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Don’t change the formula

JOHN MORRISS

EDITORIAL DIRECTOR

Among the vices I will confess to is a lifelong interest in Formula 1 racing, a sport with no socially redeeming value and that some acquaintances dismiss as “round and round” (though it’s certainly less so than Nascar).

It’s called “Formula” because the cars must comply with a formula which specifies engine size, weight, tire size and so on. That’s supposed to put the cars on an equal footing so that there’s enough competition to make it interesting for the spectators, making driver skill the main determinant of the winners. Each team’s technological tweaking within the formula also provides a certain interest, but after a while, it can get out of hand.

Two things happen. The cars get so fast as to become (more) dangerous, and after a while the teams with the deepest pockets start to run away with all the races, making every race predictable, and therefore boring. That’s bad for business – fewer spectators show up.

In the last few years, costs of running a Formula 1 team have gone beyond astronomical. After several years of poor results, Honda has pulled out, citing annual costs of C$480 million to run two cars. Perhaps that’s why it didn’t do so well – it didn’t spend enough. Toyota, which has never won a race, has decided to stay in Formula 1, despite annual losses of $1.8 billion.

So every once in a while, the governors of the sport change the formula – engine sizes, tire sizes, etc. to get everyone back on more level ground. Such changes are being made to some rules this year.

What does this have to do with a farm newspaper?

The point is that those of us who enjoy watching Formula 1 enjoyed it just as much in the ‘60s when the cars had skinny tires, small engines, small budgets and went much slower. Whether a car’s top speed is 200 km/h per hour or 300 km/h makes no difference to the spectator. It’s the competition that matters.

As some will recall, and as the statistics show, farmers also did just as well – in fact better – back in the ‘60s, when 25 bushels was a good wheat yield. As with Formula 1, there have been many innovations since, but costs are up and profits down. Every technological advance is discounted by a system that values large crops at less than small ones. Witness the past year – the world wheat crop is up by 12 per cent, but the price has been cut in half. Farmers were told it was their moral imperative to grow more. Along with the weather, they co-operated, and as usual got their reward – a plunge in prices.

Most businesses wouldn’t put up with this, and if their customers were so desperate, would insist on a long-term contract guaranteeing a profit. But that’s difficult in today’s grain market. In the past, exporters have teamed up to maintain minimum prices, with some limited temporary success. But these days, there seems to be no desire among exporters to give collective action another try.

Except in one regard – agreeing on introduction of genetically modified wheat. With support from industry, U. S. wheat growers have been approaching other countries, including Canada and Australia, to establish a common position on the technology. The idea is simple – if everyone is growing it, customers won’t refuse it. The Western Canadian Wheat Growers is welcoming the initiative, claiming canola yields have doubled over the past 15 years and that wheat should be given the same chance. Actually, Prairie average canola yields for the past five years are 32 per cent higher than the 1990-95 average, and part of that is due to non-GM factors such as hybridization. Wheat yields are up 13 per cent, so the doubling claim is inaccurate.

But assuming that GM technology could increase wheat yields, why not use it?

Or put another way, why? Because if everyone uses it, the “formula” will have changed. Once everyone adopts it, they will be on the same level playing field, producing more at higher cost, and if the market responds as it has to every other technological improvement, producing for less money.

This is not an argument for or against GM itself. But it’s all too easy for promoters of any new technology to take the moral high ground and say that extra yield is necessary to feed the world. But then they must also be prepared to share in the financial risk. It’s time to stop this “Farming is a business” out of one side of the mouth, and “Grow all you can, someone will buy it sooner or later” out of the other.

There has been one technological improvement in Formula 1 that really has made a difference. The drivers are remarkably safe, due to sophisticated structures which can protect them from crashes that would have killed them – and often did – several years ago. Farming, on the other hand, is riskier than ever. Until farmers get a similar structure to protect themselves from wrecks from competing too hard for higher yields, they’re better off sticking to the same formula, even if it means going a little slower. [email protected]

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