Proposal to nix processing vegetable growers organization sparks outcry

Monday, July 11, 2016

by SUSAN MANN

The Ontario Farm Products Marketing Commission should hold a vote among growers on its proposal to rescind the Ontario Processing Vegetable Growers authority to negotiate minimum prices and sales terms, says a southwestern Ontario grower.

Last month, the commission posted a notice on the Ontario Regulatory Registry proposing to rescind the negotiating authority of the Ontario processing vegetable growers marketing board and add provisions to turn the board into an industry advisory committee. Comments are due August 12.

Commission chair Geri Kamenz couldn’t be reached for comment.

The proposal says “the commission is considering a number of options to enable the processing vegetable sector to remain viable and grow, including modernizing how prices between growers and processors are established or negotiated.”

The commission is also working to determine the roles of industry and the board in “moving to a free market system,” it says.

If approved, the proposal means the Ontario processing vegetable board could lose its authority to negotiate minimum prices and terms of sale for the 14 different crops with processors by next year.

And if the proposal proceeds, the commission intends to have the regulatory changes finalized by September. Implementation would be in time for the 2017 processing vegetable crop year.

Al Krueger, executive assistant for the Ontario Processing Vegetable Growers, says the proposal means every processor would negotiate prices and crop sales terms independently with each grower.

Processing vegetable grower John Lugtigheid, who has been on the processing vegetable board and on its negotiating committees for various crops for 20 years, says currently the board’s committees negotiate the minimum prices with processors for the various crops along with the terms and conditions of sale, such as rejection levels and payment procedures.

“That could be just as important as price,” he says of the latter negotiation points. “I thought the (current) system was working very well.”

As for the proposed changes, he adds, “the least we should have is a vote of producers to see if this is what the majority want.”

Lugtigheid says his dad told him in the 1930s and early 1940s (before the board was in place), growers faced periods of time when they weren’t paid properly along with instability in the marketplace.

He adds if the commission shifts the board to an advisory committee “it’s almost like having a board but not a board any more. It’s not going to do you much good.”

However, Lugtigheid says details on how the advisory committee will work are sketchy. If the growers’ advisory committee makes a recommendation to the processors on prices, are they required to accept that? he asks.

Reaction to the proposal was mixed. Krueger of the processing vegetable growers, says “We’re shocked.”

The main question the vegetable board wants answered is: Where did this idea come from? “We have received nothing from the commission other than the proposal (posted on the regulatory registry),” Krueger says.

Another question the board wants answered is: “What’s doing on down there (at the commission)? Who knows?”

Krueger says in the winter the commission proposed changes to the board’s negotiating committees to “ensure there was active grower participation. I’m not sure what they meant by that because all of our board directors (who are on the negotiating committees) are growers.”

In response to the commission’s request for comments, Krueger says they received nearly 200 responses in the board office (that were also submitted to the commission), overwhelmingly in favour of leaving the committee structure unchanged. The board also submitted comments calling on the commission to not make changes to the growers’ committee structure.

“It’s a system that works,” he says. “It’s not broken, don’t fix it.”

After the May 1 deadline for those submissions, the vegetable board didn’t receive anything from the commission, Krueger says. “Since that time, on June 28 we got notice of this (regulatory registry) posting, and that was it.”

Dan Hartung, president of Hartung Brothers Inc., says they haven’t had a lot of time to study the commission’s proposal yet because “it’s obviously a busy time of the year.”

However “I think it’s going to make the market a little more flexible and that would be positive. We’re going to work with our growers. We do that in the States, I’m sure we can do it in Canada.”

Hartung Brothers is a licensed green shipper that buys cucumbers from Ontario growers for processors in the United States.

Lugtigheid is also concerned about how the commission is handling the change.

“We do not know the full proposal. They (the commission) haven’t even told us what’s going to happen. We have no idea.”

He isn’t the only who is one concerned about the process for making changes. Al Mussell, owner of Guelph-based Agri-Food Economic Systems, released an independent agri-food policy note July 12 on the matter.

Agri-Food Economic Systems is an independent economic research organization dedicated to agriculture and food industry work.

In a telephone interview, he says the commission hasn’t provided information or analysis on the complicated market conditions for the various processing vegetable crops that may be driving the need for removing the vegetable board’s marketing authority. He listed example factors such as how demand and supply is changing, processors’ technological changes and what competitors are doing

“In studying whether an organization should have marketing board authority or not and what role a marketing board would play, you have to bring all these factors and analysis to bear,” he says. “I haven’t seen anything in that announcement on the regulatory registry or any supporting documents that provides that kind of analysis.”

The commission has the authority to make the proposed changes, he notes. However “have they provided analysis and an adequate forum for people to comment?”

Mussell adds that several years ago, the idea of establishing marketing board authority for Ontario Pork was discussed in the pork sector. At that time, a formal public hearing was held, research was done by the side in opposition to the proposal, and a tribunal of well-respected people was asked to make a recommendation based on what was heard in the public commenting.

“That’s the kind of thing I would expect in this situation. For the growers of processing vegetables, this is a big deal. It’s a really big deal,” he says.   

Sam Diab, president and CEO of Highbury Canco Corporation, Rob Anderson, vice president of operations for Bonduelle North America, and Francis Dobbelaar, chair of the Ontario Processing Vegetable Growers, all couldn’t be reached for comment. BF