Cargill’s crushing plant in Clavet, Sask., is paying premiums to farmers on six varieties of canola.
“We’re encouraging farmers to grow seed that we believe will perform well at our crush plant,” said Mark Stonacek, Cargill’s oilseeds manager.
The varieties are Synbrid 220, Clavet, Jewel, 2631 Liberty Link, IMC 03 and selected Roundup Ready canolas. Stonacek said Cargill picked varieties that perform well for Saskatchewan farmers and that meet certain oil profiles and oil content requirements.
“This is our first stab at doing this. Over a number of years we think the market in general will move more towards these kind of programs,” said Stonacek.
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“We’re still learning which varieties will perform better as we go forward.”
Stonacek said the bonus depends on the whole package, including variety and shipment period, but refused to release details about what the premiums would be.
One part of the program requires seed for the 1999 season to be purchased from one of Cargill’s farm service centres or seed retailers. That has at least one farm group nervous that farmers could become captive purchasers of seed.
“It’s just the thin edge of the wedge,” said National Farmers Union vice-president Cory Ollikka.
Canola Council of Canada president Dale Adolphe said the stipulation is a necessary part of identity preservation.
“You’ve got to prove it’s what you say it is,” said Adolphe.
He said Cargill is responding to market demand for specialty products, like specific fatty acid compositions.
“It’s a departure from bulk commodities and bulk commodity marketing. We’re really now product marketing,” said Adolphe.
“It’s responding to market demand and that’s what all production should be doing is responding to the market and not trying to push the market.”
Adolphe does have concerns about how far the industry can specialize. At some point there are going to be too many different types of canola.
“It can almost get endless.”
Specialized production isn’t a new concept. The Canadian grain industry has been separating feed barley from malting barley and animal feed peas from human food peas for years. This is taking things a step further.
Nor is Cargill the only company paying premiums based on oil content and other elements. Canbra Foods has been paying oil premiums for at least 15 years, said Maurice Regimbald, Canbra’s manager of grain procurement. The company pays premiums for canola with a certain oil profile.
“There’s extra work for the farmers so we pay him a premium for that,” said Regimbald.
Premium programs require the producer to have a production contract with Canbra.
CanAmera Foods was contacted regarding premiums, but declined to comment.
