NEWS RELEASE
June 24, 2004 - For Immediate Release
Western Canadian Durum Farmers Blind-Sided By Canadian Wheat Board
A group of Western Canadian farmers who followed all the rules in setting up a successful value-added venture for their durum wheat are now discovering that they cannot proceed because of a technicality with the Canadian Wheat Board (CWB) new Generation Co-op (NGC) policy.
Prairie Pasta Producers (PPP) is a new generation co-operative aimed at bringing the power of integrated "field to plate" value-added processing to Western Canadian durum growers. These Canadian farmers began discussions with Dakota Growers Pasta Company (DGPC) of Carrington North Dakota several years ago after both groups expressed mutual interest in working together to add value to Canadian durum by processing it into pasta for Canadian and American consumers.
On June 1, 2004 a share offering closed that was in conjunction with an offer to purchase DGPC shareholders’ preferred “D” shares. Each share gives the PPP member the right to deliver one bushel of durum per year to DGPC. The transaction was conducted with the full knowledge of the CWB and done according to the CWB's NGC policy.
Shortly after the share closing PPP received written notice from the CWB that they did not qualify under the NGC policy rules because the processing was to take place outside of Canada, which effectively killed the share offering.
PPP says there is not any clear mention in the CWB's NGC policy that it is only for Canadian processing.
"We've been dealing with the CWB for years on this matter, fully disclosing the direction we were taking with DGPC. We have had many meetings with them to ensure we were working with them instead of in violation of their regulations," says Perry MacKenzie, PPP Chairman. "It is incredible that we are now in this position."
"We developed this share offering under strict Saskatchewan Securities Commission guidelines and incurred considerable expense in this endeavour. Then the share offering had to be stopped and the money had to be returned to the contributors after the CWB informed us that we did not conform to the NGC policy," says MacKenzie.
“After months of discussion with staff and directors, no one informed us that we were outside of the NGC policy, which had been developed in 2000.”
Ironically, most of the durum that DGPC was going to buy was to return to Canada in the form of a new low-carb pasta that the plant is beginning to produce for Canadian and U.S. grocery chains. Now, this low carb pasta for Canadian consumers will be made with American durum.
"We feel that we should be working together as a team due to the fact that DGPC specifically requested to work with PPP because of its marketing strategy that involves producers and their production techniques in a “field to plate” system.”
"This has been a serious blow to value-added endeavours all across Western Canada at a time when we need all the value from our commodities that we can extract.”
“There is a grain business out there that needs to be done and it seems to PPP that the operations staff at the CWB are more interested in policy and politics than selling grain.”
June 24, 2004 - For Immediate Release
Western Canadian Durum Farmers Blind-Sided By Canadian Wheat Board
A group of Western Canadian farmers who followed all the rules in setting up a successful value-added venture for their durum wheat are now discovering that they cannot proceed because of a technicality with the Canadian Wheat Board (CWB) new Generation Co-op (NGC) policy.
Prairie Pasta Producers (PPP) is a new generation co-operative aimed at bringing the power of integrated "field to plate" value-added processing to Western Canadian durum growers. These Canadian farmers began discussions with Dakota Growers Pasta Company (DGPC) of Carrington North Dakota several years ago after both groups expressed mutual interest in working together to add value to Canadian durum by processing it into pasta for Canadian and American consumers.
On June 1, 2004 a share offering closed that was in conjunction with an offer to purchase DGPC shareholders’ preferred “D” shares. Each share gives the PPP member the right to deliver one bushel of durum per year to DGPC. The transaction was conducted with the full knowledge of the CWB and done according to the CWB's NGC policy.
Shortly after the share closing PPP received written notice from the CWB that they did not qualify under the NGC policy rules because the processing was to take place outside of Canada, which effectively killed the share offering.
PPP says there is not any clear mention in the CWB's NGC policy that it is only for Canadian processing.
"We've been dealing with the CWB for years on this matter, fully disclosing the direction we were taking with DGPC. We have had many meetings with them to ensure we were working with them instead of in violation of their regulations," says Perry MacKenzie, PPP Chairman. "It is incredible that we are now in this position."
"We developed this share offering under strict Saskatchewan Securities Commission guidelines and incurred considerable expense in this endeavour. Then the share offering had to be stopped and the money had to be returned to the contributors after the CWB informed us that we did not conform to the NGC policy," says MacKenzie.
“After months of discussion with staff and directors, no one informed us that we were outside of the NGC policy, which had been developed in 2000.”
Ironically, most of the durum that DGPC was going to buy was to return to Canada in the form of a new low-carb pasta that the plant is beginning to produce for Canadian and U.S. grocery chains. Now, this low carb pasta for Canadian consumers will be made with American durum.
"We feel that we should be working together as a team due to the fact that DGPC specifically requested to work with PPP because of its marketing strategy that involves producers and their production techniques in a “field to plate” system.”
"This has been a serious blow to value-added endeavours all across Western Canada at a time when we need all the value from our commodities that we can extract.”
“There is a grain business out there that needs to be done and it seems to PPP that the operations staff at the CWB are more interested in policy and politics than selling grain.”
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