Cooperative establishes checkoff to grow Ontario biomass sector

By Katie Fletcher | June 09, 2016

Ontario Biomass Producers Cooperative Inc., a group of Ontario farmers producing and marketing biomass, recently launched an effort to make it easier for its members to sell the miscanthus and switchgrass they produce to various markets. 

The cooperative adopted a central-desk selling system and checkoff collection mechanism to help connect biomass producers and buyers. The central-desk selling system will be used to develop an advertising strategy to give the cooperative’s members the opportunity to potentially sell into multiple markets and for the markets to go to one place to source material, said Larry Davis, vice president of business with the Ontario Biomass Producers Cooperative. “It’s an information gathering source,” he said. “Producers can learn who the buyers are and what they are using it for and the grower themselves can put their information on a website. It’s just a way for everybody to know what material is out there and how much is available at any one time.”

Since April 1, when the selling system and checkoff program were adopted, Grey County Agricultural Services has been collecting and putting together data provided by the producers, which will eventually be available online. The cooperative will compile production and sales reports from producers each spring to help sell the product and determine producer’s checkoff contribution.

The checkoff fee is 0.25 cents per pound of biomass. Growers will submit their sales through Grey County Agricultural Services and the cooperative’s treasurer will invoice them for the checkoff fee they owe. Although there has been some pushback about paying the fee, Davis said many just need the reasoning behind the checkoff payment explained to them. “You need money to operate a business, and that’s what this is,” Davis said. “Technically, we want that money to come out of the market, it doesn’t necessarily have to come out of the farmer’s pocket.”

Davis shared that the money will go toward advertising; maintaining the website; supporting secretaries, the board of directors and research conducted by the University of Guelph and others; and anything else it takes to manage the central-desk selling system and grow the biomass sector.

According to Davis, the whole idea of growing the market for biomass in Ontario dates back to when the coal-fired Nanticoke power generation station planned to switch to biomass. Although that facility was mothballed, Davis said there are plenty of other opportunities for biomass-based energy and pelletized biomass fuel. “The industry is young and there is lots of potential,” he said.

The strongest market for the cooperative members’ biomass currently is for bedding. “Everything is sold out pretty much as soon as we get it for many uses, and bedding is the primary use right now,” Davis said.

Another development in the province is the announcement that Ontario’s Ministry of Environment and Climate Change finalized rules for its cap and trade program to limit greenhouse gas pollution. “Biomass is a crop that will sequester carbon, and we see it as a positive for climate change,” Davis said.