Growers could miss out on hundreds of millions of dollars in savings if the federal government proceeds with plans to revamp generic chemical competition, says one input provider.
Farmers of North America contends that giving up the Own Use Import program for the package of reforms tabled by the Pest Management Regulatory Agency could cost growers at least $400 million, an estimate some say is rife with assumptions.
Glenn Caleval, vice-president of FNA, said that is the number the group’s consultant arrived at based on the premise that more generics were eligible for import under the OUI than will be available through the proposed new Grower Requested Own Use program.
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Pierre Petelle, acting head of policy at the PMRA, said that analysis assumes those products would be deemed equivalent, would meet container disposal regulations and would have considerable uptake by growers.
“The numbers being thrown around are quite substantial,” he said.
“There are many layers of assumptions being made here to come up with those figures.”
Petelle said the only concrete numbers he has seen are from Agriculture Canada, showing that for the eight products approved under the GROU pilot program, farmers can expect $50 to $60 million in savings.
“There is much less assumption on those numbers,” he said.
FNA has stated its only concern is how the new GROU program will affect farmers’ profits. Others say the company’s opposition to the program is less altruistic.
Some farmers contend the company is making huge profits by monopolizing the import of ClearOut 41 Plus glyphosate, collecting money from the memberships it sells and the markup it charges on the chemical.
Colin Ottenbreit, a grower from Grayson, Sask., is one of the skeptics. He was sourcing ClearOut for $3.85 per litre from a U.S. distributor last spring until all supplies of the chemical seemed to evaporate. By fall he was told the only place he could get it was through the FNA, which was charging $4.25 per litre.
Ottenbreit finds that galling because FNA would likely get its product at a bulk discount price.
“It’s another middleman I don’t need. I can do this on my own,” he said in an interview last fall.
Petelle said the agency has received calls from other growers raising similar concerns about the margin being collected by FNA.
According to the PMRA, 85 percent of the permits issued to import 6.38 million litres of the generic glyphosate in 2006 went through the FNA. That total has risen to 99 percent in 2007. An annual membership in the FNA costs $500.
“We have a definite concern with that,” said Petelle.
The agency investigated the matter last fall and determined that FNA signed an exclusivity deal with Albaugh Inc., the U.S. distributor of ClearOut. It means farmers have to be a member of FNA to bring the product in, violating the essence of the OUI program, which is to allow any Canadian grower to import approved chemicals.
Caleval dismissed the monopoly allegations. He said FNA isn’t preventing anybody from importing the product. The company was taking care of its members by pre-ordering supply from the distributor. He denied allegations that the company is collecting a margin on the product.
“There is no profit for FNA in it,” he said.
But Caleval acknowledged that the company has sold about 2,000 memberships since ClearOut was approved for OUI import, including 500 in Ontario since January, about half of which he chalks up to the ClearOut battle that has raised FNA’s public profile.
“Every time we get into one of these fights we sell more memberships,” said Caleval.
