Farmers Of North America Address “Free-Rider” Problem

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Membership has its privileges. That’s why Farmers of North America (FNA) has made changes to how it shares benefits so its members get more and “free riders” less.

“The fact of the matter is prices drop just when there are (FNA) members in a community and prices will often be disciplined,” Bob Friesen, CEO of FNA’s Strategic Agriculture Institute said in an interview.

Now instead of sharing the full saving on farm inputs and other products purchased through FNA up front, FNA members will pay discounted prices initially and then get the rest of their savings through FNA’s prepaid MasterCard. Members can use the money however they like, Friesen said.

The change will also make it easier for FNA to do business with product suppliers who complain dealing with FNA lowers their returns on all sales.

“Undercutting the competition results in lower prices across the board and so the investment of each (FNA) member in making that lower-price product available is realized by every farmer,” FNA said in a news release.

“We’re thrilled that farmers are saving money, but strategically, if we’re trying to increase our bargaining power with the big input manufacturers by increasing our membership size, we need to find a way of maintaining the value available within the membership.”

FNA is a private company created in Saskatchewan in 1998 to negotiate lower costs for its members on inputs such as fertilizer and pesticides, as well as equipment and parts.

Friesen says the $625 a year farmers pay to be a member is used to finance FNA’s operations and all the savings after costs are returned to members.

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