PEI

P.E.I. potato ban to U.S. expected to last into new year

The P.E.I. government is providing financial assistance to help the potato industry and trucking companies affected by recent trade restrictions to the U.S.

Province announces more financial aid for industry

Agriculture Minister Bloyce Thompson and Economic Development Minister Matthew MacKay announce funding support for the P.E.I. potato industry during a news conference Friday. (CBC)

P.E.I.'s agriculture minister says he is still hopeful potatoes in limbo won't have to be destroyed, but indications suggest restrictions on Island spuds will last into the new year.

Bloyce Thompson made the comments during a news conference Friday announcing financial assistance to help the potato industry and trucking companies affected by trade restrictions to the U.S.

"Everything's on the table," he said. "We want to do everything possible so we don't have to destroy potatoes."

The program will provide potato farmers with working or capital loans with a fixed interest rate of four per cent. Farmers can access up to $5 million.

The government will also help the Island potato industry and affected trucking companies with wage reimbursements to employers to maintain their staff during the restrictions.

The P.E.I. Potato Board says the Island ships about $120 million worth of potatoes to the U.S. annually. (Shane Hennessey/CBC)

The wage subsidy program is worth $4.2 million, retroactive to Dec. 1. It is capped is $3,000 per month per employee. About 1,400 employees would be affected.

The assistance is in addition to a $10 million contingency fund announced previously for the potato industry.

It's been more than two weeks since the Canadian Food Inspection Agency announced it was suspending fresh potato trade to the U.S. following the discovery of potato wart in two Island fields.

'Serious tough times'

Thompson spoke with federal officials in Ottawa this week, and said he came away with the feeling the ban won't be resolved until at least the new year.

"This is unbelievably frustrating," he said Friday. "There's going to be some serious tough times."

The P.E.I. Potato Board has said the ban could lead to millions of kilograms of potatoes being destroyed, and that it's already too late for producers to recoup lost sales.

It's going to provide a lot of assistance to growers in the short term, given what we're dealing with.— Greg Donald, P.E.I. Potato Board

Thompson said he's still hopeful potatoes won't have to be destroyed, but decisions have to be made "sooner rather than later." He said the situation needs support from the federal government.

"We need serious compensation or the border open."

Thompson said discussions with farmers last week were tough.

"This is serious, this is affecting our family farms and we took that message to Ottawa and we just can't seem to get the urgency that we feel ... is there to get some answers.

Matthew MacKay, minister of economic growth, said the potato industry is P.E.I.'s biggest economic generator and the trade restrictions cause a ripple effect to the rest of the economy and workforce.

Subsidy eases financial strains

The general manager of the P.E.I. Potato Board, Greg Donald, is relieved by the government's announcement. He said it will ease financial strains on farmers.

"We were pleased with the announcement and it's going to provide a lot of assistance to growers in the short term, given what we're dealing with," he said. "It'll help them with working capital, also with some financing."

It's important to keep the good folks that are working with them and this will certainly help with that.— Greg Donald, P.E.I. Potato Board

Nevertheless, the restrictions being lifted still remains a pressing need for potato farmers, Donald said. 

"All of us collectively, and certainly the whole industry, that would be the best news," he said. "Every day that goes by, the more losses and so on, so forth. We're eager to have some good news real soon."

The wage subsidies will help farmers keep employees and partners, Donald said. 

"During these times, it's important to keep the good folks that are working with them and this will certainly help with that."

Dumping potatoes very likely

There's a possibility that potatoes will need to be dumped if there is no market to sell them in, Donald said. The potato board hopes farmers will be reimbursed through government insurance, if that happens.

This is something that's going to continue to cause challenges well into the future, not just in the next few months, but we're talking years.— Greg Donald, P.E.I. Potato Board

"We are talking about that now because the time to do it is in the middle of winter when we have freezing temperatures that will destroy those potatoes," he said. 

Destroying their produce is the last thing farmers want to do, Donald said.

"That is just not what anyone in the industry wants."

Donald said that dumping potatoes is just a short-term issue. Planting next spring will be a challenge as well, he said.

"This is something that's going to continue to cause challenges well into the future, not just in the next few months, but we're talking years," he said.

"That's what we're up against."

With files from Laura Meader

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