McCain, farmers can't agree on price

P.E.I. potato growers have had to use arbitration to reach a price agreement with McCain Foods.

Cavendish Farms also in arbitration with farmers

P.E.I. potato growers have had to go to arbitration to reach a price agreement with McCain Foods.

The company opened negotiations this year suggesting growers take five per cent less in contracts for potatoes destined to become french fries and other processed potato products.

McCain Foods and Cavendish Farms sign contracts with potato growers on P.E.I. every year. (CBC)

Kevin MacIsaac, general manager of the United Potato Growers of Canada, a group that lobbies for potato farmers, said farmers can't afford that.

"As growers, you need to be looking at numbers that are at least equal to where you were last year because our costs have not gone down," said MacIsaac.

"The effect of having a lower offer would assume that our costs of production are lower, but it hasn't. It actually goes up a little bit each year."

When negotiations and mediation failed, an arbitrator was called in to hear both sides. A decision is expected Tuesday.

Monday night, potato farmers in New Brunswick voted to accept a slight price increase from McCain. However, the volume of potatoes the company will buy is expected to decline slightly. Due to confidentiality agreements, Potatoes New Brunswick could not share further details.

Last week, potato farmers in Maine accepted a deal with McCain that will match last year's price. McCain said that agreement includes a 10 per cent drop in the number of potatoes it will buy from Maine this year.

Cavendish Farms and its growers are in an arbitration hearing Tuesday. Details of what is on the table in those negotiations have not been made public, but the contract price from the two companies is usually very close.

Sixty per cent of the Island's potatoes are processed.