Incentives add to manufacturers' bottom line. (Research Reports).

What do ag retailers think of the rebate or incentive programs offered by crop protection product manufacturers? Who utilizes the system the most? Well, retailers seem to be happier with the programs now than in the past and now need them to apply to their bottom line.

Results from a recent Doane Agricultural Services survey of retailers across 20 Midwestern and Southern states show that retailer satisfaction levels with programs supplied by crop protection manufacturers is on the rise. Doane Agricultural Services asked retailers to rate their satisfaction with the programs from 10 key manufacturers of crop protection products.

Retailers' overall satisfaction with incentive programs appears to be on the up swing. Year-over-year changes for six of the 10 primary manufacturers show slight improvement in overall evaluations. The average incentive payment amounts for the 2001 crop season ranged from a high of 13 percent of purchases paid out by the company rated highest on overall satisfaction, to a low of one percent paid out by the company rated the lowest.

Half of retailers' total 2001 crop protection product net profits came from manufacturer incentive programs, which is no different from that shown in last year's report. The percent of crop protection product net profits coming from incentive programs is highly dependent on annual sales volume of this product category: The higher the total annual sales volume, the greater the dependence on incentive programs for profit. By far, the most common use of manufacturer incentive payments is to provide additional support to the bottom line.

Joe Michaelree is market research manager at Doane Agricultural Services, St. Louis, managing all custom and multi-client market research projects. He can be reached at 314/372-3511 or via e-mail at [e-mail].