'Mismanagement' by government cited in Gencor packing plant failure

Wednesday, April 2, 2008

by BETTER FARMING STAFF

Gencor Foods Inc (GFI) closed its doors at the end of March and announced its intention to file for an application for bankruptcy. Unspecified financial losses were cited, along with the failure to find a buyer for the distressed plant.

“Regulations enacted in the United States for Specified Risk Material (SRM) are much less rigorous than the regulations established in Canada,” a Gencor press release stated.

An enhanced feed ban came into place in July of last year. When the Americans opened their border to over 30 month old cattle last November, American plants buying cows in Ontario had “at least a $39 per cow cost advantage” over plants like GFI, Stewart said.

Gencor Foods Inc was formed in 2004 to reopen the former MGI plant in Kitchener.

“I’m really disheartened by the loss of cull cow capacity in the province,” Stewart told Better Farming. Gencor was “built up with substantial investment from the provincial government and producers.”

“Governments have to get serious about addressing the regulatory inequalities,” Stewart said. “We are trying to have an integrated market here in North America … There isn’t any adequate compensation for the changes in regulations,” and it is driving processors and producers out of business.”

Gencor cited a “one time” payment from the province to deal with the SRM issue as providing some relief. The province did provide packing plants with money in January, says Kelly Synnott, advisor to provincial agriculture minister Leona Dombrowsky.

SRM regulations are federal, says Brent Ross, spokesman for the ministry. The province won’t reveal the amount of support it gave to Gencor. It is “proprietary business information.”

Agriculture and Agri-Food Canada did not comment in time for Better Farming’s deadline. BF