Soybean board says good-bye to merger

Dec 19 2007
The Ontario Soybean Growers board of directors’ sudden withdrawal from a merger agreement with two other provincial grains and oilseeds groups has generated both support and criticism from the province’s agricultural community.
by MARY BAXTER
But those on both sides of the issue who might be wondering what motivated the board to make such a decision had to wait until a Dec. 19 committeemen’s meeting to find out what the reasons behind the decision might be.
That’s the word from board’s chair Leo Guilbeault.
“Clarification will be done directly with the growers at the meeting next week,” said Guilbeault on Dec. 10.
The decision to withdraw from a memorandum of understanding with the Ontario Corn Producers’ Association (OCPA) and the Ontario Wheat Growers’ Marketing Board (OWGMB) was made by secret ballot at a Nov. 27 board meeting.
Guilbeault would not say how many voted for or against the decision other than it won a majority of the votes. He said all 15 directors attended the meeting although one had to leave early. That director was Joe Hickson. Hickson confirmed he did not have an opportunity to vote on the decision before he left.
The other boards were informed of the decision at a Nov. 29 meeting of the committee in charge of planning the merger.
“It came as a disappointment,” said Dale Mountjoy, president of the Ontario Corn Producers’ Association. “We’d put a lot of time into this.”
Al Kerkhof, chair of the Ontario Wheat Producers’ Marketing Board, shared that perspective and affirmed his board’s continued support of the idea of merging with other groups by stating in a Nov. 30 news release that “we feel strongly that our joint proposal would add value to Ontario grain and oilseed farmers.”
Guilbeault said the soybean board has opted to follow through on a strategic plan that it is in the process of developing.
“It’s a better option than the MOU (Memorandum of Understanding),” he said on Dec. 10.He explained that the MOU did not define clearly how the organization’s strategic plans would be carried forward during the merger and these were among the board’s concerns.
Guidelines for board members discussing the issue obtained by Better Farming listed a number of other concerns, including:
the package that would be issued to growers ahead of a March vote on whether to approve the merger “did not fairly reflect both the pros and cons of both sides of the issue;”
the process of developing the merger was not transparent enough;
the merger might decrease the value of soybean grower services despite a significant increase in proposed license fees; and
with a proposed reduction in the number of directors representing growers to 15 in the new organization compared to the 41 currently serving the three organizations, grower representation would be lost.
Middlesex farmer Jamie Payton said he thinks the decision to pull out is a “positive move.”Of particular concern, he said, was the proposal to significantly reduce the number of directors on the new, amalgamated board. That might lead to a situation of greater staff involvement and less grassroots, he said.
He said he had confidence in the board’s decision, describing its members as “astute” and “frugal.”
Huron County farmer Bev Hill, on the other hand, said he was really disappointed with the decision. Indeed, he said he’s so disappointed, “I hardly know where to start.”
He pointed out there was significant grassroots involvement in the development of the merger.
The merger was signed by all three groups in June, 2004.
After it was signed a committee of farmers drawn from all three commodity groups developed four different options for producers to consider. These options were presented at county committee meetings earlier this year and at the organizations’ meetings in March, producers opted to completely merge the three groups. Since then, a committee that includes two members from each organization and their alternates as well as facilitators have worked on developing the final proposal.
Hill said he’s concerned that growers didn’t have a say in the soybean board’s decision to dissolve the MOU.
Moreover, at a recent meeting, Huron County’s two soybean directors cited confidentiality as a reason for not being able to provide a detailed explanation for the withdrawal, he said.“We think that’s wrong.”
The directors did confirm that the reasons did not involve personnel or a legal issue - the only two reasons that would justify keeping reasons confidential, he said.
Although he calls the board’s directors “competent,” Hill said their decision has affected his trust in the organization.
Hill said he’d like to see a province-wide vote take place as was scheduled to happen in 2008. (The Ontario Farm Product Marketing Commission, which oversees all three organizations, requires a producer vote for fundamental changes to marketing boards. To effect a change at least two thirds of those casting votes or half of the cumulative production represented by those casting ballots must be in favour of the change).
Hill said he felt an amalgamation would “provide an opportunity for farmers to speak with one voice in the matters of corn, soybeans and wheat.”
“Long term that’s bound to have a positive impact.”
Mountjoy said concerns about the financial stability of the OCPA wasn’t one of the reasons given by the soybean growers for their decision.
“All three boards put their financial statements into the package (to be distributed to producers),” he said.
Referring to the organization’s debt in connection with its loss of a trade action against U.S. corn growers, Mountjoy also said OCPA would would have the money owed paid by mid-2009, the deadline that had been set for the merger of the three groups.
“We owe some money but we’re on a repayment schedule,” he said.
Guilbeault said he had no comment on whether the financial health of the other organizations played a role in the decision.
“That’s speculation,” he said.
Guilbeault said he had fielded many calls from growers unhappy with the board’s decision.
But because it’s a board decision, “we have to stick by it - for now,” he said. BF