Wednesday, January 16, 2008

Trouble ahead for Niagara's fruit industry?

Let's not picture this alternative for Niagara's fruit farms. [click photo to enlarge]

On Jan.12, 2008, the St. Catharines Standard carried a story about the announcement that the St. David’s, Ont., CanGro fruit processing plant (which makes Del Monte, Aylmer and Ideal brands), and which apparently is the only fruit processor in Canada east of the Rockies, is set to be closed, impacting “sixteen hundred acres of land.”

“Future of local fruit industry looks bleak”, the Standard’s pg. A4 headline read; the front page headline was “We need a plan”.

Jim Bradley didn't provide much of a solution, other than that another buyer should be found. Transitioning from fruit to grapes and setting up replant programs seems to be the government answer. The Standard wrote: “As for the replant program, Queen’s Park is waiting for Ottawa to make its move.”

The best that Liberal-run Queens Park, and Bradley, the so-called Champion of Niagara, can do…is wait ?! That’s the leadership Bradley brings to Niagara?

Not long ago, Bradley’s Liberals gave Ontario’s auto industry half a billion dollars - why doesn’t Bradley provide the cash to simply have the Ontario government buy the plant, and run a state-subsidized fruit processing and retailing facility?

Cloaked in some appropriate ‘GreenSpeak’ enviro-mumbo-jumbo, he could pull it off. Save the farmer – become the farmer. Save the plant – buy the plant.

The new “FRUITARIO” brand can exist as a ward under the auspices of at least a dozen different government ministries. They wouldn’t even notice the expense!

Having already halted farmland development by “protecting” it with the Greenbelt, the Liberals could now start to expropriate, at pennies on the dollar, of course, the supplier’s fruit farms, and hire the farmers as State workers on their former farms. The government can subsidize the labour, the marketing, the transportation, the equipment, the packaging and all the associated land stewardship, as only a government knows how. What, no?

Len Troup, the chair of the Ontario Tender Fruit Producers marketing Board was dismal in his assessment of the situation. Wrote the Standard: “By removing tariffs on imported canned foods more than a decade ago, the government opened the floodgates to cheaper food from around the globe, Troup said”. Was Troup referring to the Liberal federal government of Chretien, or the previous federal Conservatives? Is that a poke at free trade? (Now re-packaged as “fair trade”)

Free trade was a great and arduous challenge for the grape industry in the late 1980’s, a challenge which the growers and wine makers rose to successfully meet. Liberals, under John Turner federally, and under premier David Peterson provincially, were against free trade, preferring protectionism instead.

Now, Liberals like Jim Bradley, a former Peterson cabinet minister, admit ( if they're surprised) free trade was good for the wine industry. “Jim recognized that the wine industry has responded well to Free Trade by improving the product and making the tourism component a priority”, wrote the Rotary Club of St. Catharines website, Jan.12, 2006. Jim said the wine industry responded well…but Jim didn’t say how his Liberals opposed and disparaged free trade. In effect…the wine industry did well - DESPITE Jim Bradley’s best efforts to interfere. Who knows what the alternative would have been had Bradley’s Liberals had their protectionist way in the 80’s.

A decade ago, here is how Bradley played it, bashing the Conservatives whenever possible. From the OLA Apr.28,1997:

“Mr. James J. Bradley (St. Catharines): Already reeling from the proposed implementation of a disastrous change in assessment of cottage wineries by the Harris government, people in the grape and wine industry will not welcome the news that the Conservative regime has taken another step towards widespread privatization of services for the people of the province, including the possible privatization of the LCBO.
With the reality of the impact of the Canada-US free trade agreement and the provisions of the General Agreement on Tariffs and Trade, the grape growers and wine producers of Niagara and southwestern Ontario need the LCBO more than ever to allow fair promotion of our product in their stores across Ontario, particularly when our wine faces stiff and often unfair competition from offshore producers.
The total sales value of wine from Ontario is $257 million. For every $10 million in wine sales, there's $14.8 million in economic activity in Ontario, according to a Deloitte and Touche study. Total wine industry related employment is 4,000; the value of grape purchases in 1996, $20 million; acreage for grapes in Ontario, 18,000; 200,000 visitors attracted to the Niagara wine region during special summer events.
There are dozens of reasons not to privatize the LCBO, and the future of our grape and wine industry, in which the government of Ontario in the 1980s invested tens of millions of dollars, is one of the most important.”

“Unfair competition”? Will Bradley be using that similar argument regarding CanGro now, in 2008, when his Liberals are in power?

Note to Jim: If only we had a Fruit Control Board of Ontario…yes, a FCBO…like with the LCBO; like with OHIP: we could form a monopoly and ban competition forever!! I remember the Liberals, under Peterson, saying they were going to allow beer and wine sales in corner stores. (Toronto Star, Oct.11, 1986) Instead, they “invested” millions into the LCBO retail monopoly, not in a competitive retail model.

Let’s look at Bradley’s performance in the OLA, regarding the grape and wine industry, May.6, 1997:

“Mr. James J. Bradley (St. Catharines): The grape and wine industry is of immense benefit to Ontario as a whole and to the Niagara region and southwestern Ontario in particular. That is why the repressive tax policy of the Conservative government of Mike Harris must be changed to provide our wineries with a fair opportunity to compete on a level playing field with producers around the world.
The news that the efforts of the Liberal caucus and representatives of Ontario wineries might be having an effect on the provincial government is encouraging, but the final details will be the proof required.
By making representations to the finance and economic affairs committee of the Ontario Legislature, the Ontario Wine Council has chosen an appropriate forum, consideration of Bill 106 on municipal assessment, to bring to the government's attention this lack of wisdom of assigning an industrial assessment category to our wineries. An amendment to Bill 106 may be the way to solve this dilemma, as long as it restores an agricultural designation for municipal taxation purposes.
I am again calling upon the Harris government to abandon this unwise and punitive measure affecting estate wineries in Ontario and to return to the farm assessment model, which is far more appropriate to estate wineries and consistent with similar operations across the province. The fate of our grape and wine industry is in the hands of the provincial government and only the abandonment of this disastrous taxation policy is acceptable.”

But isn’t the fate of the tender fruit industry also “in the hands of the provincial government” today…Bradley's Liberal government? And when Jim talks about “regressive” taxes, we need only look at what his Liberals have schemed up since 2003.

So what is Bradley going to do in 2008 (besides wait)?

The Standard wrote: “The province keeps making it more expensive for farmers to do business, with a spiking minimum wage and more stringent regulations, he [Troup] said.”

Did Bradley and his provincial Liberals not have anything to do with those issues also?!

The Standard wrote: “Many of our people will say if it’s wide open competition and if they have to compete with jurisdictions that have bad environmental and labour records, it’s going to be a major challenge for them to be able to compete on price,” Bradley said.”

Bad environmental” records…does Bradley mean his own Liberal’s bad environmental record, which Greenpeace called “laughable”? Does Bradley refer to Ontario’s coal-fired, pollution-spewing power plants, that his Liberals lied about closing? And which in the meantime, are not even being remediated by the Liberals with scrubbers? Is Bradley referring maybe to his Liberal government’s refusal to implement California-style emission caps in Ontario (as Quebec did, St. Catharines Standard, Dec.12, 2007)? Did Jim Bradley also not have direct bearing on those environmental policies, which are now creating “a major challenge” for growers to compete on price?

Isn’t it possible that a P3 arrangement can be implemented to float the plant for another growing season, under a receiver, while due diligence is made for eventual sale? The factory, though quite old, and the land it’s on, must be worth something, let alone the upside of future potential sales. If shares were offered, in some kind of limited-partnership (or co-op) type arrangement, I would be willing to buy into that.

There must be a profitable market out there for Niagara grown fruit. I believe that there are still more options which have not yet been explored.

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