A Farmer’s Primer on the Bank of Canada

Jul 07, 2023

As a farmer, you’re probably not terribly interested in what a central bank is or what it does. The trouble is, they seem to be everywhere these days, influencing everything from stock markets to prices for the commodities Canadian farmers produce. As such, having a working knowledge of central banks could be useful as you go about your daily routine.

What is the Bank of Canada?

In a nutshell, the Bank of Canada is the country's central bank. Its role is “to promote the economic and financial welfare of Canada,” as enshrined in the Bank of Canada Act.

The Bank of Canada is charged with influencing the supply of money circulating in the economy, with the goal of keeping inflation low and stable. This hasn’t been going so well over the past 18 months, with inflation soaring to the highest in decades.

The central bank manages public debt programs and foreign exchange reserves for the Government of Canada. It also issues and distributes Canada’s banknotes.

Last, but not least, the Bank of Canada oversees financial systems within Canada and internationally. Their goal is to keep these systems safe and efficient.

The information above is largely from the Bank of Canada’s website. As an aside, you may notice that there is no mention in the central bank’s raison d'être of striving to maintain low unemployment levels and buoyant stock markets.

How is the Bank of Canada structured? How does it get things done?

The policy-making body of the central bank is known as the Governing Council. The council is made up of the Governor, the Senior Deputy Governor and four Deputy Governors.

You may have heard the name Tiff Macklem in the media. He is the Bank of Canada’s tenth Governor, appointed in June 2020 for a term of seven years.

The council's main tool for conducting monetary policy is setting the target for the overnight rate. This benchmark short-term interest rate is normally set at eight fixed announcement dates, scattered throughout the year. The next meeting is on July 12.

In a typically Canadian twist, the Council must reach its decisions about the key interest rate by consensus. This is different than for many other central banks, which operate on a one-person, one-vote majority system.

The verbiage used by the central bank when making its interest rate announcements and giving economic updates is closely scrutinized. In this way, the central bank also gets things done by signalling its plans and intent through statements, apart from of its direct actions with interest rates.

The Governor and Senior Deputy Governor are appointed by the Bank's Board of Directors (with the approval of Cabinet), not by the federal government.

The Deputy Minister of Finance sits on the Board of Directors but has no vote.

Is the Bank of Canada part of the government?

Well, there are some clear ties between the government and the central bank, as explained above.

However, the central bank is designed to be an independent monetary institution, thus separating the power to create money and the ability to spend it.

The central bank is also supposed to take a longer-term view of the country's economic situation than a government that is concerned with re-election. Sounds good in theory, although there have been times when the central bank seems to be rushing to put out wildfires as they pop up, rather than questioning why the proverbial forest is burning in the first place.

The Bank of Canada can adjust its short-term interest rate to influence economic growth and inflation, as noted above. This influences spending and saving by businesses and consumers. Eventually, it affects things like mortgages, lines of credit and other, longer-term interest rates which matter to average Canadians.

The next Bank of Canada announcement is scheduled for July 12, as mentioned. The general expectation among economists is that the benchmark overnight interest rate will rise by 25 basis points.

Source : Syngenta.ca

Video: Turning Plant Defense Into a Management Strategy

Turning Plant Defense Into a Management Strategy

Understanding how a plant responds to stress is one thing.

Using that knowledge to make better management decisions is another.

Systemic acquired resistance, or SAR, is the plant's more direct defense response. When stress or infection occurs, the plant begins signaling throughout its system and preparing defensive compounds.

But if we know that response exists, can we help prepare the plant before the stress arrives?

The answer starts with understanding what triggers the response and what the plant needs to carry it out.

The Trigger and the Fuel

Salicylic acid plays an important role in triggering the SAR pathway.

Think of it as turning the truck on.

The engine may be running, but it still needs fuel to do the work.

In this case, manganese plays an important role in supporting the enzyme systems involved in the plant's defensive response.

This makes manganese status an important part of the conversation. Whether a producer is using tissue testing, sap analysis, or simply scouting for visible deficiency symptoms, the goal is to make sure the plant has adequate manganese available.

Manganese is required in relatively small amounts, but that does not make its role small.

If the plant receives a signal to defend itself but lacks the nutrition needed to support that response, it may struggle to carry out the process efficiently.

The trigger matters.

The fuel matters too.

Prepare Before the Stress Arrives

The best time to think about stress management is before the plant is overwhelmed.

Once a crop is already struggling, management can quickly turn into a game of catch-up.

This is similar to nitrogen management. Once a plant becomes severely deficient, correcting the problem does not necessarily erase the time and yield potential already lost.

Plant defense can work the same way.

Low-rate, targeted approaches designed to support the SAR pathway may fit best ahead of an expected stress event rather than after significant damage has already occurred.

That requires producers to think about predictable stress.

We may not know exactly what the weather will do tomorrow, but we generally know summer heat is coming. We know certain field conditions increase disease pressure. We know a herbicide application can temporarily stress a crop as the plant processes the chemistry.

Even a properly timed and labeled herbicide application can create a temporary response in the plant.

That does not mean the herbicide is bad.

Weeds can create significantly more yield loss than the temporary stress caused by controlling them.

The question is not whether we should eliminate every stressor.

The question is whether we can better prepare the plant to manage necessary and predictable stress.

Not All Stress Is Bad

Stress is a normal part of plant growth.

A perfectly stress-free environment does not exist in the field.

In fact, some stress is necessary for normal plant development. A plant responds to wind, temperature, moisture, sunlight, and countless other environmental signals throughout the season.

The environment is stress.

The plant's job is to manage it.

Problems begin when the stress load becomes greater than the plant's ability to respond.

Extreme heat, drought, high salt concentrations, disease pressure, and even certain management practices can add to that load.

This is where understanding SAR becomes useful.

Instead of waiting until the plant is visibly struggling, producers can begin identifying periods when stress is likely and make management decisions around those windows.

ISR Starts With the Soil

While SAR is a more direct defense response, induced systemic resistance, or ISR, brings the conversation back to soil health.

The longevity of a farm is closely connected to the health of its soil.

Carbon plays a major role because it supports biological life within the soil. Bacteria, fungi, and other organisms interact with plant roots and influence how the plant grows, accesses nutrients, and prepares for stress.

This is why soil health cannot be reduced to one product or one application.

It is a system.

Keeping living plants in the field longer can support biological activity. Cover crops may fit some operations. Better water management can improve soil conditions.