Processing vegetables: a missed opportunity for the eastern Ontario economy

Field vegetables grown for the processing industry is an Ontario speciality, and a profitable one at that. As of 2010, the value of vegetables grown for the Canadian processing market totalled over $128 million, with 48% of total production coming from the province of Ontario. In 2013 alone Ontario Processing Vegetable Growers (OPVG), the provincial marketing board responsible for negotiating contracts on behalf of farmers, secured contracts for over 450 farmers with 19 different food manufacturing facilities.

Only issue is that not one of these contractees, neither farmers nor manufacturers, are located east of the GTA. In fact OPVG itself only has organized district committees extending as far east as the border of Hastings County. Everything beyond that is no man's land as far as vegetable processing is concerned. So why aren't eastern Ontario producers growing for the vegetable processing industry?

It's certainly not a production capability issue which limits us - field vegetables are already a regular crop on many eastern Ontario farms which produce for pick-your-own, farmer's market stalls, or CSA sales models. Sweet corn, the most important processing crop by area, is practically a staple come July in the Ottawa valley.

And it's also not an issue of required capital investment - the majority of southern Ontario's processing vegetable crop is hand-harvested, and in fact many of OPVG's contracts actually mandate hand harvest. While there is mechanical harvest equipment on the market designed specifically for larger processing vegetable operations with significant hectarage, the high value per hectare of processing vegetables can make hand harvest worthwhile at any scale, large or small. As an example, take the above-linked hand harvested butternut squash contract. At 2014 prices of $138.50/tonne with the average winter squash yield in Ontario at about 20 tonnes/hectare, a farmer could count on a $2770/hectare revenue - double or triple that of many conventional rowcrops grown in eastern Ontario.

No, the major roadblock to processing vegetable production in eastern Ontario right now is access to buyers, who are currently concentrated in the manufacturing belt of southern Ontario. Transportation from field to buyer is an out of pocket expense for farmers, and when your only buyer is a 600km truck ride away it's usually more financially feasible to produce what can be marketed closer to home. In eastern Ontario's case, that has tended to be limited to dairy, beef, corn and soybean production. Especially now with the collapse of the local pork industry, eastern Ontario farms are becoming increasingly less diverse and sticking to those four products.

Just take a look at this business directory for eastern Ontario food producers. You'll find a number of companies under the cheese, meat, grains and cereals sections. But flick through the vegetable section and you'll find nothing but on-farm operations marketing directly to the public.

Without any processors within a reasonable distance, this is the only available option for vegetable farmers - to sell directly to consumers. What few local processed goods are produced in the area are made entirely on farm by the farmers themselves for sale to locals. Given the relatively low population of rural eastern Ontario these operations have a small consumer base and consequently tend to be small and low-income themselves.

This is at a time when unemployment in the region remains above average and many rural eastern Ontario communities are attempting to diversify their agrifood sector in response to the collapse of other local industries such as forestry. And vegetable processing seems a prime candidate for an agrifood diversification opportunity since unlike many industrial sectors in the province it is an expanding industry - especially in the manufacture of frozen products.

While most of the food processing sector suffered from competition with imports after NAFTA, the vegetable processing industry has remained strong and even managed to net a $9 billion export:import surplus. As well, it's one of the only industrial sectors in Ontario where employment numbers have actually been increasing over the past 10 years, due in large part to the expansion of the frozen vegetable industry. (Source)

Since despite local government effort to attract food processing industry there is an absence of local processing corporations, it seems like any potential future for processing vegetable agriculture in eastern Ontario will be entirely contingent on the development of value-added agrifood industry - that is, industry owned and operated by farmers' cooperatives themselves. However, as has been noted before, eastern Ontario is far behind the rest of the country in the development of value-added agriculture,

"One wonders why there are so few value added Agri-Food businesses in Eastern Ontario. According to data from the United Counties of Prescott-Russell, only three such businesses are established in the area. As for Stormont, Dundas, and Glengarry counties, one finds branches of large corporations such as the Kraft Company, but within city limits...

...in 1996, the United Counties of PR and SDG sold $364.47 million worth of agricultural products. This level of sales is comparable to that of Nova Scotia, Prince Edward Island and New Brunswick individually. Yet, almost all of those products are directed in areas other than our counties for processing. And so is the additional cash flow."

And it's a lack of social and economic development that prevents this kind of value-added development from taking place - most notablly manifested in eastern Ontario in the continuing youth emigration as less and less options remain for rural youth, the lack of educational development among the east's sizeable francophone communities (over half of the francophone population in eastern Ontario reports reading comprehension levels of 1 or 2 out of 5, signifying extreme difficulty reading), and the increasing difficulty of achieving financing or subsidy in an era of austerity.

So long as these conditions persist and sufficiently diversified agrifood industry doesn't take root in rural eastern Ontario, farming in the area will continue to be dominated by more conventional livestock-oriented production and sale of raw cash crops for processing in other regions - and the production of processing vegetables in the region will remain nothing but a missed opportunity.