Aylmer Meats sues feds

Aylmer Meat Packers Ltd. is suing the federal government over the seizure of beef at its plant in 2003.

Owner Richard (Butch) Claire pleaded guilty to charges laid after a raid at his plant on Aug. 21, 2003, identified deadstock being processed for sale to the public.

They also seized packaging with a federal stamp of approval from the defunct MGI Packers plant in Kitchener that Claire had purchased.

In its lawsuit, Aylmer Meats says the Canadian Food Inspection Agency took meat that was suitable for sale and failed to properly store it so it spoiled to the point that it could not even be used as pet food.

The federal government tried this summer to simply sweep the lawsuit away, but Justice Sandra Chapnik ruled that there are a number of allegations that need to be examined in a trial.

She did throw out a complaint that the CFIA and Ontario Ministry of Natural Resources enforcers trespassed on the plant. She ruled that they had the necessary authority under provincial meat inspection regulations to raid the premises and to detain some meat.

What’s open to trial is how much meat they could detain and whether they had an obligation to provide better handling and storage so it would not lose its retail value.

In her decision, Chapnik wrote “these allegations raise conflicts to the evidence which require assessments of credibility and are genuine issues requiring a trial.”

So far no date has been set for that trial.

Cheese regulations stand

Canada’s cheese standards have withstood corporate court challenges by Saputo and Kraft.

The Supreme Court of Canada has declined to hear an appeal the companies filed.

They previously lost lower-court challenges to the changes to regulations made in 2007 to set a limit on the use of milk solids instead of whole milk in cheese production.

The standards apply to both domestic and imported cheeses. Canadian dairy farmers lobbied the federal government to enact the regulation because their market was being eroded by imports of milk components that escape the high tariffs that enable Canadian farmers to enjoy the highest milk prices in the Western world.

                                   

Another chicken appeal

Chicken Farmers of Ontario has been hit with yet another appeal to the Ontario Agiculture, Food and Rural Affairs Tribunal.

This time its Juan Feddes of Dundas appealing a chicken-board penalty against his 1046980 Ontario Ltd., better known as Primavera Farms Ltd.

The public hearing at 1 Stone Road, Guelph, is set for Feb. 15.

The tribunal has scheduled two other appeals against the chicken board, both of them from small-scale processors. 

Dairy defence flawed

I got an e-mail today from a defender of supply management for the dairy industry.

He said "with all of the coverage about our supply management system and its potential impact on Canada’s ability to join the Trans-Pacific Partnership, some recurring myths are cropping up again. For example:

1.       Canadians pay more for milk and dairy products than residents of other countries. Not true. For example United States Department of Agriculture reports American cheddar cheese costs US $5.70 per pound or $12.54 per kilogram. The average national price for a kilogram of cheddar in Canada is $13.70 Canadian. In Canada, dairy farmers receive no government subsidies.

Trouble is, it is true. Anybody who has shopped in U.S. supermarkets, as I have from New York to Florida, Texas, Alabama, Tennessee and Louisianna, knows milk and dairy products cost more in Canada.

2.      Canadian dairy farmers are subsidized. Not true. Canadian dairy farmers receive no government subsidies. American dairy farmers received $4 billion in subsidies last year, almost equal to the retail price of milk. Americans pay twice for their milk, once in the stores and second time, through their taxes.

Trouble is, it is true. Dairy farmers take advantage of many farm subsidies, ranging from crop insurance to cash accounting for income tax purposes, from traceability to environmental programs.

3.      Competition and open markets will result in better prices for consumers and farmers. Not true. It isn’t working anywhere in the world.

Just saying it isn't true doesn't mean it is not true. In fact, many studies indicate that Canadians enjoy stiffer retail competition and lower markups on food than Europeans and Americans. What makes you think this competition would mysteriously end if the farm-gate prices for milk decline?

4.      The price of dairy products in Canada is high. In fact, since supply management was introduced 40 years ago, the price of milk and dairy products has risen less than the CPI.

The price of dairy products in Canada is high. That's the result of tariffs of close to 300 per cent. And if you want to use the Consumer Price Index as a measure, why not start with the date when Canada switched from reliance on Article 11 of the old GATT to tariffs? Since then, the price farmers charge for milk has increased much more than the CPI. In fact, isn't that why dairy farmers in Ontario want to de-link their fluid milk pricing from the current level of reliance on the CPI: they want prices to go up faster and more.

University of Waterloo Professor Bruce Muirhead, who is part of a global team now conducting research funded by the Norwegian government on agricultural practices, says Canada’s supply management system is the envy of both governments and farmers in jurisdictions around the world.

Muirhead is not an agricultural economist, and he fared poorly in last evening's panel discussion on supply management on TV Ontario. He was much less knowledgeable and credible than Larry Martin, who is a highly-respected agricultural economist.

Pigeon King in court

A court date for Arlan Galbraith, the Pigeon King, was much ado about nothing in provincial court in Kitchener today.

His lawyer, R.P. Williams, asked to have the case delayed to Dec. 28, but nothing more is likely to happen then, either, because it's scheduled for a tiny room barely large enough for four lawyers.

Waterloo Region police have laid charges against Galbraith for misleading investors with whom he signed contracts that proved to be worthless when Galbraith put the company into bankruptcy.

Williams told the court there have been several pre-trail meetings with the crown attorney and more are scheduled.

Maple Lodge expands

Maple Lodge Farms Ltd. has purchased the chicken-slaughering operations of Grand River Foods Inc.

The sale is due to close Dec. 1.

Grand River says it will use the proceeds to invest in its further-processing business. That division operates form a large new plant in Cambridge that was recently expanded. Its chicken will come from Maple Lodge.

The Chicken Farmers of Ontario marketing board has approved transfer of plant supply quota from Grand River to Maple Lodge.

Until this deal, Maple Lodge was second to Maple Leaf Farms Ltd. in the chicken-slaughter business in Ontario.

Saputo and the Mafia

A new book, Mafia Inc., has some interesting information about links between the Saputos and the Bonnano family of New York.

The Saputos deny the connection.

Here's what I found in the book:

Sensing an all-out war was near, Bonanno decided to drop out of sight for a while and travel. In his autobiography, he tells of how a businessman, John DiBella, persuaded him to partner in the Grande Cheese Company of Fond du Lac, Wisconsin. “The cheese plant had been the source of contention between rival groups in Chicago,” he wrote. “These people played rough, and fighting broke out.” DiBella had sought and obtained Bonanno’s protection. Bonanno continues”

“When my business associate John DiBella of the Grande Cheese Co. found out about my upcoming travels, he asked me to make Montreal my first stop. Mr. DiBella had a close friend from his hometown in Sicily, Joseph Saputo, who was also in the cheese business. Because of immigration quotas, Mr. Saputo and his family hadn’t been able to enter the United States. As the next best thing, Mr. Saputo immigrated to Montreal, Canada, where he established the Saputo Cheese Co. He was now looking for investors to expand operations.

Fay (Bonanno’s wife) and I went to Canada, expecting to be there but a short time.

At the cheese plant, Mr. Saputo and I agreed to a deal. Mr. Saputo signed a letter of intent, stating that once I made payment, I would own twenty per cent of the business.”

---There follows an explanation of how notorious Bonanno had become in the U.S. ---

“Canadian immigration officers, understandably curious as to what he was doing in the country and what business he had in Montreal, decided to ask him a few questions. Bonanno went to meet them at the appointed hour and place.

“I repeated my intentions of investing in a Canadian business for the purpose of expanding a cheese plant and hiring people. I was helping Canada reduce unemployment. To back up my statement, I brought the letter of intent signed by Joseph Saputo.”

Instead of being granted the permanent resident status he had applied for, the Genovese family boss was arrested on the spot. Canadian immigration argued that he had neglected to mention that he had a criminal record in the United States:a Brooklyn garment factory that he co-owned had been charged with violating minimum-wage statutes. Bonanno continues:

“I didn’t want to be deported. If Canada deported me as a persona non grata, I would lose my rights to invest in the Saputo Cheese Co. Also, now that it was obvious the United States was behind my predicament, I knew that once I was deported back to the United States, the FBI would be waiting for me. “

Bonanno was immediately incarcerated at Bordeaux Prison in Montreal. It was his first time behind bars.

--- and some more stuff of little interest, then this quote from Bonanno’s autobiography:

“For its part, Canada would release me from prison and wouldn’t deport me. However, once released from prison, I had to leave Canada voluntarily and return to the United States.”

--more background stuff  and then the book continues:

Giuseppe (Joseph) Saputo was born in 1905 in Montelepre, a town some thirty kilometers from Castellemmarre del Golfo, birthplace of Joe Bonanno. The Saputo family has always mainained that they were unaware of Bonanno’s Mafia involvement and were only acquainted with his business partner John DiBella of the Grande Cheese Company. Their denials continue to this day.

---more stuff of little interest and then a quote from Le Devoir, a Montreal newspaper, from a trial in Montreal:

During his lengthy testimony, Mr. Cotroni admitted that he knew, in some cases intimately, several individuals publicly named by various commissions of inquiry and police forces, including the FBI and the RCMP, as members of La Cosa Nostra. He explained that in 1966, at the home of a friend, Giuseppe Saputo – owners of the Saputo and Figli Ltd. cheese plant in Saint-Michel – he had met with a group of New Yorkers.”

That group comprised Salvatore (Bill) Bonanno and his associates: Vito De Filippo and his son Patrick, Peter Magaddino, Peter Notaro and Carlo Simari.

And later the book continues to say police surveillance followed five of the people from the meeting and then:

The quintet headed for a pay phone. Couture (the cop) saw Cotroni, Violi, Giuseppe Saputo and Joe Bonanno speak on the phone in turn. The officer asked for backup; there were too many cars to follow. He was told to stick with Saputo who then drove to his company’s head office in Saint-Michael. “In the parking lot there were two vehicles whose licence plates indicated they were registered to Magaddino and Notaro,” Couture later recalled in an interview.

That evening, after they arrested Salvatore Bonanno and his six companions, the police questioned them intensively. They asked what Bonnano was doing in Montreal. He replied that he was there to look after his father’s interests in the Saputo cheese company.”

Bonnano and his party, except for Luigi Greco, were detained for two days before being taken to the airport and deported to the United States.

The book then goes into a treacherous gun-fight between Bonanno and DiGregorio factions. A footnote at the end of the chapter says:

The car driven by Salvatore Bonanno on Nov. 28, 1966, belonged to Giuseppi Monticello, Giuseppi Saputo’s son-in-law. Around the same time, Monticello was sponsoring his brother’s immigration to Canada. Later, when a Canadian immigration officer asked him why he had lent his car to Bonanno, he answered, “Because he has a stake in the Saputo company.”

The book is Mafia Inc, written by André Cédilot and André Noel and translated by Michael Gilson, published by Random House Canada, and just released in English.

WTO victory

The almighty United States has once again been judged guilty of harassing Canadian livestock producers by breaking the rules of trade treaties it has signed.

The World Trade Organization ruled today that the U.S. broke its world trade rules by imposing requirements on Canadian cattle and hogs that it does not require for its own producers.

What remains to be seen is whether, when and how the U.S. will change its Country of Origin Labelling (COOL) requirements so Canadians are restored to a level playing field in the U.S. market.

In previous trade actions, the U.S. has imposed countervailing duties that were subsequently ruled out of bounds.

In all of these cases, it takes so long to get a ruling that the damage has been done, including bankruptcies for Canadian farmers.

It's not fair. And it's darn frustrating. And there are no realistic remedies available.

Egg board chair quitting

Carolynne Griffiths, chair of the Egg Farmers of Ontario marketing board, has announced that she will not be seeking re-election in January.

She made the announcement to the board of directors and to a workshop of committeemen this week.

She has been chair for eight years and also heavily involved in a united effort by Canada’s supply-management marketing boards to preserve protection during World Trade Organization negotiations.

She has also been involved in controversy in the current lawsuits by Sweda Farms Ltd. against the egg board, L.H. Gray and Son Ltd. and Burnbrae Farms.

Some of the statements of claim say she has had inappropriately close relationships with Bill Gray, owner of L.H. Gray and Sons Ltd.

If is clear from e-mail exchanges between her and Gray that she was a guest at dinner and followed up with a note of appreciation.

Building community

My wife, Barb, and I have been volunteering with Disaster Response Services of the Christian Reformed World Relief Committee for a number of years.

This summer I spent two hot weeks in August in Alabama, trying to help some of the people who were hit by about 120 tornadoes this spring.

One community was Cardova, hit by an F-3 tornado in the morning, then an F-4 that evening. The downtown is gone, including city hall, the fire department and a supermarket.

While there, I met Angela Pate, a remarkable volunteer. She set her law practice aside to help her neighbours, starting right after the first storm by helping her husband cut away trees blocking the highway, then the next morning by deciding the hungry, distraught people she saw gathered on a knoll needed food, clothing and shelter.

The storm wiped out electricity which meant nobody was willing to risk driving anywhere because gas station pumps were not working. Nor were restaurants open.

So she gathered wieners from her freezer and headed for the downtown. She needed a large barbecue and spotted one in a yard.The owner, a black man, agreed she could use it and then he volunteered to help her.

The result was a first for that community, a black person working beside a white woman to serve hot dogs.

From that grew an organized response to the disaster, all spearheaded by this remarkable Angela Pate.
She persuaded seven owners of vacant homes to provide them rent-free for a year in return for having volunteers repair them. She calls that project Flipping for Families, which is on the T-shirt she's holding.

She persuaded a church to open its facilities to become command centre and a kitchen and dining room for local victims and for volunteers coming into the community.

Angela told me the storm, bad as it was, has brought healing and hope to the community. Everybody is now pulling together, including two Baptist churches that been divided, one for relatively wealthy and well-educated residents on the top of the hill, the other for "common folk" at the bottom of the hill.
It was, ironically, the one at the bottom of the hill that immediately opened its doors to Angela Pate, no questions asked, no demands made. The other church, her church on the hill, hesitated because it wanted a meeting of its council to decide and Angela wasn't waiting. It has since become an enthusiastic partner, providing money and volunteers, including its youth group.

She envisions a rejuvenated community that will have a new downtown to complement its high-reputation high school and medical clinic. The local expressway was extended two years ago and now is five minutes from Cardova, so she thinks many commuters will come to enjoy affordable housing in a community-minded rural setting.

Angela Pate impressed me. So do many other community-minded people I have had the good fortune to meet.

APEC news

The Globe and Mail has put the Asia-Pacific trade-negotiation threat to supply management on the top of its front page today.

And apparently many of the supply-management marketing boards and national agencies are in near-panic mode today, calling emergency meetings to try to orchestrate their public response and lobbying.

What's all the fuss about? Supply management has been on the table at the World Trade Organization negotiations for 10 years. And it's on the table in the negotiations with Europe.

The fuss is this: supply management is going to get its wings clipped. All that remains to be determined is by how much.

The World Trade Organization is the way we ought to go, and for two very important reasons. One is that this round of WTO negotiations aims to help the poorest people of the world with trade concessions which would be far more important than all the aid governments currently provide. Another is that almost everybody is in the WTO negotiations and there's less chance for the economic bullies to prevail.

But Canada's supply-management marketing boards have been lobbying intensely to keep the WTO  negotiations from forcing them to make one iota of concession. Something that I suppose Canadians can feel proud about, eh? Beggar the beggars to sustain the millionaires.

APEC talks

Prime Minister Stephen Harper and U.S. President Barrack Obama have apparently agreed that Canada should join the Asia-Pacific trade talks.

So far the countries negotiating that agreement have kept Canada out because our politicians have pledged support for supply management for our dairy and poultry farmers.

I wonder whether Canada's politicians may be having second thoughts, given the revelations that have been emerging from the egg-industry lawsuits. And the chicken industry issues in New Brunswick, Quebec and Ontario.

In any case, this most certainly involves potential oil exports to Asia, and a controversy-plagued supply management system could simply end up as broken eggs. Or cracks in the packs.

Old defences

The defences outlined in the articles below are prior to the new statement of claim filed by Svante Lind and his  companies. The new claim outlines allegations of conspiracy among the three, and Justice Peter Lauwers agreed that there is enough evidence to approve the request Lind's lawyers made to join the cases.

The three have not yet filed defences to the new claims.

Occupy movement

How about an Occupy movement for the egg industry - the 99 per cent against the two one percenters who dominate the ownership of farms, grading stations and processing plants?

Burnbrae and Gray defences

Documents filed in the Ontario Court of Appeal outline the defences that Burnbrae Farms Ltd. and L.H. Gray and Son Ltd. and key employees have filed in response to lawsuits by Svante Lind and his companies, such as Sweda Farms Ltd.

Gray denies that he bribed Johannes Klei to poison Best Choice Egg's relationships with farmers and customers. He says that he refused to do business with Klei until he had left the employ of Best Choice Eggs and then he engaged him only as a broker paid on a commission basis, not as an employee.

Gray says he never got a customer list from Burnbrae which obtained the information under a confidentiality agreement while Burnbrae was negotiating to buy Best Choice Eggs. Gray also says Lind was fully aware of when Gray joined Burnbrae to make it a joint negotiation to buy Best Choice Eggs.

The deal never closed. Burnbrae's lawyers note that for two years, Lind didn't ask for a return of the confidential information.

Burnbrae says in its statement of defence that Lind has "a reputation in the egg business of being unreasonable, cantakerous, unpredictable and hard to deal with." and says "they are litigious and have had numerous disputes with other parties . . . in the egg business."

Burnbrae says the lawsuits are an "abuse of the courts" because "the allegations are groundless" and motivated by a desire to hurt Burnbrae's business.

Lind's lawsuits seek $30 million each from Burnbrae and L.H. Gray and Son Ltd.

None of the allegations nor the defences have been proven in court.

The egg board defence

A statement of defence filed as an exhibit in the Ontario Court of Appeal outlines the Egg Farmers of Ontario marketing board defence against lawsuits filed by Sweda Farms Ltd.

The statement of claim filed by Sweda alleges that general manager Harry Pelissero acted beyond the egg board's jurisdiction because it's the Canadian Food Inspection Agency that is responsible for policing the grading of eggs.  Lawyer Geoffrey Spurr, acting for the egg board, says he doesn't know that Sweda Farms is a federally-licenced egg-grading business.

Best Choice Eggs is. Both it and Sweda Farms are owned by Svante Lind.

The lawsuit alleges that Pelissero acted to collect marketing board levies from Sweda and other producers without authority from the board of directors. Spurr replies that Pelissero and then-inspector Mark Beaven were acting within board authority and the board of directors was kept informed "such as was required."

The egg board says it began investigating Best Choice's grading statements and payments to farmers because farmers indicated they had concerns, not that it was a conspiracy among L.H. Gray and Son Ltd., Burnbrae Farms Ltd. and the egg board to hassle Best Choice's suppliers. The egg board says Beaven checked the records of all 430 egg board members and invoiced 44 of them for unpaid levies, among them 15 Best Choice suppliers.

The board says in its defence that 30 of those invoices were cancelled after farmers provided valid explanations, two were paid in full, one was paid after the amount owing was reduced, later four more were cancelled and eight were left outstanding. One of them was an invoice for $44,470.49 against Sweda Farms.

The egg board denies it threatened to cancel quotas if the invoices were not paid.

The egg board says it was Lind's own fault that he could not get enough eggs because he didn't renew contracts with farmers or pursue contracts with other farmers. And it says it acted properly in supplying eggs to Lind, either with Ontario-produced eggs or handling paperwork for imports when Lind couldn't get enough to satisfy his customers.

The board also notes that Lind sold Sweda Farms quota that could have supplied him with 39,000 dozen per week. It says that when he sold the quota, he did not require the buyer to sell eggs to nobody but Best Choice.

The egg board says Pelissero responded to all of Lind's requests for eggs other than those that he deemed "unreasonable or unrealistic requirements."

The lawsuit seeks a total of $33 million from Pelissero and $33 million from the egg board.

None of the allegations or defences have been proven in court.

Burt gets a raw deal

I sympathize with Max Burt of Manitoulin Island in his pursuit of approvals to produce chicken for his processing plant and local customers.

The Chicken Farmers of Ontario marketing board refuses to cut him any slack.

He appealed, and now the Ontario Agriculture, Food and Rural Affairs Tribunal has also refused to come to his aid.

This is how supply management becomes an idol that crushes people.

Burt has argued that his father was a chicken producer and qualified for quota, but didn't know he needed to apply. The chicken board didn't advertise its intentions to the people of Manitoulin Island.

Burt argued that, likewise, the chicken board did not inform Manitoulin Island people about a lottery it set up to grant quota to new producers.

And the chicken board refuses to grant him an exemption so he can produce chicken and process chicken for the local market, yet this same chicken board is granting exemptions for 300 birds each per year to about 14,000 people in Southern Ontario.

The chicken board and the tribunal both ruled that if Burt wants to pursue his dream of producing chicken for his processing plant, he will need to buy quota - at $100 to $105 per unit. And the chicken board sets a minimum of 14,000 units, which means an investment of $1.4 to $1.47 million.

And he would need to buy that quota from one or several of the existing members of the chicken marketing board. There are about 1,000 of them, and at current quota prices, they're all millionaires and multi-millionaires.

So we have a system in place in Ontario that features an exclusive club of government-supported millionaires refusing to cut any slack for an enterprising, hard-working farmer on remote Manitoulin Island trying to serve a local market.


And these millionaires beg and plead and bully politicians to defend their system from any concessions in world trade talks designed to benefit some of the poorest farmers in the poorest nations on earth.

Crazy, eh?

New egg case claims

A revised statement of claim Sweda Farms and Best Choice Eggs has filed includes many allegations of conspiracy among Harry Pelissero, general manager of the Egg Farmers of Ontario marketing board, L.H. Gray and Son Ltd. and Burnbrae Farms Ltd.

Some of the allegations are that they:

• -       Misled the federal government about the lack of certain types of eggs so they could thwart Sweda Farms’ applications for supplementary import permits.
• 
  
• -       Falsified the grades, sizes and quality specifications for eggs they supplied to Sweda Farms.
• 
  
• -       Spread false rumours among Sweda’s farmers, trying to get them to switch their business to Gray and Burnbrae and to leave Sweda short of eggs to supply its clients.
• 
  
• -       Pretended to bid to buy Sweda Farms’ egg-grading and retail businesses, but really were only interested in learning about the company’s finances, suppliers and customers.
• 
  
• -       Bribed the late Johannes Klei, a Sweda Farms employee, to have him spread information among farmers and customers that would drive Sweda Farms out of business.
• 
  
• -       Burnbrae Farms , when it was negotiating to buy Sweda, broke a confidentiality agreement by providing information to L.H. Gray and Son Ltd. For another example, Pelissero of Egg Farmers of Ontario shared lawsuit information that the board was threatening to cancel Sweda Farms’ quota.
• 
  
• -       Burnbrae and Gray shared information about pricing and clients.
• 
  
• -       Conspired to reduce the premiums offered to farmers for Grade A Extra Large eggs.    
•          
• -   Tried to besmirch Sweda’s reputation with Eggland’s Best, a potential supplier of specialty eggs, and with Hartmans Canada Inc., supplier of egg cartons.
• 
  

Gray and the egg board deny any wrongdoing.  Sweda’s allegations have yet to be tested in court.

Many of the new allegations arise from information provided by Norman Bourdeau, fired by Gray from his position as manager of Information Technology.

The lawsuit alleges that Gray made more than $150 million profits from illegally selling undergrades as Grade A eggs and used some of those profits to pay millions to the big chain stores to gain exclusive supplier status and also to pay farmers to switch to Gray. It names Loblaws, Sobeys, Metro, Wal-Mart, Costco and Longo’s as examples.

For example, the electronic files Bourdeau took from Gray and provided Sweda Farms indicate that:

• 
  
• -      Gray paid Klei $118,842.24 on Dec. 18, 2008 and ordered another cheque for $5,000 dated Dec. 24. The lawsuit alleges that Klei promised to spread information that would wreck Sweda Farms so Burnbrae and Gray would gain a monopoly.
• 
  
• -      Bill Gray, owner of L.H. Gray and Son Ltd., and his employees exchanged e-mails about how they were adjusting an automatic egg-grading machine and failing to report accurate grade information to farmers, the egg board and customers.
• 
  
• -      Pelissero and Gray conspired to put the wrong size eggs into shipments to Sweda Farms.
• 
  
• -      A Nov. 9, 2009, grading report, provided as an example of cheating on grades, shows Gray’s automatic grading machine registering 1.91 per cent cracks, but the cartons marked Grade A contained 7.58 per cent cracks. The total for utility grade was 3.28 per cent according to the automatic grading machine, but in reality was 9.77 per cent.
• 
  
• -      Bill Gray e-mailed an employee, asking why the CIP (cracks-in-pack, i.e. in retail-ready cartons marked Grade A) percentage was so low.

The allegations also say when the egg board accused Sweda and its farmers of the egg board on the percentage of Grade A eggs, and therefore levies, it sent letters and made visits, but two weeks later, when it made similar allegations about others, it neither visited them nor named a grading station and then cancelled those charges.

When the letters went out to Sweda’s suppliers, and the egg board officials were visiting them, staff from Burnbrae Farms and L.H. Gray and Son Ltd. began soliciting 14 of those producers for their business, Burnbrae east of Toronto, Gray west of Toronto.

The lawsuit also alleges Pelissero acted on his own, without authorization from the board of directors, to accuse Sweda and the farmers shorting the egg board on levies.

The lawsuit says Pelissero and the egg board have no jurisdiction over egg grading – that’s policed by the Canadian Food Inspection Agency – so Pelissero was acting beyond his authority and on his own. That’s one of the reasons why the lawsuit names Pelissero personally as well as the egg board.

Previous statements of claim named Mark Beaven of the egg board; this new statement has dropped him.

There is an allegation that on Jan. 8, 2009, Bill Gray ordered Bourdeau “to destroy all electronic data and information from the business records of L.H. Gray which were relevant to the litigation involving the plaintiff (Sweda Farms)”.

                           

        

        

Dairy policies are ridiculous

After sitting through a day-long hearing at the appeals tribunal today, I am more convinced than ever that supply management is a cumbersome, inflexible system that frustrates innovation and market development in the dairy industry.

At issue was a decision by the Ontario Ministry of Agriculture, Food and Rural Affairs to grant a permit to Azad Damani, owner of Esskay Dairy Ltd., to renovate an old milk-processing plant at Millbank so he can produce a highly-successful yogourt drink being made in Europe.

His proposal is modest - only about 400,000 litres a year, which is 0.06 per cent of the industrial milk supply in Ontario - and he said it will generate about 15 to 20 jobs, will satisfy the desire for local products and the demand for liquid yogourt called Lasi.

The Ontario Dairy Council, which represents most of the processors in the province, including multi-national giants such as Parmalat and Saputo, said this is not fair because it will reduce the volume of milk available to existing processors.

And Tom Kane, president of the Ontario Dairy Council, emphasized that Ontario's dairy farmers, because they operate within a national supply-management system, cannot increase milk production to supply this new business.

There were dozens of details to the appeal tribunal hearing, including references to special programs for companies that want to try producing new products, but the bottom line is that the Ontario Dairy Council opposes this plant proposal.

Incidentally, this yogourt drink will be made from a blend of milk from cows, goats and sheep. There is no supply management for goat milk or sheep milk. In fact, there are no controls whatsoever on sheep milk, not even quality and food safety regulations.

Supply management as it's being run in this nation is a recipe for disaster. I'm glad I haven't got a cent invested in the business.

Processing egg dispute under negotiation

At the urging of Laurent Pellerin, chairman of the Farm Products Council of Canada, the Egg Farmers of Canada and the Canadian Poultry and Egg Processors Council have met three times and more negotiations are scheduled to try to reach a new agreement on the handling of eggs for processing.

The egg farmers want better prices so they can limit the amount they need to pay to cover the price difference between the table and processing market.

They also want to limit quantities which have been steadily increasing.

Pellerin said that he wants the two sides to try hard to come to an agreement but, if they can't, he wants them to narrow down their differences and then clearly define them.

At that point, he said he will strike a committee to hear an appeal that was filed by the processors in objection to the terms the egg agency has proposed. Those hearings will lead to a council decision on how to deal with the issues.

Pellerin said the marketplace has changed a lot since the agreement that has been in place began. For example, he said there is much greater demand now for special markets, such as Tim Horton's, and for high-value ingredients that are extracted from eggs.

Chicken deadline looms

The Régis in Quebec has given the province's chicken board and processors until the end of the month to come up with a deal that satisfies them all.

If not, the Régis has said it will impose an agreement, including the thorny issue of setting supplies for each processing plant.

The Quebec marketing board and processors need the Régis' approval to implement a deal with Ontario's marketing board and processors to stop inter-provincial trade in live chickens.

The sticking point in both provinces is concerns raised by small-volume processors who fear the big guys won't let them get enough chickens to satisfy demand.

Meanwhile, the Quebec marketing board has filed for leave to appeal a Quebec court decision that threw out a temporary moratorium that both the Ontario and Quebec marketing boards imposed on their producers, refusing them the right to sign new contracts with out-of-province processors.

Egg ads win more awards

Egg Farmers of Ontario (EFO) has won three 'Best of CAMA' awards and two 'Certificates of Merit' for its "Who Made Your Eggs Today?" campaign.

The awards were announced during the Canadian Agri-Marketing Association banquet recently at Banff Alberta.

In February the ads won two Golden Arc awards at the Agricultural Relations Council meeting in Florida.

"The response to our 'Who Made Your Eggs Today?' campaign has been tremendous," said egg board chair Carolynne Griffith. "We are honoured to be recognized for a campaign that we are so proud of."

The ads feature egg producers, but never show hens or the inside of their barns.

EFO won for its radio ad series, billboards and transit ads while receiving the 'Certificate of Merit' for video and integrated marketing campaign.

At the centre of the multimedia campaign is the web site www.eggfarmersofontario.ca to help Ontario consumers get to know their local egg farmers. The campaign was inspired by consumer research showing that Ontario consumers are curious about the egg farmers who produce one of Ontario's favourite foods.

"I would like to thank our staff and agency partners for their hard work, passion and insight," said egg board general manager Harry Pelissero. "And of course none of this would have been possible without the egg farm families who so graciously agreed to be our spokespeople. Their stories are what make this campaign a success."

Caging hens is a hot-button issue that the ad campaign sidesteps. At the egg board’s annual meeting, staff told farmers that upcoming ad campaigns will gradually introduce hens and eventually will show caged hens. The aim is to win public support for egg farmers and gradually introduce them to the way they manage their flocks.

Egg Farmers of Ontario has about members who own egg and pullet quota. They practice supply management to achieve highly-profitable prices just low enough to keep imports out of the market. Imports face a tariff of 168 per cent.

Farm in U.S. under fire

Two scholars say one of the U.S. farm subsidy programs is a “federal budget nightmare” and threatens to land the U.S. in World Trade Organization disputes it will not win.

Vincent H. Smith of the American Enterprise Institute and Barry H. Gordon of North Carolina State University say the Average Crop Revenue (ACRE) program introduced in 2008 could cost $10 billion some years and an average of $6 billion a year.

It benefits mainly corn, soybean and wheat producers and is designed to provide subsidies when market prices decline. It is, in other words, a lot like Ontario's new risk management programs for grains, oilseeds and livestock.

Smith and Gordon say the price support feature means it violates the commitment the U.S. and other countries made when they signed on to the current World Trade Organization deal that is currently in force. There is a promise in that deal to not introduce any new program that is tied to current prices or production levels.

Smith and Gordon say that the cotton case which the U.S. lost shows what is likely to happen if and when world grain prices decline and other countries start blaming the U.S. subsidy programs.

The World Trade Organization ruled that U.S. cotton subsidies did violate the rules and ordered it to either stop the subsidies or face penalties. The U.S. bought off Brazil in “an Alice in Wonderland” deal to pay $147 million a year to help Brazil’s cotton farmers become more competitive.

Ontario’s new risk protection program includes a price-support formula that tracks the cost of production.

The concern the World Trade agreement sought to address is that subsidies encourage farmers to keep producing when markets have so much that prices are depressed below the cost of production. This is of particular concern to poor nations that cannot afford to subsidize production when world prices fall below the cost of production.

Federal Agriculture Minister Gerry Ritz has refused to put any federal money into Ontario’s new risk management program, citing the risk of trade sanctions as his reason.

The government of Dalton McGuinty in Ontario seems determined to set up subsidies and trade barriers that invite WTO retaliation.  Its green energy program, for example, requires made-in-Ontario components for solar and wind projects and so it's no surprise that Japan and others have already filed WTO complaints.

Most farmers have no written plan

Only 22 per cent of Ontario’s farmers have a written business plan and only half of those who have a written plan update it every year.

That is one of the key findings of a survey conducted by Ipsos Forward Research for Canada’s Agricultural Management Institute.

As they say, those who fail to plan are planning to fail.

As to why they don't have a plan, most said they can't be bothered.

Maybe when they come begging for government handouts, Canadian politicians should say they're no longer interested.

Sweda's court decision

Justice Peter Lauwers has approved the Sweda Farms Ltd. application to join the court cases involving L.H. Gray and Son Ltd., Burnbrae Farms Ltd. and the Egg Farmers of Ontario marketing board.

Lawyers for the three argued strenuously in Durham District Court recently to keep the cases separate. Egg-board lawyer Geoffrey Spurr argued that the evidence of conspiracy among the hinges on one telephone call between Mark Beaven of the egg board with Scott Brookshaw of L.H. Gray and Son Ltd.

Sweda has since removed Beaven from its lawsuit, but egg board general manager Harry Pelissero remains a target.

Lauwers said that single mention was based on interviews at a time when Sweda Farms’ lawyers did not know about the close connections among Gray, Burnbrae and the egg board that have been revealed in electronic files that surfaced later and are the focus of ongoing legal battles.

Lauwers further said that had Sweda Farms’ lawyers posed questions of about a conspiracy at that time, lawyers for Gray, Burnbrae and the egg board would have objected and that would have ended that avenue of pursuit.

However, in light of the electronic records, taken by Norman Bourdeau who worked as Gray’s information technology officer, the allegations of a conspiracy have become more substantial.

Lauwers said there was reason, prior to Bourdeau’s allegations of wrongdoing, for Svante Lind of Sweda Farms to believe there was a conspiracy among the three.

He points to Lind’s observation that after the egg board accused him of cheating on grading of eggs to the detriment of farmers’ revenues, Burnbrae contacted the farmers east of Toronto and Gray the farmers west of Toronto who were supplying Sweda Farms and its Best Choice Eggs business.

The egg board based its allegations that Lind cheated on egg grading on the percentage of eggs that were Grade A being a lower percentage than the provincial average. Burnbrae and Gray grade more than 90 per cent of the eggs in Ontario.

Bourdeau alleges that the electronic records indicate that Gray systematically included about five per cent of undergrades as Grade A, undergrades being mainly eggs with some degree of cracks. In other words, the implication is that Sweda Farms was providing accurate grading and it's the others who weren't.

Gray, Burnbrae and the egg board deny they have done anything wrong.

Donald Good, lawyer for Sweda, says he believes Burnbrae was doing what Gray was doing.

Any extra Grade A eggs would work to the advantage of the egg board because its operations are funded by a levy on Grade A eggs.

Lauwers writes in his decision that now joins the cases presents a “problem for the defendants” who are faced with a situation that “changes the landscape entirely.”

The next big issue is determining how much of the treasure trove of electronic files from Gray will be allowed as evidence in the case. Those files are under court protection of a lawyer in Kitchener-Waterloo because Bourdeau told the court that Bill Gray, owner of L.H. Gray and Son Ltd., ordered him to destroy those files when he faced the lawsuit from Sweda Farms.

Bourdeau did delete files while Gray watched over him in the company boardroom, Bourdeau says, but did not realize the information remained on the computer hard drive.  Bourdeau made a copy, put it in a safety deposit box, then visited Lind.

The case will now be moved from Oshawa to Toronto. Lauwers said Oshawa doesn’t have enough judges and staff to handle this case because it’s likely to last months if and when it comes to trial and all of the lawyers agreed to the change in location.

A Sweda victory

There is word that Justice Peter Lauwers has approved the Sweda Farms Ltd. application to join the court cases involving L.H. Gray and Son Ltd., Burnbrae Farms Ltd. and the Egg Farmers of Ontario marketing board.

Lawyers for the three argued strenuously in Durham District Court recently to keep the cases separate, arguing that the evidence of conspiracy among the three is weak.

Next on the court agenda is deciding how much of the treasure trove of electronic files from Gray will be allowed as evidence in the case.