Tuesday, July 12, 2016

Russell critical of vegetable industry proposal

Al Mussell has issued a paper critical of the Ontario Farm Products Marketing Commission for proposing a possible end to marketing board negotiation for prices and other marketing terms for 14 vegetable crops purchased by processing companies.

He says the commission needs to offer some background and rationale for opening up a debate on this issue.

And he says an end to marketing-board negotiating power would likely result in vertical integration – i.e. processing companies growing their own crops – and that would obviously not benefit farmers or society.

The Ontario Processing Vegetable Marketing Board is obviously not in favour of losing its negotiating powers.

It’s not clear what prompted the commission to open the marketing of processing vegetables to debate. but earlier this year the marketing board filed an appeal against a proposal from Art Brouwer and his Eau Farms Ltd. to establish a joint venture tomato-growing business with Canco Corp.

The tribunal denied the appeal, allowing Canco and Brouwer to go ahead with their tomato-growing proposal.

The board objected, saying the joint venture will undermine prices, prompting other processors to set up similar joint ventures.

However, Canco noted that the board has had no objection to a board member who has integrated by setting up a processing facility.

Russell was senior economist with the George Morris Centre until it closed and now runs Agri-Food Consulting Systems.