Features Production Research
Manitoba farmer in mash up with potato regulators

October
13, 2009, Winnipeg, MB – A Manitoba farmer says he was forced to give away
millions of kilograms of specialty potatoes to cattle producers in 2008
after regulators stopped a sale to chain of Quebec poutine parlours.

October
13, 2009, Winnipeg, MB – A Manitoba farmer says he was forced to give away
millions of kilograms of specialty potatoes to cattle producers in 2008
after regulators stopped a sale to chain of Quebec poutine parlours.

Northern
Potato Co., a family-owned corporate farm based in Bagot, Man., signed a $1
million deal with Montreal distributor Thomas Fruits et Legumes in 2007 to
supply potatoe to La Belle Province, a fast-food chain famous for its hot dogs
and poutine, farm-company president Henry Khul said.

All
Manitoba-grown potatoes bound for processors must be sold through Keystone
Potato Producers Association, while table potatoes must be sold through
marketing board Peak Of The Market.

Khul
claims Keystone initially approved his Quebec sale but changed its mind after
he began shipping red potatoes east in November 2007.

That
led to an April 2008 ruling from the Farm Products Marketing Council – a
provincial body that hears appeals of marketing board decisions – that required
Northern Potato to sell through Peak Of The Market.

Rather
than pay the fees, Khul said he gave 2.3 million kilograms of his spuds away to
cattle farmers and filed a crop insurance claim for $180,000.

“I
was growing a very, very unique specialty potato, a large red processing
potato, not a table potato,'' said Khul, a former Peak Of The Market board
member who has a long history of opposition to marketing boards.

“La
Belle Province can’t get enough of this product. The French people love this.
You go there and there are people lined up outside.”

Keystone
Potato Producers said it never granted Khul permission to sell his product
directly to Thomas Fruits in Montreal. Khul failed to demonstrate that Thomas
Fruits is a processor, as opposed to a distributor, said Keystone chairman
Garry Sloik.

Peak
Of The Market then offered to sell Khul’s product to Thomas Fruits on Khul’s
behalf, said Larry McIntosh, Peak’s president and CEO.

“He
knew the regulations. We offered to sell it at his prices to make the deal
legitimate,” McIntosh said. “We offered to sell it so nothing would be spoiled
or wasted.”

Northern
Potato never responded to Peak Of The Market's offer, McIntosh said.

Khul
claims the fees charged by Peak rendered the deal impossible.

“We
kept these potatoes until June. They were already deteriorating. Basically, we
got nothing for them,” he said.

But
the regulators dispute this, too.

“He
didn’t dump those bags. They were shipped to the United States,” said McIntosh,
claiming Northern Potato sent 1.1 million kilograms across the border.

Northern
Potato is the second Manitoba spud company to complain about clashes with
regulators this year. Earlier this summer, Otterburne’s Schriemer Family Farms
ran afoul of Peak Of The Market after it was caught selling table potatoes to
Sobey's supermarkets without going through the marketing board.

Ken
McLean, a former Peak Of The Market general manager, said he’s surprised Peak
is concerned with smaller growers at all.

“You’re
never going to get it all,” he said of the Manitoba potato market. “It’s just
going to force it underground.”

Peak
Of The Market, however, is preparing to exempt small Manitoba potato growers
from having to go through the marketing board.

McIntosh
said his board is prepared to change regulations to allow non-Peak growers to
sell potatoes at roadside stands and Farmers’ markets, but probably not at
independent grocery stores.