© AgMedia Inc.
by BETTER FARMING STAFF WITH FILES FROM MIKE MULHERN
Was PKI a so-called Ponzi, a scheme that’s doomed to fail when the supply of money from new investors fails to keep ahead of payments to existing investors? If so wasn’t it obvious to those approximately 1,000 farmers who invested? That’s a question that divides even those of the same political stripe.
Ernie Hardeman, MPP for Oxford, a former agriculture minister and currently the Progressive Conservative agriculture and food critic, says “it really wasn’t a scheme,” if Pigeon King Galbraith had followed through on plans to build a processing plant.
Hardeman believes; “If you’re going to start a complete new product, you have to have the stock before you can actually start a processing plant; you have to have processing before you can start marketing your product.”
PC feathers fly
“That’s absolutely backwards, I’m disappointed in Ernie Hardeman,” says former PKI salesman Bill Top who recalls urging Hardeman to intervene to prevent more growers from being drawn in to Arlan Galbraith’s pigeon breeding scheme more than a month before it collapsed. Top who serves on the Conservative grassroots Political Action Committee (PAC) for agriculture, which Hardeman co-chairs, reasons that any new venture has to begin by developing a market before building up supplies and processing.
Top says one night after a PAC meeting at Queens Park he discovered Hardeman was a PKI fan and that he had friends involved. That’s when he says he tried to warn Hardeman. Top says he provided documents showing that the scheme was doomed to fail and he stressed that in the first 4.5 years of his venture, Galbraith never intended to raise birds for meat. “People have to realise that Arlan switched gears,” Top explains.
Top’s evidence of Galbraith’s original intention to sell pigeons endlessly with no real market is supported by another former PKI employee who contacted Better Farming earlier this week. Both say the processing idea was hatched because of rising public skepticism over the reason for breeding vast numbers of sport birds which had no purpose other than for sale to new investors in the breeding scheme.
Hardeman recalls the conversation with Top: “When we talked about it, he said it was a Ponzi scheme and somebody should be stopping it and I said, ‘Well I have some good friends that were in it who seemed to be very happy with what they were doing,’”
While Hardeman says he didn’t tell Top he thought raising pigeons for PKI was a good business, he said, “it was hard to say, because he had worked for them (PKI), that we should shut them all down when there were people who had them (pigeons) who seemed to think that everything was running along pretty smooth.”
“I agreed with him (Top),” Hardeman said, “that I couldn’t see a positive result in the end. Unless you can put some processing in place you’re creating nothing that you can sell. I didn’t agree that it was a good business, I just said it was difficult to get the people who were buying in to go to them and say, ‘Oh, no, you can’t buy in because I think the thing is going to fall down.’
“All he could tell me or all that I could tell those farmers was the same as they already knew. ‘Well, we don’t have an end plan yet but it looks good so far.’”
Hardeman concedes: “I think everyone with him (Galbraith) had some kind of a sense that unless something changed that at some point it was going to fold.”
Government help needed
Hardeman reasons now that the Ontario Ministry of Agriculture, Food and Rural Affairs (OMFRA) should step in to help growers who want to start a processing plant. “I think it would be appropriate for the minister to look at what can be done to facilitate this group that wants to start some type of processing plant, if for no other reason than just to get rid of the birds we’re stuck with now. They’re not doing it based on a big profitable thing, if we can do it and put them on the market, at least we don’t have to bury them,” Hardeman says.
OMAFRA has responded to the crisis facing several hundred former PKI Ontario growers by publishing a list of existing processors who will handle birds on a custom basis. Growers have to pay for processing and find customers to buy their meat. Both Top and the other former PKI employee say they contacted OMFRA and urged staff to halt the scheme and warn investors more than a year before the collapse.
As for growers facing financial hardship: “Some of them may be into regular safety net programs based on cash flow on the total farm income so that the support programs may kick in for some of the producers at the end because of their losses in farming,” Hardeman says, adding, “I don’t know about that, whether that will actually kick in or not.”
Memories of Emus
Hardeman says the PKI situation is similar to situations a few years ago where farmers paid thousands of dollars for breeding pairs of Emus.
“They (Promoters) said you could use the oil, you could use the feathers. They said it was the only animal going that every part of it could be used but we didn’t have any processing capacity commercially to utilize them and as they got more and more of them for meat they had to be worth a lot less and as they got to be worth a lot less and didn’t have a market too much they just disappeared,”
Hardeman says his home is next door to a former Emu farm. “There’s no Emus. It wasn’t part of a bankruptcy and he didn’t euthanize em, he just went out of business. He just sold them, some of them for breeding stock but most of them for meat.”
Hardeman says you could take your Emu to the local butcher shop and use the meat if nothing else. “They at least had an end use.
“That’s where we are with these pigeons, no end use.” BF
