A company set up to kickstart Alberta’s agricultural industry has come under fire from MLAs who feel it isn’t working fast enough.
During a recent meeting of the standing policy committee on agriculture, MLAs questioned AVAC officials about what difference they’ve made to agriculture.
AVAC, originally called the Alberta Value Added Corp., was established in 1997 with $35 million in provincial government seed money to help meet the government’s goal to expand the added-value industry to $20 billion by 2010.
It says it has invested a little more than $12 million in 28 value-added companies.
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The not-for-profit company is designed to operate autonomously from government, although three non-voting government members sit on the board of directors.
Even though the government is not directly involved in the company, MLAs said they had a right to question AVAC officials because of the government’s $35 million initial investment.
“What difference have you made?” asked Carol Haley, who according to the public policy newsletter Alberta Scan has come under fire over AVAC investment progress.
Alberta Scan has also reported that MLA Albert Klapstein has said he has heard criticism of AVAC and its operation.
When asked for an interview, Klapstein replied that he had said enough on the issue.
Haley said AVAC “has come a long way.”
MLA Ray Danyluk said he wants to see value for the government’s money because value added is important to his rural constituents.
“When questions come up about how extensive is the use of AVAC, or how much they’re supporting, of course it’s a concern for me,” he said.
“I really believe for agriculture to add value to your product is a primary objective.”
AVAC chief executive officer Keith Jones said some of the criticism is justified. When the company was established, it had restrictions on how it could invest. Jones said it took almost two years to figure out how to distribute money within the guidelines.
“AVAC could not provide loans, equity investments or grants to for-profit companies and it took a little while to find a mechanism to invest in projects without violating the restrictions,” he said.
“Some of the political figures are concerned they put this money in place, but they don’t see you cutting cheques to see this happen.
“In the beginning everyone is enthusiastic and optimistic we’ve got this new organization that can now stimulate value-added growth. It definitely takes time to get started.”
Jones is the four-year-old company’s second president and CEO.
“We’ve got the people to do the job, plus now we’re able to be more clear how we will invest in those ventures.”
The company spent more money on administration in its first two years than it did on value-added investments. Jones said that’s because some projects may take 18 months of discussions before cheques are written.
Alberta Liberal and official opposition leader Ken Nicol said he believes agriculture’s value-added industry needs to be increased, but he worries the government is overstepping its mandate.
“If you’ve got a proven technology, a commercial venture capital market should be the testing ground for the expansion of that operation,” he said. “It’s almost like they’ve redirected their mandate. The government is slipping back into picking winners and losers. I’ve got less reservation with AVAC if it shows the viability of research. That’s a great role for a public-supported institution.”
Jones said AVAC is excited about its involvement in some research projects.
One of them is an Edmonton technology company that uses a cold press process to purify and clarify canola oil without using high-temperature solvent extraction.
It is also working on a pilot project to develop ways of manufacturing zanthum gum, which is used in many foods and products.
AVAC’s website is www.avacltd.com.
