Ontario tomato processors cancel orders for spring

(Scott Bauer photo courtesy ARS/USDA)

Retaliating in a dispute with what they call a “growers’ cartel,” two of Ontario’s major commercial tomato processors say they won’t contract with tomato seedling producers for this spring’s crop.

Sun-Brite Foods and Highbury Canco, which describe themselves as two of the three biggest tomato processors in the province, said Wednesday their cutback in orders “will be felt first among seedling producers who normally receive contracts in February and early March.”

The processors, in a release from the Ontario Fruit and Vegetable Processors Association (OFVPA), said they won’t sign contracts “until the recommendations of the province’s independent Farm Products Marketing Commission are implemented.”

The commission in February had proposed to amend Regulation 440, which sets out the process for negotiations, establishment of negotiating agencies and appointments of representatives to said agencies for the marketing of vegetables for processing.

The commission said at the time it had met with vegetable processors and found those companies would rather negotiate “with their own active growers” of a given vegetable.

The commission proposed to take out 440’s provisions on establishing negotiating agencies and put in provisions establishing an industry advisory committee.

The commission’s plan would set out “minimum requirements for active growers of each processor to be participants of the negotiating agency for each vegetable.”

By comparison, the current rule allows Ontario Processing Vegetable Growers (OPVG) and the OFVPA to name up to 10 appointees to each negotiation agency.

OPVG, with support from the Ontario Federation of Agriculture, protested against the commission’s proposal.

The grower group said at the time its board doesn’t believe “changes to a democratic process should occur as a result of concerns expressed by processors or even by a relatively small number of growers.”

Provincial Agriculture Minister Jeff Leal stepped into the fray in August, telling the commission that “concerns have been raised about an apparent lack of both adequate and sufficient information and consultation with interested parties.”

Leal instead directed the commission to “develop a plan for engagement and consultation with interested parties and stakeholders concerning any proposed amendments to the regulatory framework for the vegetables-for-processing industry.”

The Farm Products Marketing Commission had said in February it planned to have its proposed changes in place for use by the industry when negotiating agreements for 2017’s processing vegetable crops.

“After years of thorough review, the commission recognized that the way that vegetables are marketed in Ontario needed to change,” Highbury Canco CEO Sam Diab said in Wednesday’s release. “This was not an easy decision.”

Talks with seedling producers have already wrapped up with no increase in price over the term of the contract, the processors said Wednesday. However, they added, individual processors “determine quantities and initiate orders.”

OFVPA president Karl Evans said the processor group has been “open with the minister, the commission and the growers that we will not negotiate 2017 contracts under the current predatory system. There are other processors who will be announcing their decision early in the new year.”

The tomato processors said Wednesday their action “is on top of the 100,000-ton cutback on tomatoes for processing announced last week.”

“Small growers are the victims of their own association’s cartel, and should hold their executive accountable for their economic losses,” Sun-Brite Foods CEO John Iacobelli said in Wednesday’s release.

“Millions of dollars in economic activity is now at risk as a result of the growers’ decision not to follow the commission’s recommendation.”

In a separate letter to Premier Kathleen Wynne on Wednesday, Evans urged her to “direct (Leal) to immediately implement the recommended changes to Regulation 440… we know you appreciate there cannot be further investment in the sector until the reforms recommended by your independent commission are implemented.” — AGCanada.com Network

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