WINNIPEG (Canadian Press) — 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 potatoes 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.