December 2008 Archives

The argument in favour of massive government subsidies for alternative energy sources is simply that we won't get these new energy sources started up without government help. Government money is needed to work through the early growing pains, so to speak.  Without government assistance, we won't have these alternative energy sources ready to go, with sufficient output, when we really need them.

The counter argument is that the point "when we really need them" will be when oil is so scarce and expensive that these alternative energy sources will be competitively priced without the need for government subsidies. This switch over will happen all on its own, eventually and naturally (but perhaps not smoothly.)

An article in The Economist ("Wind of change," Technology Quarterly, December 6) explains the evolution of wind energy, and makes a good argument in favour of government incentives. The first "wind farm" was built in California in the 1980s with "generous tax credits," the article says. Those windmills were small by today's standards, with a rotor diameter of 15 metres (50 feet) and output of tens of kilowatts. New machines have a capacity of 1.5 to 2.5 megawatts and rotors up to 100 metres (330 feet) across. And turbines on the drawing board have capacities close to 10 megawatts. Wind energy currently accounts for one per cent of total global energy capacity, but a Danish research firm, BTM Consult, forecasts that will jump to 2.7 per cent by 2012 and six per cent by 2017, the article says.

Wind energy is still highly subsidized, but it taps into an energy source that doesn't have the political/ethical baggage of, say, oil and grain-based ethanol. "Wind power is attractive because it is a widely available and renewable source of energy that produces neither pollution nor climate-changing greenhouse gases," the article says.

The "big picture" message I took from the article is that countries that take a lead on subsidies can sometimes spawn some really successful private companies that lead the world in their fields. Denmark derives 20 per cent of its energy from wind. It was almost entirely dependent on foreign oil for its electricity, and after the oil price spike in 1973, the Danish government "embarked on an ambitious research project to develop the technology," the article says. Now some of the best wind turbine engineers are from Denmark. And Vestas, the leading manufacturer of wind turbines, is a Danish company. If the growth in wind energy production around the world grows as fast as BTM Consult predicts, Vestas products and Danish engineering know-how will be in high demand.

The Step Up program sounds like a great way for a young farmer to spend some time on another farm, learning a management style other than their mother's and father's. The program sounded so good that I asked the organizer, Melissa Dumont with the Canadian Farm Business Management Council (CFBMC), to ask program participants if they'd like to write about their experiences. I got two great articles. The first, by Harris Ivens (in the photo), will be in the January 12 issue of Grainews. Here's the thing, Harris is from Toronto. He's not from a farm. The second writer, Emma Holmes, is from Vancouver.

It seems that young farmers, the people the program was designed for, are not signing up. Maybe they can't spend eight weeks away from their own farms. But in terms of useful experience that sets them up for a long successful future in the business, these eight weeks might be as valuable as four years in university.

More details on Step Up

As outlined on the CFBMC website, Step Up was created for these three reasons:

—So young farmers can learn critical aspects of farm business management from their peers in a hands on setting

—To transition farm business management knowledge from one generation of farmers to the next

—To provide a learning and sharing environment for both the mentor (the farmer) and the mentee (the student.)

Step Up is taking applications right now for 2009 mentors and mentees. Note, there are two sides to this program. It needs willing mentors, so if you want to help a young farmer, then sign up. For more information, contact Melissa Dumont at melissa@cfbmc.com or 1-888-232-3262 extension 30.

Dave Levick from Porcupine Plain, Sask., called to say that he hasn’t been able to make a deposit in his AgriInvest account. In fact, he can’t even OPEN an account to deposit the 1.5 per cent of eligible net sales for 2007 that he qualifies to deposit under the program rules.

Dave called after reading the short article, “AgriInvest helps with cash flow,” on page 3 of the December issue. He says the Grainews article is wrong. He says AgriInvest can’t “help with cash flow,” as the headline suggests, because “it doesn’t exist.” I emailed and phoned Ellen Funk, one of my contacts with the program’s administration office in Winnipeg. Turns out that Dave has raised a very important point.

The government is still working with the banks and financial institutions to get a system set up for these farmer accounts, Ellen says. So Dave is right, you can’t open an account and make a deposit right now, even if you wanted to.

I asked Ellen if the government would make its matching dollars available for withdrawal even though farmers couldn’t make their own deposits. (For each dollar you deposit in your AgriInvest account, the government puts a dollar in an account that it holds for you.) Ellen says they’re “working towards” that possibility.

Meantime, the only AgriInvest money available to you is your share of the original $600 million Kickstart amount, which was announced in 2007. At that time, you had a choice to take the money right away or deposit it in a government account under your name. If you took the money right away, AgriInvest can do nothing to help you with current cashflow shortages. If it’s still there waiting for you, call 1-866-367-8506 to withdraw some or all of it.

Thanks for the tip, Dave. 

I'm following up on Andrea Mandel-Campbell's suggestion that Canada is missing an opportunity to "brand" canola. The author of "Why Mexicans Don't Drink Molson," says Canadians are generally bad at branding the things that SHOULD BE Canadian brands. Canola is one of her examples. Despite the facts that canola is a Canadian "invention" and that Canada is the world's leading exporter of canola seed and oil, there is no big time Canadian canola brand, she says.

Well, she's actually wrong. Canola Harvest, the brand of Richardson Nutrition (formerly called Canbra Foods), is sold on store shelves in the U.S. And as proof that the brand has made it to the "big time," Lisa Campbell, program manager for canola utilization with the Canola Council of Canada, led me to the blog site of American Stephanie O'Dea at crockpot365.blogspot.com. I got this photo from her site. See the Canola Harvest bottle. O'Dea takes a photo of the ingredients she uses in each day's crock pot recipe. This photo is from day 345, December 10.

O'Dea has one of the top 2,000 blogs, which is impressive given that there are millions of blogs. She gets lots of media attention, including the Rachael Ray show. And she gets 15,000 readers a day. To have her flash a Canola Harvest bottle from time to time is pretty good advertising for an up and coming Canadian canola brand.

To keep you up to speed on income support programs, I’ve got two announcements from the Growing Forward adminstration. “Growing Forward” is the umbrella name for the new programs, including AgriStability.

First, the Government of Canada has once again extended the interest-free period for Canadian Agricultural Income Stabilization (CAIS) program and AgriStability overpayments. Interest will not be charged on overpayments until January 1, 2010.

     Michelle Snyder, communications strategist with Ag Canada's Growing Forward, says more than 6,900 farms still owe money for CAIS overpayments and 200 owe for AgriStability overpayments. Overpayments usually result when interim payments or Targeted Advance Payments are too high, and have to be clawed back, she says.

     If you don’t want to be in the ugly position of having to pay back money to the government, you can request smaller interim or advance payments just to be sure. Another strategy is to get as much as you can up front, and rely on extensions like the one offered today so you can keep the money interest-free for years before having to pay it back.

     Snyder says farmers who have overpayments are eligible for program payments in following years, but generally, overpayments are deducted from eligible payments before they are sent out. "So, if you have an AgriStability overpayment for 2007, we will deduct that amount from your 2008 payment (if any)," she says. "The interest deferral helps by stabilizing the amount that is owing as it does not accrue interest."

     The announcement applies in provinces where the federal government delivers the programs. (British Columbia, Saskatchewan, Manitoba, Nova Scotia, New Brunswick, Newfoundland and Labrador and Yukon.) 

Adjustment period extended for AgriStability

The second announcement, issued last week, says you now have 18 months to review your AgriStability payment calculations and request an adjustment to your information.

Here are the details, as provided by Growing Forward:

Starting with the 2007 program year, the adjustment period has been extended from 90 days to 18 months. You have 18 months from the time you receive your Calculation of Program Benefits Notice (COB) to ask for an adjustment to the information used to calculate your payments.

If an adjustment is accepted, you will be issued an adjusted COB. You may request another adjustment related to the changes to that COB within 90 days of the date of that adjusted COB or within 18 months of the date of the original COB, whichever is later.

If the adjustment is denied, you will receive a letter of notification. You may submit an appeal within 90 days of the date of the notification letter. The appeal can relate only to the same issue reviewed during the adjustment request. A new issue cannot be raised.

Note that the length of the appeal period has not changed. You have 90 days from the date that you are notified by the administration of the decision, which is subject to appeal.

Larry F. Slater of Henribourg, Sask. and Bruce Isaak of Medstead, Sask., won our draw for  the book called “Classic John Deere Two-Cylinder Tractors: History, Models, Variations & Specifications 1918-1960.” The author is John Dietz from Arden, Man. The publisher’s description of the book says, “These stalwarts of agriculture and industry get their due in this fascinating, fully detailed, extensively illustrated history. New photographs by tractor specialist Jeff Hackett, along with the latest comprehensive information, make this book the most complete and up-to-date account of America's iconic tractors ever published.” To order your own copy go to www.voyageurpress.com and shop online.

Two more  books to give away

We have a copy of Scott Garvey's new book, called "The Tractor in the Haystack." I have more details on that book in my blog entry for November 18. We also have Jarrod Pakosh's "Versatile Tractors: A Farm Boy's Dream" to give away. Send your entries to me by email. Put "book draw" in the subject line. I'll draw a winner for each book on January 31.

The U.S. and EU are soon to implement the final tiers in their emissions control standards for highway and off-highway diesel engines. In the U.S., final Tier 4 regulations, which will be fully implemented by 2015 for farm tractors and a few years earlier for highway trucks, call for a 90 per cent reduction in NOx emissions from Tier 3 standards. (This chart, from the John Deere website, describes the whole emissions reduction process simply and thoroughly. Click on it to enlarge.)

What's interesting to me is that the leading method to achieve these standards in highway trucks uses urea to break down nitrous oxides (NOx).  This system is already in use in Europe, using a urea product called AdBlue. Here's a description of how it works, taken from the AdBlue website:

"AdBlue is a solution of urea in water (32.5 per cent), which is used in lorries that use diesel oil, in order to have them run with less impact on the environment. AdBlue is taken on board the lorry in a separate tank. AdBlue is injected into the hot exhaust gases before a special catalyst. The nitrogen oxides that form during the combustion are converted into elementary nitrogen and water."

New on-highway trucks sold in the U.S. in 2010 and beyond will have to be Tier 4 compliant, which means service stations will have to start carrying urea. A truck will use two or three litres of urea for every 100 litres of diesel. From what I hear, the urea required from the truck market will be a small percentage of the total supply, but it means more demand for urea nonetheless.

Harvey Gjesdal, a farmer and machinery inventor from Birch Hills, Sask., wrote for Grainews regularly from 1976 to 2000. He wrote us a letter recently. I put a few snippets in Wheat & Chaff in the December issue, which will hit mailboxes next week. The complete version follows.

Here is the whole letter:

A number of years have now passed since I shared thoughts with many of you through Grainews. They were great years and it was a real joy to share all kinds of thoughts with you, as well as receiving your thoughts.

In January I will reach my 87th birthday and that nine-mile trip to the farm 300 days each year is still part of the joy of farming.

Many of my home-built machines are still in use and one of my most recent projects was to put a 100-page album together of projects I have worked on since I was 10 years old. This of course means more to the owner than it does to anyone else except the family, who have each asked for a copy.

The two most important machines I have developed were the rotary snow plows in 1948 and the Gjesdal grain cleaner in 1978. The snow plows had a good run until about 1960, at which time rural roads were all greatly improved for year-round travel. Local municipalities since the 1950s have also taken over the road conditions in most rural areas.

The grain cleaner was patented in 1982 and since patents are legal for 17 years, there were no more royalties as of 1999. Production has continued with several manufacturers and as of January 2009, Flaman Sales of Southey will show three new models at the Farm Production Show in Saskatoon. Flaman Sales operate on a large scale, with outlets in Edmonton, Lethbridge, Nisku, Prince Albert, Regina, Saskatoon, Southey and Yorkton.

It has been a great year in the farming industry, with good moisture, no frost, good harvesting conditions and bins overflowing. We see many plastic bins around the country.

Lorna, our youngest daughter, has taken a great interest in our farming operation and has become very capable. Nancy, our other daughter has become very active in the medical field and is now working in Calgary and surrounding hospitals. Our son, Roger, has become an Alberta resident, too, and has taken a keen interest in trucking and the oil industry.

Jennie and I both have roots that go deep into farm life, plus we have traveled to 20 countries around the world. We have never regretted spending money on travels, even though the most enjoyable part is coming home again.

A very special Merry Christmas and Happy New Year to all who I met during my years as a small contributor to Grainews.