In a joint statement, the Ontario Federation of Agriculture (OFA) and the Ontario Fruit and Vegetable Growers’ Association (OFVGA) have expressed disappointment and dismay at the Liberal government’s decision to arbitrarily raise hydro rates that will lead to a $42-million impact on the agricultural sector.
The Liberal government announced Monday that rates will rise in April, 2004, from the hydro cap of 4.3 cents per kilowatt hour to 4.7 cents per kwH for the first 750 kilowatts and 5.5 cents per kwH for everything else used.
“We met with Energy Minister Dwight Duncan, explained the position agriculture would be placed in if the rates were suddenly increased, and left thinking that something could be worked out. As it appears, that just wasn’t the case.” Said Ron Bonnett, OFA President.
Murray Porteous, the chairman of the OFVGA, said the government’s decision regarding the hydro rate increase has very little to do with conservation or improving the supply and flow of electricity.
“This is a huge blow to agriculture. Hydro is an essential component in agriculture, utilized by farms across the province for a variety of needs: greenhouse operation, cold storage, livestock (either heating or lighting), or just the everyday function of maintaining a business,” said Porteous. “We fought long and hard to ensure that agriculture was, and should remain, as small businesses when determining future rates – and this decision takes none of that into account.”
OFA and OFVGA, in a presentation to the Minister, called for a realistic rate based on the actual cost of power used by agriculture and other identifiable sectors. The presentation noted that farms use most of their electricity needs at lower cost, off-peak times.
Bonnett said that each 0.1 cent increase costs agriculture $3.5-million – at a time when net income is falling.
“We’re not asking for a freeze or for the cap to remain in place,” he said. “We understand the realities in that the price of electricity should more closely reflect its true cost and that the current cap, given the deficit, is unsustainable. We also agree that the price be regulated to avoid the chaos and price spikes that ran rampant under the earlier spot price marketing. But, farmers genuinely cannot afford an increase in power costs at this time.”
Porteous said challenges in agriculture are always present, but this year has been a particularly difficult one in terms of issues, problems, and crisis across the industry.
“I was particularly disappointed in the Minister’s announcement that there were no plans arrived at for the conservation of energy, just a huge increase that comes at the expense of anyone who actually uses hydro as a lifeline in business – like agriculture,” said Porteous.
Both agricultural organizations are seeking a joint meeting with Minister Duncan and Steve Peters, the Minister of Agriculture and Food, to discuss future options for the sector and its farmers.
“There are a number of ways that we can work together to uphold the interests of the province while maintaining the economic stability of our farming community,” said Bonnett. “While we are disappointed, we certainly want to work on solutions that benefit all.