MITCHELL, ONTARIO--(Marketwired - Dec. 21, 2016) - Processors representing over 50% of Ontario's commercial tomato processing have announced they will not contract with tomato seedling producers until the recommendations of the Province's independent Farm Products Marketing Commission are implemented.
"The current system is not economically sustainable" said John Iacobelli, CEO of Sun-Brite Foods "After years of thorough review, the Commission recognized that the way that vegetables are marketed in Ontario needed to change," said Sam Diab, President and CEO of Highbury Canco. "This was not an easy decision." Together Sun-Brite and Highbury Canco represent two of the three largest tomato processors in Ontario.
While negotiations with seedling producers have concluded with no increase in price over the term of the contract, individual processors determine quantities and initiate orders. The cutback in orders will be felt first among seedling producers who normally receive contracts in February and early March.
"Currently the system has resulted in too many farmers, too many processors and too many Ontarians losing their jobs as vegetable processing in Ontario has dwindled over time," said Diab. "Without an open and transparent partnership, we are fearful for the future of vegetable processing in Ontario. We have an obligation to our employees, our shareholders, and our growers to be economically sustainable," Iacobelli pointed out.
After two years of mentoring the growers and multiple reports, the Commission, on June 28, recommended removal of the powers of the Ontario Processing Vegetables Growers Association to set prices.
On August 17th Ontario Agricultural Minister Jeff Leal stayed this decision, just 2 weeks after the growers hired Leal's former Chief of Staff.
"We attempted to work with the growers, and spent two months trying to avert this crisis. The Farm Product Marketing Commission monitored the meetings and there is a record of lying, delaying, and bad faith by the growers," said Diab. "At one point they delayed meetings for two weeks while their grower's chair went moose hunting."
"The grower's cartel has endangered the jobs and economic health of communities throughout southwestern Ontario. They have even endangered the livelihood of their own growers," said Karl Evans, President of the Ontario Fruit and Vegetable Processing Association.
Evans went on to say, "We have 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."
As the first step, processors representing over 50% of total commercial tomato processing acreage, informed seedling tomato growers that they would not be proceeding with any orders for seed planting. This 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," said Iacobelli. "Millions of dollars in economic activity is now at risk as a result of the grower's decision not to follow the Commission's recommendation."