Hog plant owed farmers hundreds of thousands

When the Natural Organic Food Group plant in Charlottetown went into receivership last week, it owed hog farmers hundreds of thousands of dollars.

Provincial Treasurer Wes Sheridan told CBC News Monday the hog plant, which processed hogs from P.E.I., New Brunswick, Nova Scotia and Quebec, stopped paying farmers weeks before it lost control of the company.

"That's one of the things that really stings us about this group. We've struggled with some of their morals to this point," said Sheridan.

"They've really ridden the backs of the hog producers for the past three weeks when they tried to stay in business. So what they did was bring the hogs through and not pay the producers."

The government's calling in of a $1.5-million loanled to the plant going into receivership.

According to Sheridan and court documents, by the time NOFG went into receivership, it owed P.E.I. hog farmers $906,000. The government appointed a receiver last Monday and late last week cut cheques for P.E.I. farmers worth $660,000.

'Those announcements made an already aggravated situation far worse.' Scott Dingwell, company shareholder

It is not known how much farmers outside P.E.I. were owed.

Scott Dingwell, one of the Island investors in NOFG, admits farmers weren't paid.

But he blames the government for the worst of the troubles because it announced that it wouldn't be investing any more money into the plant and that the file was being handed over to the auditor general.

"Those announcements made an already aggravated situation far worse," said Dingwell.

"With a struggling company and with talk of receivership, it created a financial situation that was already in bad shape to become worse."

Dingwell said NOFG continued to accept hogs at the plant because the company believed in the worst-case scenario thegovernment would ultimately step in and pay the farmers.

Plant needed upgrades

Court documents connected to the receivership also revealed it was operating while in contravention of Canadian Food Inspection Agency rules.

Sheridan said the CFIA problems are not related to the quality of pork being processed at the plant.

"None of the changes that have to take place have anything to do with safety on the food quality. It just has to do with the building itself and the upgrades that CFIA is in charge of," said Sheridan.

Dingwell said CFIA inspectors were at the plant on a daily basis when they were running the operation, and negotiations were under way with the CFIA to work out a plan to get the required upgrades done.