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Ontario Pork out as single-desk hog marketer

Ontario Pork has until Dec. 1 to come up with a new structure and governance model to match its new role in hog marketing in Ontario.

That role, announced Monday in a decision by the Ontario Farm Products Marketing Commission, will be to “represent, and collect license fees from, producers of all classes of pigs, including weaners and breeding stock” and to address pork industry issues on hog farmers’ behalf.

What it won’t include anymore is sole authority for marketing pigs in the province. Rather, the commission said, Ontario Pork will market pigs for producers on a fee-for-service basis.

The commission ordered Ontario Pork to develop an implementation plan to move from a mandatory marketing organization to one offering producers “choices in marketing methods,” and to return to the commission with a preliminary plan by Jan. 15, 2009 and a completed plan by March 1, 2009.

Effective immediately, though, “the requirement for Ontario Pork to review and approve direct supply contracts negotiated between buyers and sellers is revoked,” the commission said. “Ontario Pork may continue to review and approve direct supply contracts negotiated between buyers and sellers if requested by either party.”

The commission’s decision follows four days of hearings in July in Guelph into the “appropriate role” of Ontario Pork, spurred by requests from hog farmers and industry stakeholders to the provincial ag department in January. Those stemmed from concerns over the pork agency’s marketing authority and “significant dissatisfaction” with its role in logistics and scheduling of hogs to processors.

“Fairness to all”

“We believe we have made a balanced decision that provides flexible marketing options for Ontario pork producers,” said Elmer Buchanan, the commission’s acting chairman, in a release Monday.

“At the same time, we have brought fairness to all producers who benefit from the hard work the board does on their behalf, and we encourage the board to focus its efforts on the future stability and competitiveness of the sector.”

According to the commission’s report, Ontario Pork indicated during the hearings that its mandatory powers and current level of working capital allowed it to provide producers with an assurance of payment.

“However, the commission heard that producers are not guaranteed payment by the current system,” the commission wrote, adding it is “not convinced that this provided sufficient reason to maintain the local board’s mandatory powers.”

Jurisdictions in Western Canada have moved to a dual marketing system, the commission noted, and “while there was some suggestion that investment and growth had occurred in the time period after these changes, it was not clear to the commission the extent to which the changes in regulation were the cause of investment and growth.”

But the commission said it “heard no evidence to suggest that the financial position or competitiveness of producers in those regions were damaged by the move to a voluntary marketing system.”
Ontario Pork will “retain the authority to offer marketing services, including logistics, scheduling, and settlement of payment and to collect a service fee for those services, but these services shall not be mandatory and the service fee would be collected from those who choose to use the services,” the commission ruled.

The agency will, however, keep the power to collect and disseminate price information on market hog sales in an aggregate manner. Producers can choose to continue to market their pigs through “whatever methods Ontario Pork offers,” the commission said, such as pooled sales or board-negotiated contracts.

Producers, the commission said, “shall have the option to enter into supply contracts with processors, make spot sales to buyers, sell through other agents or use any other method they wish to use to market their hogs.”

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