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Difficult issues to face a new tree fruit co-op president

It’s frustrating, concedes Jim Elliot, president of the Okanagan Tree Fruit Co-operative.

He figures he grows about a million pounds of apples a year on his Oyama acreage, which contribute about $1.4 million to the local economy at the retail level.

However, he only gets around 20 cents a pound for them and he’s barely able to cover his costs of production with that.

The situation is even bleaker for many growers, because the industry’s average return is even less than what Elliot gets.

He admits he’s a high cost producer because he doesn’t have a large family that’s able to help out in the business and he pays well for labour.

“It’s just not sustainable,” he says flatly. “I’m proud of what we’re doing, but society has to decide whether they want this industry or not.”

That frustration is part of the reason he’s stepping down after three years as the first president of the OTFC, an amalgamation of the valley’s four largest packinghouse co-operatives, which was created in 2008.

The annual general meeting of the co-op is today in Peachland, and Elliot’s decision to step down leaves one of the four seats up for re-election this year open.

The vacancy is a popular one, with five growers vying for two seats representing the northern half of the valley and only three in the south for two seats, including incumbents Ron Vollo and Claude Moreira.

Nominated to represent the north are incumbent Steve Day, along with Kirpal Boparai, Karmjit Gill, Brian Porter and Colin Pritchard.

Incumbents whose terms are not up this year include Philip Patera, Sam DiMaria and Malcolm Mitchell representing the north, and Nirmal Dhaliwal, Rob Dawson and Jack Machial representing those in the south.

The board will later vote on who sits in the president’s chair.

Elliot says it’s been a bigger job than anyone had anticipated, getting the new co-operative up and running, a process that’s been complicated by a series of factors that have hit orchardists and the industry hard in the past few years.

Just as the industry made the decision to unify in order to increase efficiency and reduce costs, a global economic recession hit and apples markets tanked.

Food safety issues were ramped up and expanded requirements have put more pressure on growers and added more costs to producing fruit.

The change in regulatory regime is even more costly for a large company.

Staff reductions have been made at the unified co-operative but severance packages have meant that actual cost savings have not become obvious yet.

Currency changes in the past few years have meant that Canadian exports have not enjoyed the same advantages they did previously. Then, to add to all the other frustrations, growers wanting to transition out of the industry have found that property prices and a shortage of buyers make the cost of leaving prohibitive.

“Only three orchards have sold in the Okanagan in the past year,” he notes.

The new co-op has also found federal Agriflex funding may be available, but it’s not easy to get.

Several proposals by the packinghouse have not received approval from the bureaucrats, who find something to object to in every one, says Elliot.

And finally, with the high cost of union employees increasing the costs of packing, a number of independent, non-union packinghouses have begun to spring up around the valley, further fracturing the industry and providing competition for the co-op often within its own membership, he says.

The OTFC had hoped to sell off some of its properties where packing facilities have been closed in the past few years, or where more-efficient use of the amalgamated co-op could be made, but the current real estate market makes this a difficult time to make the best use of those assets.

Because of all this, some growers have decided that amalgamation was perhaps not the best decision, but Elliot says it would have been even more costly for the industry if it hadn’t unified when it did.

“Some growers’ expectations are very high,” he commented.

He says there are a couple of irate growers whose comments leave him awake for hours at night considering how best to respond to them—and he wonders whether they’d listen to him anyway.

Elliot says he has a ski pass and a golf membership that he hasn’t got good value for in the past three years, while he sat on the OTFC board.

“And, my orchard is suffering,” he adds.

He grows 25 to 30 acres of apples and eight acres of late cherries.

Growers, he says, must do a better job of producing good quality fruit and must ship to the packinghouse only the fruit that will make money, leaving behind any damaged, small fruit that hasn’t achieved adequate colour.

Otherwise, money is lost sorting out lower quality fruit before it’s diverted for processing, or customers are unhappy about the quality of fruit they receive.

Elliot has no concerns about someone filling his shoes on the board of the co-op, and says he’s not going away, as a grower.

But he advises growers this is a time to circle the wagons and turn the guns around, not point them at each other.

 

jsteeves@kelownacapnews.com

 

 

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