When FNA first enters a particular line of business, our first choice is to work with local suppliers.
FNA respects local businesses and views them as essential members of our communities.
It is important to recognize that there are many local businesses that are FNA Preferred Suppliers. These are businesses that are important to farmers as well as the entire community, whether it is a parts supplier, a welding shop – even a local hotel; all kinds of local businesses have joined FNA.
FNA also has a network of depots either in conjunction with existing businesses or as new contributions to the community by active FNA members. The facilities provide for distribution of FNA-branded and direct-from-manufacturer products.
While FNA detractors have tried to characterize FNA as out to destroy local ag suppliers, this is just not true.
A close look at the FNA system will clearly demonstrate that we do not operate under the idea that local dealers are getting rich off the producers and so have some great margins we can return to the farm.
The truth is that a lot of local dealers have razor thin margins and it has been as hard a go to stay in business for many of them as it has for many producers.
The excess margins FNA is targeting for return to the farmer are not at the local dealer level. They are at the manufacturer and distributor levels. Our economic analysis has clearly demonstrated that there are large margins being vacuumed out of producers pockets and the local dealer only gets a peak at the money as it flies on its way – not just out of the community, but often out of the entire country to foreign interests who have no concern for the financial situation of Canadian farmers.
Certain lobbyists for the chemical giants react with indignation when FNA says those companies want to get every dime possible out of the farmer. Very senior people have waxed eloquent about how offended they are that FNA would dare question their motives.
Understand, this is not some declaration of bad character. It is simply a fact. These corporations are organized with their own single purpose: to maximize the value of their shareholders. They exist precisely to extract as much value from farmers as possible. If this is not so, let them inform their shareholders that they are not trying to maximize value and those people will soon be gone from the industry. This is not evil, it just is. And so farmers need to have someone who exists on the other side of that equation if there is any hope of a balancing of market power.
How this affects local chemical dealers is a bit complex. Most dealers are caught up in a variety of bundled programs with rebates and incentives that drive them to serve the interests of the chemical manufacturers.
But consider this: for an FNA member who saved $5,000 on his glyphosate bill in 2006, the impact on the local community is extremely positive. The local dealer would never have received all of that $5,000. He might have gotten 10% -- maybe even 20%. So the FNA member could literally take $1,500 of his $5,000 savings, write a donation cheque to his dealer – get absolutely nothing for it except community spirit -- and still be $3,500 better off. That other $3,500 could go to buying things from other local businesses or in fact other purchases from that same local dealer that the farmer otherwise could not have afforded.
Deciding not to save that $5,000 really is the same as writing a donation cheque – not to the dealer, but to the manufacturer. So if you believe CropLife represents a bunch of charities go ahead and continue donating your money to them.
The impact on local dealers will always be limited because the impact that FNA has is to create price competition. Manufacturers will not abandon entire markets just because we force them to give up some of the excess margins they have so long enjoyed. There is plenty of room for them to make a healthy profit even if they do have to properly compete and the proof of that pudding is what happens in other countries.
If a chemical company can make a profit selling a product for $4.00 in , they can certainly do the same in .
So FNA has a local first preference, but ultimately, our job is to serve the financial interests of farmers. Where we cannot find local partners, we will supply farmers through other means, including direct distribution ourselves if that is what is required.
What We Do 
