Bean board member resigned over opposition to merger

Thursday, October 11, 2012

by BETTER FARMING STAFF

A former board member of the Ontario Bean Producers’ Marketing Board says he resigned over the organization’s decision to step away from a merger with the Ontario Coloured Bean Growers’ Association.

Steve Twynstra was the only board member of nine to vote in favour of continuing the merger after it was learned that the Ontario Farm Products Marketing Commission would not allow the board to carry its regulating powers into the new organization.

“I thought about it long and hard,” Twynstra said Thursday of his decision to resign. “I think this is all about the future of the white bean industry in Ontario.”  

In September, as the organizations finalized their merger proposal, they learned that the marketing commission would dramatically restrict the new organization’s ability to set dryer and grading charges. These are costs the dealers charge growers and, currently, only the white bean producers can regulate these. The commission will allow the new organization to set the charges only for its bean marketing pool — which the two current groups anticipate will attract only a tiny percentage of growers as most growers now grow under contracts.

Twynstra says that the white bean producers board called an emergency meeting in September to discuss the issue and voted to drop the merger. He says he handed in his resignation on Sept. 27, a week later.

The commission has decided to go ahead with a producer vote on the merger plan. Voting packages are arriving in producers’ mailboxes this week and growers will have until Oct. 26 to vote and mail their ballot. According to the commission's website, growers who produced a crop in 2010, 2011 or 2012 are eligible to vote.

Dave Woods, chairman of the coloured bean growers association, says the commission’s decision came as a surprise. Both he and Grant Jones, chairman of the white bean producers, say the change was in response to concerns raised by the industry’s dealers.

Woods says coloured bean producers had looked forward to being able to negotiate those costs and, in that respect, the negotiation with the commission did not go as efficiently as it could have. However, it’s important to move on, he adds, and create an environment in which all industry players can work together to seize new opportunities. “We need to have everybody getting along,” he says. “It’s a small industry and it’s getting smaller and if we start fighting and squabbling, it weakens it further. We cannot afford that.”

Woods notes that high corn and soybean prices in recent years have lured many growers away from growing edible beans. If it’s perceived that there’s internal strife within the industry, “people will just walk away from it.”

Both groups acknowledge that the merger would create savings by reducing overlaps. The total number of board positions of the two current organizations, for example, is 15 and the merger proposes a board of seven directors.

It will also alleviate financial challenges for coloured bean growers, whose association has operated under a small deficit for the past two years. The merger proposal calls for raising the checkoff fee for coloured beans to $6.60 per tonne from its current of $5, Woods explains. The association had planned to ask for the increase regardless of whether the merger takes place, he adds.

Jones says the white bean board is “in great shape” financially. The merger proposal calls for any extra money the board has to be applied to white bean research. It also proposes reducing the white bean checkoff to $6.60 per tonne from its current of $8.80. As well, growers will be allowed to market their beans outside of the province, something the white bean board currently prohibits.

Losing the ability to regulate grading and drying costs for contracts “was the only deterrent,” Jones says.

He notes that the current schedule for these costs was introduced about two or three years ago and uses a formula based on the dealers’ average power and labour costs. Little negotiation has taken place since the formula was introduced, he says.

Twynstra says the board requiring all growers to foot the costs of the pool, which marketed a tiny proportion of the beans produced, was a sticking point for him and he’s pleased to see that the new proposal calls for pool participants to share the costs of running the pool.

The Middlesex County farmer is a former bean dealer and also grows coloured beans. He says other board members accused him of being biased towards dealers’ perspectives. “I think that was disingenuous of them to suggest once a dealer, always a dealer,” he says.

In a letter to the editor, he states that the board’s current structure “has led to a rather acrimonious relationship between the board and its dealer network . . . Sometimes losing sight of its end goal.”

A new, merged organization, he writes, would “provide the ‘reset’ needed to develop true synergies focused on improving our relationship with our domestic funding partners and our foreign end-users by giving them confidence that we truly are committed to working together along the value chain.”

Jones says he’s sorry to see Twynstra go and has appreciated the views the former board member brought to the table. He agrees that there has been a history of acrimonious relations between white bean growers and dealers and says the board believes the dealers and the commission are responsible for the current situation. BF