Announced changes to how Ontario carrot and tomato growers and processors negotiate price are being blasted by the Ontario Processing Vegetable Growers (OPVG).
Provincial Agriculture Minister, Ernie Hardeman recently announced that the tomato industry will move to a direct marketing system:
- Every producer will have a written “associated producer agreement” with their processor for a minimum term of three years, which provides that the producer will grow vegetables for the processor during this term.
- If a producer or processor wishes to terminate their associated producer agreement, they must provide the other party with at least two year’s notice.
- The associated producer agreement will specify the minimum annual tonnage that the processor will buy from that producer. For current producers, the minimum annual tonnage for the 2020-2022 crop years must be at least 90 per cent of the average 2017 to 2019 contracted tonnage for the producer as applied against the overall 2019 contracted tonnage of the processor.
- Each year an “annual agreement” will be negotiated between producers and their processor that will include price and other key contractual terms and conditions.
- Producers for each processor will, by secret ballot, elect to have elements of their “annual agreement,” such as minimum prices, negotiated by a negotiating agency on their behalf, or to negotiate directly with their processor.
Carrot growers face similar regulatory changes.
OPVG says the regulations set the stage for a “sham process where the balance of power now lies firmly in the hands of processors.”
“We have spent considerable hours assessing how the recently announced regulations will impact the tomato and carrot growers but also the impact to the other commodities we represent,” says Dave Hope, chair of the OPVG. “We will need to analyze the regulation in detail to determine the depth of hurt to the sector. The largest impact is a reduction in collective bargaining power being removed from the growers’ elected representatives and handed to the processors.”
For growers of processing corn, peas, squash, beets, cabbage, beans, onions, peppers, and pumpkins, the government says the rules remain the same and they will continue to market through the current negotiating agency model, with a some changes:
- Each producer and processor will have an “associated producer agreement” for a minimum term of three years, which provides that the producer will grow vegetables for the processor during this term;
- If a producer or processor wishes to terminate their associated producer agreement, they must provide the other party with at least one year’s notice; and
- Clarifying the rules for producers who need to take a one-year leave from growing with the agreement of their processor.
The OPVG is a marketing board regulated under the Farm Products Marketing Act and represents nearly 340 Ontario processing vegetable growers. Farm gate sales for processing vegetable crops in in 2019 was just under $90 million. OPVG members are family-owned and operated businesses, growing vegetable crops for Ontario food manufacturing companies