Greenhouse flower growers set up private sector risk management fund

Friday, March 21, 2014

by SUSAN MANN

Ontario greenhouse flower growers will have a private sector risk management fund by next year to compensate them for lost product and business interruption if their operation is quarantined by the Canadian Food Inspection Agency.

The fund, called GreenCHIP, is being developed by Flowers Canada Growers Inc., a national organization that represents greenhouse floriculture growers. Federal and provincial governments are helping the organization with the project through AgriRisk Initiatives under Growing Forward 2, which supports the research, development and implementation of new risk management tools for the agricultural sector, the federal and provincial governments say in a March 18 press release. Ontario is providing more than $600,000 to help develop the GreenCHIP project. Its contribution to the project was announced Tuesday.

Jamie Aalbers, research director for Flowers Canada (Ontario), says the business plan and model for the GreenCHIP fund are both developed. So is the underwriting model, but it needs updating. The fund will likely be up and running within a year.

Flowers Canada (Ontario) represents any grower in the province with greenhouses bigger than 20,000 square feet and has 240 grower members.

The GreenCHIP fund “will be an industry-led risk management tool for quarantine protection for flower growers,” Aalbers says, noting it will be voluntary for growers to buy coverage and pay an annual premium based on the types of plants they want to protect in their greenhouse.
 
It’s hard to say how many growers will use it, he says. But part of the government funding will be used to see how much interest there is among growers.

Organizers are aiming to start the project slowly and build it up. “We’re looking to target 30 per cent of the growers,” Aalbers says, noting the GreenCHIP fund will be launched in Ontario as a pilot project and eventually it will be expanded through the national organization, Flowers Canada Growers Inc., into other Canadian flower growing regions, such as British Columbia.

“It’s designed to give growers an opportunity to clean up right away and get right back into business,” he says. “They will lose some sales, of course, and they will have to rebuild that on their own.” The fund will help the industry as a whole, too, because quarantined greenhouses will be cleaned up right away so “there’s less likelihood something will spread to another farm.”

The premiums will go into the fund. It will be managed by an elected board of directors from the people who are paying into the fund.

Aalbers says there’s a need for this type of fund because when the Canadian Food Inspection Agency implements a quarantine, growers don’t receive compensation under the Canadian Plant Protection Act and must shoulder the financial loss themselves. But farmers of other commodities, such as livestock, do receive government compensation when their farms are quarantined and their animals are ordered destroyed by the agency.

Agency-ordered quarantines don’t happen that often, he notes. There was a big quarantine in 2005 that affected five to six Ontario growers “and it had a very large financial impact on those growers because they had to destroy their crops that were affected and then start over again.”

Greenhouse flower growers could face losses of $500,000 to $1 million if an entire greenhouse is quarantined, he says.

Agency spokesperson Lisa Murphy says by email there weren’t any quarantines of greenhouse flowers in 2013. But the agency “may quarantine a greenhouse when a pest of significance is detected at a Canadian greenhouse.” The pests of significance are regulated by Canada under the Plant Protection Act.

Ontario is the third largest producer of greenhouse floricultural products in North America after California and Florida, the government press release says. Ontario also represents 50 per cent of greenhouse flower production in Canada. Floriculture products include flowering potted plants, annual spring bedding plants, container-grown perennials, spring flowering containers and cut flowers in heated greenhouse and freestanding hoop houses. Most production in Ontario is in the Niagara region. BF