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An agreement that would see $4.7 million dispersed to the P.E.I. Potato Board and Cavendish Farms, to allow millions of pounds of potatoes to be stored, is still in effect.
P.E.I. Minister of Agriculture Bloyce Thompson announced the initiative in May of 2020 in reaction to a deterioration of the market for potatoes amid the COVID-19 pandemic.
At the time, the province claimed there were 100 million pounds of potatoes remaining from the 2019 growing season. The remaining crop was partly due to the closure of restaurants throughout North American due to the pandemic.
P.E.I.'s agreement would see the Potato Board contract Cavendish Farms to transport and store the potatoes in facilities in Nova Scotia, New Brunswick and Florida. The cold storage facilities belong to the Oxford Frozen Foods, based in Nova Scotia.
But after scrutiny from the Opposition Greens, Thompson acknowledged late in the spring legislature session that the potato market had since improved. He suggested the funds would not be fully dispersed to either the P.E.I. Potato Board or Cavendish Farms.
“The latest update is that this money probably won’t be needed because of the situation,” Thompson told the legislature on July 14.
The $4.7 million agreement:
- Agreement signed between province and P.E.I. Potato Board
- Potato Board contracts Cavendish Farms to transport, store potatoes
- Cavendish Farms contracts Oxford Frozen Foods, which owns cold storage facilities
Thompson also told the legislature the funds might be allocated to seed potato growers who have also experienced economic losses.
But in an interview on Tuesday, Thompson said the agreement to disperse the $4.7 million to the P.E.I. Potato Board has been signed and is in effect until March 2021. The contract requires the P.E.I. Potato Board to submit periodic invoices each month.
"The contract was signed and it's all in discussion with the potato board," Thompson said in a phone interview.
"The markets have changed. We're in full understanding that this money won't be all used. But it is still on the table to manage some risk if COVID changes."
Thompson said the restaurant market is still in a state of flux, due in part to the COVID-19 lockdowns that have continued in the United States.
As of Thursday, only $50,000 of this has been dispersed to the P.E.I. Potato Board.
Mary Keith, vice president of communications for JD Irving, confirmed the funds have been allocated for potato storage but have not been dispersed.
“So, status quo, in other words,” Keith said in an email to The Guardian.
Greg Donald, general manager of the P.E.I. Potato Board, confirmed the agreement between the province and the P.E.I. Potato Board has been signed. A second agreement with the potato board and Cavendish Farms is still in process.
"The agreements are in place and it's in the process of being administered," Donald said.
"I don't know where the final figure is going to end up at this time."
Michele Beaton, the Green agriculture critic, said the multi-million dollar agreement still raises red flags.
"I'm concerned that government is propping up what looks to be an unsustainable agricultural model by giving millions of taxpayers' money to a large multi-billion dollar processor," Beaton said.
"I'd rather see government supporting local farmers directly instead of solving Cavendish [Farms'] business problems."
Donald agreed with Thompson that the potato market has been fluctuating severely due to the summer increase in COVID-19 cases in the U.S.
"It definitely got impacted early. But it rebounded quicker than anticipated," he said.
"That period of time in the mid-to-latter part of March and into April, it'll never be made back up again."
The agreement allowed for the cold storage of potatoes until there was a market for them. Donald also said the 2020 growing season in P.E.I. has been very difficult due to an unusually dry summer. He described the conditions as “desperate”.