Farmers pursue legal action after Purely Canada Foods voided gluten-free oat contracts last year due to equipment failure
REGINA — The company that cancelled gluten-free oats contracts last year said it was surprised by an article stating that farmers are pursuing further court action.
Purely Canada Foods chief executive officer Tyler West said in an email last week that nothing had changed in terms of court filings or processes.
“We completed mediation and both parties understand each other’s positions,” he said.
“We cannot disclose any details but are hopeful that resumed mediation in late February-March may yield a solution.”
Read Also
Farming Smarter receives financial boost from Alberta government for potato research
Farming Smarter near Lethbridge got a boost to its research equipment, thanks to the Alberta government’s increase in funding for research associations.
Twenty-seven Saskatchewan farmers are involved in the court case that centres on 2022 contracts that weren’t honoured. They issued a news release Jan. 8 saying they were moving ahead with court action.
Purely Canada in March 2023 wrote to the farmers to say their contracts were void because it didn’t have the equipment available to process it. It declared that the force majeure clause applied.
However, the farmers said growers weren’t able to get out of 2021 production contracts when drought resulted in poor yields so they didn’t understand how that clause could be used in this case.
Oats for the gluten-free market must be kept extremely clean to prevent contamination with wheat, barley and rye that do contain gluten. Growers receive premiums for the extra steps they have to take to sell into that market.
In this case, the farmers said they could have received $8.50 to $9.50 per bushel through their contracts and are claiming lost income of nearly $60 million over a five-year contract term.
Purely Canada said a third party had been contracted to process the oats and its equipment failure caused the problem. It also suggested the damages were excessive and that some of the plaintiffs had overstated how much oats they had produced.
Purely Canada is based in Lajord, Sask., and is a division of Above Foods, which bills itself as the regenerative ingredient company. The CEO of Above Foods is Lionel Kambeitz.
In July 2022 the company announced it had opened a strategic oat collection facility in the Carrot River basin of northeastern Saskatchewan, where it would add more than one million bushels of gluten-free storage and processing. It also has a quinoa program.
In August the company announced it had entered into an asset-purchase agreement with NRGene Technologies Ltd. from Israel to buy artificial intelligence-based genomic assets, intellectual property and trait development technology licensing rights.
