The agreement between Ontario growers and tomato processors for the 2017 growing season is expected to drop the price tomato farmers are paid as their yields increase.
The agreement, announced last week, maintains the contracted tonnage of 2016 and follows the five-year pricing agreement set by growers and processors last year.
Final prices, however, aren’t yet set as the Ontario processing tomato price is based on the California Tomato Growers Association price plus Ontario considerations, such as the value of the dollar and productivity.
Though the CTGA price isn’t yet set, the productivity section of the Ontario agreement has — and it includes a discount over last year’s price for extra yield.
Under the new price adjustment, for each one ton increase in yield, starting at 39 up to 40 tons per measured acre, a discount of 0.5 per cent per ton will apply; for each one ton increase in yield from 40 to 45 tons per measured acre, the price will be discounted by one per cent. Over 45 net tons per measured acre, a price discount will apply of 1.5 per cent per ton. The price decreases incrementally as yield increases incrementally.
The formula for productivity has decreased from last year. For example, from 39 to 40 tons last year, there was no decrease, but this year there’s a discount of 0.5 per cent per ton. Some slight increases in payment for replants and transplants are now included.
The three largest processors of tomatoes in southern Ontario reached agreements under the process, including ConAgra Foods Canada, Highbury Canco and Sun-Brite Foods.
The processors had been pushing back against the ability of the Ontario’s Processing Vegetable Growers (OPVG) to negotiate processing tomato contracts for all producers.
Now that there have been contracts created for the same tonnage as in 2016, there will still have to be a permanent solution found to reorganize how tomato and other processing vegetable contracts are negotiated.
“I am pleased that (OPVG) and our three major tomato processors worked together to reach negotiated agreements for the 2017 growing season,” Jeff Leal, Ontario’s minister of agriculture, food and rural affairs, said last week. “I appreciate their hard work during the negotiating process to ensure a deal was reached for the parties involved.”
Leal had dismissed the board of directors of the OPVG when an impasse to a new contract between tomato growers and the main processors could not be broken. He appointed former agriculture minister Elmer Buchanan as the trustee of the board and he worked to get the contracts done.
“As with any successful negotiations, both sides came to the table and were willing to compromise to reach an agreement,” said Buchanan in a statement. “This resulted in a successful deal that will benefit the industry.”
The Ontario Fruit and Vegetable Processing Association (OFVPA) last week said growers under this year’s interim process “successfully negotiated to get back over 100,000 tons of tomato production previously cut.”
“It is important that (Leal) set in place permanent regulations to the interim changes he made to save the 2017 season,” OFVPA president Steve Lamoure said in a release.
“We can’t be back to the same impasse come September. We have proven that reform leads to investments and jobs. Working directly with our partner growers really worked well.”
— John Greig is a field editor for Glacier FarmMedia based at Ailsa Craig, Ont. Includes files from AGCanada.com Network staff.