What would you invest to get a one bushel increase?” he said at the recent Farming For Profit conference.
That yield increase will build over time, Gray added, leading to even better returns.
Information from the Canadian Seed Trade Association shows that private sector funding pays for 39 percent of research. Base funding from the federal agriculture department pays for 21 percent.
Producer checkoffs pay just four percent.
Gray noted that only the Saskatchewan Pulse Growers require a one percent non-refundable checkoff and all others are refundable. But he said pulse growers are benefiting from that compared to other commodities by having more control over varieties and intellectual property.
The amount Canadian producers contribute to research is “almost inconsequential” when compared to Australian producers.
In Australia, the Grain Research Development Corp. requires a one percent checkoff. The government then matches the amount. He said if Canadian farmers adopted the Australian model, they would see their share of research funding go to $164 million from $24 million, plus the matching government share.
Gray said most germplasm behind the varieties under development by private companies now has been developed by Agriculture Canada.
Co-ordinating research and sharing knowledge are becoming huge issues among private companies, he added. Producers and companies could work together, recognizing that science is in the public domain.
