Fruit growers grapple with third year of losses

KELOWNA – Poor apple prices were the focus of the 131st annual BC Fruit Growers Association convention in Kelowna, February 11-12.

“This is the third consecutive year of declining grower returns,” says BCFGA president Pinder Dhaliwal. “Returns are now below the cash cost of production.”

Payouts as low as nine and 10 cents a pound for Gala apples were reported by top growers on their first pool advance from BC Tree Fruits Co-op. These figures are being called the lowest ever in real terms and compare with the 30 cents a pound it costs to produce apples in BC.

“BCFGA is hearing that apple growers do not have resources to pay for the upcoming season’s agriculture activities such as pruning, thinning, fertilizer and harvesting,” says Dhaliwal. “The provincial government needs to recognize the complex economics of our industry.”

BCFGA general manager Glen Lucas said growing conditions during the 2019 season were not ideal, declining soon after fruit set.

“Though pollination and fruit set were satisfactory, things went downhill from there,” he says, with near-weekly rain events and extreme heat in August creating problems.

“The rains split cherries and increased culls and the rains and heat caused poor colour, weakened fruit and storage issues for apples,” he explains.

Grower costs continue to rise, with BC’s minimum wage rising to $13.85 an hour last summer and increasing to $14.60 an hour on June 1, 2020. Crop protection, fertilizer, fuel and equipment are also more expensive.

Delegates shared their frustration with increasing food safety and environmental demands.

“There are too many regulations we have to pay for,” says Denise MacDonald, an apple grower from Summerland. “It’s too costly for young growers, especially with land over $100,000 an acre, to get 20 cents a pound for top Ambrosia apples.”

Many of the convention’s resolutions called for the association to approach government to seek relief from costs and improve farm income, including funding food safety equipment, exemption from the provincial sales tax and allowing value-added enterprises within the Agricultural Land Reserve.

A late resolution directed the association’s board to seek a special provincial per-pound payment to apple growers in respect of market losses in 2019. The resolution suggested a cash payment and/or other proposals such as an increase in AgriStability coverage, a PST exemption, a rebate on irrigation fees, provincial guarantees and interest-free grower operating loans, and a duty against US apples being dumped into Canada at prices below the cost of production.

“This industry is in dire need of help right now,” says Amarjit Lalli, a Kelowna grower who supported the late resolution. “We just need short-term help and we will turn the ship around.”

Talk between members on the convention floor focused on the role of the BC Tree Fruits Co-op in the current financial difficulties. The co-op is the largest sorting, storage, packing and marketing group in BC.

“We are at a pivotal time,” acknowledges BCTF board chair Steve Brown. “These low returns are not sustainable.”

Conceding that there have been similar promises before, Brown outlined four areas for change: marketing and sales, governance, infrastructure planning and government support.

“The difference now is qualified leadership,” he says. “But we have to act fast or we are in trouble.”

Brown promised information on new strategies in the near future and urged BCFGA members to attend the co-op’s upcoming meetings, as they’ll be the proper place to discuss strategies addressing the co-op’s four focus areas.

“We need to vote to survive and thrive,” he says. “We can be better together, but the biggest hurdle is staying united.”

The co-op’s new CEO, Warren Sarafinchan, did not deliver his report in person, but sent a video as he was in Asia exploring new market opportunities.

“The co-op definitely has a future,” he says. “But it is abundantly clear we need to change things. The status quo is not an option.”

Sarafinchan alluded to the lack of transparency that has dogged the co-op in the past.

“I think in the past we have been perhaps less collaborative, our communication has been less frequent,” he says. “We need to be working with all stakeholders in an open and transparent way to make sure we are positioning the industry for success.”

Sarafinchan outlined some of the work that has gone on over the last several months.

“If we have trust, collaboration and innovation, I think we can do amazing things with the business and the industry,” he says.

Opposition agriculture critic Ian Paton addressed the convention and noted that there was no mention of agriculture in the February 11 throne speech.

“Many of the issues that I have discussed with your board affect farmers all over the province,” says Paton.

“You can appreciate what we are going through,” says Amarjit Lalli. “We have individuals who are on the verge of losing their properties. Consecutive governments have failed farmers.”

Vernon grower Dave Dobernigg thanked Paton for showing up, something the province’s current agriculture minister, Lana Popham, has not done.

“I assure you that it has not gone unnoticed that you have made the trip to our AGM twice now and the ag minister has not,” he says.

Lucas says that concerned growers met and discussed their individual financial situations following the formal convention proceedings. Their personal stories will give the executive more information to share during their next meeting with Popham.

“We have been in dialogue with the ministry over the last three years now,” says Lucas. “It began with concerns over the 2017 crop.”

BCFGA met with Popham on November 5, 2018, April 3, 2019 and, most recently, on February 6. A meeting was scheduled for February18, but government staff were ill and the meeting was cancelled. A new date has not been set.

“We now have specific proposals to bring forward from the late resolution and clear examples of the desperate situation that many growers are in,” says Lucas. “The board will push as hard as it can for a brighter future for the industry.”