$4.7M in funding will keep 40M kg of potatoes out of landfill, says P.E.I. government
'These potatoes ... would have been dumped'
The P.E.I. government says its $4.7 million in funding for the potato industry will result in 40 million kilograms of Island potatoes being processed, rather than potentially going into landfill.
But one of the principal players in the three-way arrangement, processor Cavendish Farms, says it is still reviewing government announcements at this time.
Agriculture Minister Bloyce Thompson announced the funding April 23, saying the money would pay for shipping and storage of potatoes from the 2019 growing season "to help mitigate the potato surplus because of the market conditions related to COVID-19."
A spokesperson for the Department of Agriculture and Land told CBC News via email that as part of the arrangement, processor Cavendish Farms had agreed to process the 40 million kilograms of potatoes that didn't have a market.
The funding, administered through the P.E.I. Potato Board, is to be used to pay for the additional costs to ship and store the processed potatoes using off-Island storage facilities.
Healthy product will be able to be used for food as it was intended and not dumped.— Greg Donald, P.E.I. Potato Board
However on Tuesday, Mary Keith, spokesperson for Cavendish Farms, told CBC News via email that the company "has not committed to participate in or applied for any government COVID-19 funding programs in respect of agriculture. We are currently reviewing government announcements and have no further comment at this time."
Details to be worked out
The P.E.I. Potato Board said there are details of the arrangement yet to be finalized, but the way the agreement is set up, Cavendish Farms would be compensated for "incremental" trucking and storage costs, meaning over and above what the company would normally incur as part of its regular operations.
But general manager Greg Donald said the arrangement would benefit the entire industry — not just growers selling to Cavendish Farms, who will now have a market for these potatoes.
"The fact is that good quality, healthy product will be able to be used for food as it was intended and not dumped," said Donald.
Sell to someone else, company told growers
Last month, Cavendish Farms said it told growers under contract to provide the company with potatoes for french fry processing to "sell to other markets if they can," as the company was dealing with a "significant drop" in demand for its product as a result of COVID-19-related restaurant closures.
Donald said there was "no home" for up to 40 million kilograms of potatoes Island producers were still holding in storage from last season, grown under contract for Cavendish Farms which the company was now saying it couldn't use.
Those contracts include force majeure clauses, under which Donald said Cavendish Farms "could easily say 'we don't need these potatoes, nor will we take them'" because the circumstances of COVID-19 are beyond the company's control.
Instead, Donald said those potatoes will be processed and frozen, which he said was the best among several options considered for the surplus produce.
Selling them as fresh potatoes directly to consumers was considered a move that would flood fresh markets and depress prices.
Some potatoes have been provided to Islanders as food aid, but Donald said that was a limited option given the logistical challenges of distributing the number of potatoes involved.
Also considered was using the potatoes as livestock feed or burying them.
Donald said getting Cavendish Farms to process the potatoes will allow growers to "be paid by the processor based on the contracts they signed in the spring of 2019," something he said would help all sectors of the potato industry.
"This was the least disruptive solution."
NFU questions funding
The National Farmers Union (NFU) has questioned whether using taxpayer dollars to help offset the costs for shipping and storage to allow Cavendish Farms to process the potatoes is the best way for government to support Island farmers.
"The NFU would be happier if the P.E.I. government would bring growers more directly into a discussion of the best way to spend $4.7 million [in] potato money," said NFU district director Douglas Campbell in a statement emailed to media.
"Farmers need to be able to claim a good portion of the public emergency fund to cover their actual losses," he said.
In response to those concerns, Donald said the 12 directors of the potato board represent 180 potato growers across the province, of whom just under half grow potatoes for Cavendish Farms. He said those directors believe this is the best option for the entire industry.
"I think it needs to be very clear," he said. "Had it not been for this assistance, these potatoes would not have been processed. And in fact, they would have been dumped."