The Saskatchewan government continues to lose money from its investment in the potato industry.
Financial statements released last week show Saskatchewan Valley Potato Corp., or SVPC, lost more than $500,000 in the six months it operated last year.
The corporation was formed after the potato division of Sask Water, known as Spudco, was transferred to the Crown Investments Corp. last May. Sask Water also lost $1.2 million during the six months it operated Spudco. That compares to a $9 million loss the year before.
Crown Investment Corp. minister Maynard Sonntag defended the government’s decision to stay in the potato business.
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“We’re getting much closer to breaking even,” Sonntag said. “We have an industry out there that employs a large number of people and is adding significant value…. You will see a corporation and a company that will have decent profits.”
The $505,542 loss recorded by SVPC is due mainly to restructuring, start-up and harvest costs. The sale of last year’s crop is continuing and revenues will be recorded in 2001 financial statements. The government still intends to sell SVPC at some point. Meanwhile, it continues to plant potatoes.
SVPC will grow 500 acres this year, up from 300 last year. The company will also contract 1,000 acres from local growers.
Richard Truscott, Saskatchewan director of the Canadian Taxpayers Federation, said he finds the government’s continued involvement in the potato industry frustrating.
“If there is a viable market, entrepreneurs and farmers will fill it,” he said. “It may all be well-intentioned, but ultimately I think it’s more risk and hassle than it’s worth.”
