A five-year-old pasta project that was nearing a boil has been placed on simmer again.
A group of about 200 prairie durum growers said it was “blindsided” by a Canadian Wheat Board ruling that killed a deal to buy a portion of North America’s third largest pasta plant.
Prairie Pasta Producers has been attempting to build or procure a durum mill and pasta plant since 1999, but the group’s plan has been thwarted by a series of setbacks that includes a previous dispute with the CWB.
The latest proposal was to purchase shares in Dakota Growers Pasta Co., a plant located in Carrington, North Dakota. Members of Prairie Pasta had an option to buy up to three million D-series shares of the company, which expired on June 1, 2004.
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Prairie Pasta chair Perry MacKenzie didn’t have a final tally but believed the group had enough commitment to acquire the minimum one million shares to proceed with the option.
Shortly after the offering closed, the group received the bad news that it would not qualify under the wheat board’s new generation co-operatives policy.
Since the shares had been sold under that very premise, all the cheques had to be returned and the project is once again dead in the water.
“It is incredible that we are now in this position,” said MacKenzie.
The timing of the CWB’s decision particularly annoys him.
“After months of discussion with staff and directors, no one informed us that we were outside of the new generations co-operative policy, which had been developed in 2000.”
CWB director Larry Hill, who has been one of the agency’s liaisons with the durum growers, was disappointed and surprised that board staff couldn’t find a solution to the impasse.
“I really don’t understand why we couldn’t have ironed this out in time. Clearly it’s unfortunate.”
Hill said the dilemma lies in the fact that growers would be investing in an American pasta plant when the policy was developed to promote processing in Canada.
“There’s no question about that.”
But MacKenzie points out there is absolutely no mention of that requirement in the policy, something Hill said is an oversight.
“The whole thrust of the policy was for processing in Canada when it was developed. Possibly that was just assumed to be part of it and wasn’t written in,” he surmised.
Hill believes the Prairie Pasta negotiations have been plagued by poor communication on both sides pledged to work toward finding a new solution to “regain the situation” with Dakota Growers.
MacKenzie agreed there has been a lack of information sharing. He laments the demise of the share option because the group incurred “considerable” legal and communication expenses.
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news he categorized the failure of the project as a serious blow to western Canadian value-added endeavours.
“There is a grain business out there that needs to be done and it seems to Prairie Pasta Producers that the operations staff at the CWB are more interested in policy and politics than selling grain.”
MacKenzie said Prairie Pasta’s board of directors is not willing to disband, but is unsure of its next step.
