Deep in the bowels of Toronto's cluttered courthouse are a couple of files that put Ontario's venerable tradition of agricultural co-operatives in a rather un-co-operative light. 93 CQ 45261. Srebot Farms Ltd. and Borcsok Farms vs. Bradford Co-operative Storage Ltd. Translation: two Bradford co-op members are suing their own co-op for not buying their own produce.

It hasn't been an easy decade for farm co-operatives in Ontario. With the concentration of farms and multinational farm suppliers, the model of the grassroots co-operative appears archaic to today's big-business agriculture. Where co-operatives once gave farmers strength in numbers, these days there are few numbers to speak of. Often born in bad times, co-operatives are a tough sell in today's buoyant cash crop market.

Casting a pall over the Ontario co-operative movement was United Co-operatives of Ontario, whose long-overdue death late last year brought to an end an Ontario co-op success story that spanned four decades. In its final days, UCO, once the flagship of the Ontario co-operative movement, was losing a reported $2 million a month. Lenders ended up writing off almost $30 million, and selling the assets to an American co-operative.

More recently, there was the failure of the Ruthven-based Mar-Brite Foods Co-operative, which reached a deal in principle to sell the plant and equipment to a private juice company from Quebec.

Based as much on faith as on finances, co-operatives are a difficult mix in today's profit-driven economy. In the case of Mar-Brite, 300 farmers couldn't swim in the world market awash in 99-cents-a-can apple juice.

In the Bradford case, the co-operative's packing subsidiary is turning a handsome profit - and is being called to account for it in a $1-million lawsuit by two co-op members who argue in their claim that its duty was to buy their onions, "not to operate...on a profit basis."

There are many in Ontario, however, who are keeping the co-op faith. Despite some turbulent years, co-operatives are well positioned to keep pace with fast-changing markets, they say: the face of co-ops may be changing in the 1990s, but in these days of Lone Ranger farmers, they still have a place.

For every failure, there are five success stories: small niche co-ops marketing everything from emus to organic milk; large farm supply co-ops with sales in the nine digits; and vertically-integrated co-ops, such as the ethanol co-op in eastern Ontario which will be up against multinationals such as Cargill and Archer Daniels Midland.

"There is a future for the co-operative movement in Ontario," says Grand Valley dairyman Eugene Lammerding, who, as UCO director from 1985 to 1994, watched from the board room as the ship slowly sank. Many co-ops today have evolved from their role as marketplace watchdog, he says: "Co-ops are more entrepreneurial. Before, they were trying to right a wrong....I think there's going to be a bigger need for co-ops."

At last count, there were 113 farm-related co-operatives in Ontario, according to figures from George Alkalay, who monitors co-ops for the Ontario Ministry of Finance, which regulates them - from the Canadian Emu Co-operative, to the Hensall District Co-op, with $100 million in sales, 22nd overall among all Canadian co-operatives.

In Agriculture Canada's Co-operative Secretariat 1994 top 50 list of Canadian Co-operatives, seven are Ontario farm co-ops, of which four are newcomers: La Co-op de Pointe-Aux-Roches ($52.5 million in sales), Orford Farmer's Co-op ($47.8), Waterloo-Oxford Co-operative ($44.3), and Simcoe District Co-op Services ($43.2).

Of the 414 farm processing, marketing and supply co-ops reporting in 1993, the latest data available, 54 came from Ontario, with a total $842 million in sales, 2,300 employees and a $46-million payroll.

Overall, profits are up for co-operatives across Canada. Weston-based dairy co-op Gay Lea Foods broke $200 million in sales last year, posting a record $4.5-million profit, says chairman and Owen Sound dairyman John Hill. Granby, Quebec-based dairy co-operative Agropur, which fills one of every four yogurt containers in Canada, hit $31.3 million in profits last year, a 76-per-cent increase, on $1 billion in sales. Struggling Co-opérative Fédérée de Quebec posted a $12.7-million profit on sales of $1.5 billion.

Williamstown cash cropper Bud Atkins, president of the Seaway Valley Farmers Energy Co-operative, has no illusions about competing with corporate giants. But he thinks farmers are up to the challenge: "If you had told me three years ago that a dozen farmers would sit down in a kitchen and end up building a $48-million plant, I would have shook my head."

With 1,800 members paying $2,500 to $40,000 each, the ethanol co-op has strong grassroots support, but Atkins knows it will take more than farmers' piggybanks. "It's a little different on Bay St., a little more cutthroat. But we know what we're dealing with....Ethanol is a worldwide business. We're going up against some of the biggest companies in the world....You have to have the right people, and that's very difficult....You can't have a dozen farmers running an ethanol plant."

Co-operatives are simply "another business organization," says Tony Tenwesteneind, with the Ontario agriculture ministry's food industry competitiveness branch. Tenwesteneind, who has helped set up co-ops, says they can respond quickly to changing markets. They're "way more responsive than a marketing board. I don't care if you quote me on that, it's fact."

"Co-ops can be a flexible and fast organization for people who want to move ahead....That's a very right-wing attitude....Some think co-operatives are socialist organizations."

Asked for some success stories, Tenwesteneind points to the Niagara-based Seaway Fruit Co-op, which along with the Vineland Co-operative now markets up to three-quarters of all Niagara peaches. Where does that leave the tender fruit marketing board? "I leave that up to you," Tenwesteneind replies.

Another newcomer is Orillia-based Great North Marketing Co-operative, which started two years ago, and in its second year has sold 1,400 deer, $650,000 in venison alone. The co-op's 32 members, such as fallow deer producer Pat Martin of Fergus, pay $5,000 each. Martin, who joined last year, describes the co-op as "farmers getting together and making things happen. We were doing fine, but there was a lot of work to be done. We felt there was strength in numbers."

For the once-mighty United Co-operatives of Ontario, which officially declared bankruptcy late last year, there was little strength to be found in numbers. Atkins says UCO, once a formidable empire with 45 member co-ops across Ontario, has left "a bad taste across the province."

When asked for a post mortem, former board member Eugene Lammerding doesn't point the finger at anyone. "In the end, there was enough fault on all sides to go around," says Lammerding, who served on the UCO board. "A lot of poor reactions to a lot of poor decisions. Divine intervention itself might not have saved UCO, the last victim of the '70s to finally lie down and die."

From his view in the boardroom, Lammerding says "it seemed as if we were always in a state of crisis management. Instead of drawing in, looking to our core business as the sure but steady way out, we got into weird stuff, looking for a quick fix.

"In the middle and late '80s, we did some incredibly dumb things."

UCO also lost faith with its employees, Lammerding says. "We were never able to win that back. I think everybody just got tired, morale was poor, and there was a lot of second-guessing and suspicion. No one was having any fun."

At its peak, UCO had 2,500 employees, but being a "farmer-run organization, it was tight with the money....There had to be 35 to 50 wrongful dismissal suits going on at any one time." As a result, when many of the employees were picked up by the member co-ops, they showed little warmth for UCO. "If member co-ops had shown the same loyalty to UCO as they do to Growmark, it might have survived," Lammerding says. "Talk about pissing in your own pool."

Keeping major creditors happy and on-line became the major preoccupation, he says. "The trade credit was our biggest balancing act....We had a $4-million boatload of fertilizer waiting to be unloaded in Hamilton harbour, [while] the banks were bringing us to the edge for another view. They stuck with us right to the end, though."

While performing the last rights for Essex-county-based Mar-Brite, a 300-member apple juice co-operative, founding chairman Gerry Long of Delaware would rather talk about vegetables. Thanks to the 73-member Ingreen Valley Foods Co-operative, 8,000 acres of contract vegetables are going in the ground this spring, he says. Working in partnership with Cobi Foods, the co-op helped saved the frozen vegetable plant, Long says.

He's also proud of the Progressive Pork Producers Co-operative, although admits it "has a long way to go." With 400 to 500 producers signed up, 3-P is going to have to look for a new meeting place, having outgrown the Komoka community centre. And when they do meet, there are no martini lunches, Long says: "It's interesting to watch grown men eating out of lunchbags. Some hadn't eaten out of brown bags since school. There's a lot of togetherness. We're there to do business, not there for a day out. This isn't government."

As for Mar-Brite's failure, Long blames the trend away from 48-ounce apple juice tins which the plant produced. "The business has adjusted," Long says. "It was an excellent idea when it happened, but the bottom line is the last two years we haven't been able to put up the pack because of other needs for juice.

"The kids of the nation are drinking bellywash....Tapwater doesn't cost much these days. Everything is price, price, price."

If members found better prices outside the co-op, Long says he couldn't blame them: "Forty-eight-ounce cans of juice at 99 cents don't bring much to the farmer."

Rougemont, Quebec-based processor A. Lassonde, Inc., is in the final stages of purchasing the Mar-Brite machinery and equipment. President Jean-Paul BarrŽ doubts whether farmers should have gotten into the juice business in the first place. "It isn't easy," he says. "Each one to his own job. We are in food processing. We are not in farming."

Long-time general manager of the Norfolk Co-operative, Keith Collver, watched the Mar-Brite failure with little surprise. "It's the old story - members of the co-op not always abiding by the membership agreement." He says he kept the Norfolk co-op out of the juice business for a reason: it's capital-intensive, and there's a highly-competitive world market for concentrate.

"The moral of the story is if the co-op isn't performing or can't perform as well as the competition, then the competition is more likely to take over," Collver says.

Successful co-ops need good people at the top, he says: "They really require the services of a dictator."

Farmers, meanwhile, should "do no more than is necessary to get rid of their product to the first buyer. If he can't make a profit selling wheat to his grain elevator, there's no need for him to build a big elevator system unless he's a huge producer. All that will do is build up debt, and the big boys will come along and clip his ears."

After 35 years in the business, Collver is pessimistic about the future of farm co-ops. "I've been in the movement all my life. I'm disappointed. I think I can see the writing on the wall that the co-operative movement for basic producers is virtually finished."

When co-ops do prosper further down the food processing chain, there are conflicts, as in a three-year-old lawsuit involving the 50-year-old Bradford Co-operative Storage Ltd., founded 50 years ago to store and market members' produce. Two of its members, Srebot Farms Ltd. and Borcsok Farms, are seeking over $1 million in damages, claiming that the co-op and its packing subsidiary violated the Co-operative Corporations Act by failing "to adequately market and sell the plaintiffs' onions in the spring of 1993" and selling U.S. onions instead, "in conflict of interest with the plaintiffs who had competing produce available for sale."

As a co-operative, Bradford co-op owed "a duty of care to do business with the plaintiffs on a co-operative basis," say the growers, who ended up dumping the onions.

In their statement of defence, the co-op, packer - Bradford and District Produce - and its general manager argue that Bradford Produce did offer to buy the onions, but price was an issue. The co-op was not responsible for the actions of the packer, they say, nor was the packer bound to "act as an agent" for the growers, avoid buying competitive product, or avoid turning a profit. The case is moving slowly, and hasn't yet reached the discovery stage.

While he's seen the co-op concept go terribly wrong at UCO, former president Murray Allen is optimistic. The new owner, Illinois-based co-operative Growmark, posted a $500,000 profit in its first year in Ontario last year, on sales of $134 million.

"We have 12 million people involved in co-ops in Canada. That is a mighty force. If that was lost...we would be at a major disadvantage....It's working and working well," says Allen, an Alfred dairy farmer who was president of UCO in 1990 and 1991. Former UCO director Lammerding is equally positive. Once UCO divested itself of its retail system, allowing Growmark to take over, "the co-operative system was able to move on successfully.

"It's all history now. The Ontario agricultural co-operative system has moved on, and that's the really important part."

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Info overload on ostriches

By ROBERT IRWIN

Whether or not you consider ostriches legitimate farm animals, you should study Steve Warrington's award winning Ostriches Online http://www.achiever.com/ostrich/index.html if you are thinking of marketing farm products on Internet.

The Owenlea farm homepage http://www.bright.net/~fwo/ has earned 40-year veteran Holstein breeder and cattle dealer F.W. Owen wide recognition. Owen's opinionated style and austere lay-out contrast with Warrington's glossy pitch, but I suspect both turn a profit from their Internet efforts.

"When you meet people in cyberspace and invite them into your office they are looking for as much information as possible before doing business with you," explains Warrington. His site offers over 500 pages of information about ostriches.

One section is a well-organized technical database for farmers, extension workers and veterinarians. Web visitors can buy, sell, or trade meat, hides, leather products, feathers, dusters, as well as books and software.

Warrington says he has exported ostriches to over 70 countries. His site appears aimed at investors who aren't necessarily hands-on stockmen. Owen's site is better suited to those who do get their hands dirty, however his passion for grazing is controversial among conventional dairymen.

Owen, who farms near Homerville, Ohio, says he makes more money now with a simple low-cost structure, milking 30 cows, than when he milked 300 head three times a day. Simplicity is the key to his web site too. He provides solid information and links without time-wasting graphics.

Content includes a list of all active AI sires with American proofs and a 30,000k file on grazing technology. There is hard hitting opinion too.

One piece slams cheating on milk recording and genetic evaluation. There are articles and links to animal cruelty sites and anti-milk propaganda.

Advertising experts measure the success of an ad by how well people remember the product being promoted. You won't forget the Owenlea homepage.

I've written previously about the one-third of rural Ontarians who are stuck with party lines and can't get on Internet. Rogers latest pilot project in Ontario, using cable television lines, provides extremely high-speed connection but probably won't help most party line victims because they don't have cable either.

Perhaps isolated areas could benefit from wireless modems like the ones used by Metricom at eight American Universities. Details are available at http://www. metricom.com. The project uses low-power unlicensed equipment operating on the same frequencies used by cellular phones and garage door openers, but in the United States, Federal Communications officials have plans to assign frequencies for higher power, longer-range units.

A common sense guide for parents and children using the Internet is available on the Web at http://www.larrysworld.com/child_safety.html The site is sponsored by the National Centre for Missing and Exploited Children and the Interactive Services Association with support from the United States Justice Department.

Concise definitions for computer related acronyms and abbreviations are now available free from a mailing list. The address is LISTSERV@VM.TEMPLE.EDU Leave the subject line blank. In the body of your message type: get babel96b txt help-net Ontario Corn Producers launched their web site recently http://ontariocorn.org.
Your comments, flames, favourite sites and software suggestions are always welcome at rirwin@hawk.igs.net.