COVER STORY: 16 years after NAFTA, 'harmonization' still elusive

BOTTINEAU, N.D. -- Larry Neubauer thinks 16 years after the North American Free Trade Agreement is enough -- it finally should be time chemical companies be required put "NAFTA labels" on products registered in the U.S. and Canada.

He thinks now may be the best time to achieve a mandate for NAFTA labels because Canadian farmers should want it, too, as the U.S. dollar has weakened.

"As long as NAFTA labels are voluntary, the chemical companies still have the right to pull that label and slap a country-specific label on at any time there's a necessary cause for it," Neubauer says as he sits in his combine, late in the harvest season in mid-November. "The way it is now, they are the ones who get to decide when it's necessary."

Neubauer, 45, has been thinking about this issue for half of his farming career, which already spans more than three decades.

His parents, Leonard and Lois, retired from farming in 1997.

"When I was 10, my dad asked me if I wanted a field of crop that was my own, so I rented a field from him for three or four years," Neubauer says. "When I was a freshman in high school, I rented a quarter that my dad had rented from a landowner in California, and my dad gave me an opportunity to rent another quarter he had," Larry says.

When he graduated from high school in 1982, Larry already was renting 1,000 acres in a family farm that totaled a little less than 3,000 acres -- about half of what it is today.

Neubauer looked at college as a sort of technical school farming -- a place to learn specific things about crop production and soil characteristics.

He took some ag classes at North Dakota State University-Bottineau, now Dakota College, and "during the following winter quarter, I went to Fargo (N.D.) and took some higher levels of soils and agronomy," he says.

While in Fargo, he met Tami Boucher from Rolette, N.D. She'd graduated that winter with a degree in agronomy and was looking toward a career in crop consulting.

The two were married in 1985. Soon, the farm and family grew: 1988 -- Sara, now a senior at the U.S. Air Force Academy; 1989 -- Robert, now a sophomore at NDSU in mechanical engineering; 1993 -- Tyler, 16, and 1996 -- Philip, 13, both in Bottineau schools.

Awake to a dichotomy

The family is strictly into crops -- flax, spring wheat, durum and barley. They added canola about 20 years ago and sunflowers 10 years ago.

Chemical policy is important up here.

One of the big technological turning points for Neubauer was 1992, when the family traded his father's air seeder and bought a Concord system.

"The acreage had increased and we needed to cut down some of the seeding time," Neubauer says. "Some of the land had been 'mined' of its phosphorus for a few years, so the fertilizer requirements instigated the purchase."

Of course, the key to direct seeding is the accurate use of farm chemicals.

In the mid-1990s, Neubauer first started to see discrepancies between product availability in the United States and Canada.

His father had relatives in Deloraine, Manitoba, about an hour north, and branches of the family would get together for summer picnics, alternating on either side of the border.

"We'd talk about why we couldn't get some things that they could, and -- of course -- they didn't understand it either," Neubauer says. "I just pondered over it, not knowing why."

Neubauer soon perceived that the Canadian farmers had chemical tools available to them at a lower cost than Americans, but yet could sell their grain into the U.S. market in direct competition.

"That raised my hackles. I attended one of those border rallies at Portal, N.D.," where they were protesting Canadian imports, he recalls. Because of his concern on the topic, he was asked to run for the Bottineau Farmers Elevator board of directors.

"We did have one blockade demonstration at the Peace Garden about two years later, and that was about the last one."

Producers such as Neubauer asked the North Dakota Wheat Commission to get involved. That eventually led to a lawsuit and a tariff quota.

"That benefited North Dakota and U.S. producers quite a bit," Neubauer says, noting that some of the instigators included Jim Diepolder of nearby Willow City, N.D.; Curt Trulson of Ross, N.D.; Louis Kuster of Stanley, N.D.; and Neubauer himself.

"I've found that success can be measured in various ways," Neubauer says. "Success doesn't always mean getting everything you want, but the efforts had positive results."

Some of the same group pushed for chemical harmonization.

Northern exposure

Beyond the pricing issue, Neubauer learned from his Canadian connections that though chemicals have different names on either side of the border, the active ingredients often are largely same -- just labeled differently.

He didn't think this should be so, especially with North American Free Trade Agreement.

"The chemical companies allowed a volunteer option of having a 'NAFTA label,'" he says. "But when they didn't come forth to do that, producers worked to apply political pressure again."

Instead of requiring NAFTA labels, though the rule-making allowed for voluntary NAFTA labels, which turned into another frustration for Neubauer, when, he says, some of these companies acquired the voluntary NAFTA labels only on products that no longer are in common use.

When currency valuations equalized between the United States and Canada, Neubauer actually was encouraged about the prospects for chemical harmonization.

"I thought then the Canadians now would have an opportunity to realize value to them with these NAFTA labels," he says. "When our dollar was worth so much more than theirs, it was unfair only from the U.S. side. The Canadians weren't in favor of it because it wouldn't do anything for them."

Now, the Canadians probably would favor it, but most U.S. commodity groups on this side of the border are not as willing to push it, Neubauer says.

"It appears everybody wants to go back to a reactionary mode. When things turn the other way again (on currency values), that'll be too late," he says.

Neuebauer thinks there's "too much politics" played in some of commodity groups, and he wonders whether the common producer is considered.

"You have chemical companies consolidating and merging with seed companies and there gets to be an intertwined relationship," he says. "The chemical companies appear to be the wealthiest in the research and development areas and, ultimately, are involved in the politics of the thing.

Chemical company are entwined with seed companies through joint ventures, mergers and buyouts. Seed and chemical companies have farmer dealers, which provide "incentives and additional lifestyle" for on-farm dealers, some of whom sit on the boards for grower organizations.

Neubauer says the U.S. Durum Growers Association doesn't have ties of sponsorship with chemical companies, while others appear more linked.

He is disappointed that the North Dakota Grain Growers Association, which represents spring wheat and barley producers, hasn't been as active on mandatory legislation as he'd like.

"They've indicated that they prefer a voluntary 'carrot' approach vs. the legislative 'stick' approach," Neubauer says of the Grain Growers. "They've said you don't want to alienate the chemical companies. As a producer, I don't see much potential for results for producers from that angle."

Canola farmers have been represented at national discussions, but so far have been reluctant to put real support behind legislative action. Pea and lentil representatives have indicated they'd like to keep the NAFTA labels voluntary. The sunflower folks haven't weighed in to any great extent, even though there occasionally are products for bird control or sclerotinia available on one side of the border and not on the other.

Neubauer acknowledges he really doesn't want to go chemical shopping in Canada, even if NAFTA labels become mandatory.

"The farmer doesn't really have the time to be running north or south across the border for their chemicals," he says.

He thinks the dealer network will put this in their pricing structure.

Neubauer says his interest in all of this is very personal.

"I've got kids that have indicated an interest in farming," he says. "My kids have had crop production projects since age 14, just like I did. They look at other jobs and know what kinds of salaries they can get for those. I want an even playing field with our Canadian neighbors. My kids' opportunities will depend on that level playing field, or the risks of higher production costs will weigh on their choice to farm or not."