16 August 2009

Great Gambols with Public Money: Sprung Cukes 2

Another view of the Peckford Pickle Palace, this time with some questions which proved to be prophetic.

Don't forget that at the time, supporters of the regime du jour accused journalists and other who questioned the wisdom of such schemes as being pessimistic and too negative to be worthy of any consideration.

It seems everything is being recycled these days including the Fanboy arguments.


“Peckford pummelled over greenhouse funding plan”

The Financial Post,  November 2, 1987

by Philip Mathias


Newfoundlanders are puzzled by Premier Brian Peckford's decision to commit $11.4 million in government funds to a huge experimental greenhouse.

Greenhouse experts are equally mystified by Peckford's loyalty to what many feel is a far-fetched and overpriced scheme. Even in Newfoundland, one government specialist advised against the scheme.

The province's media and opposition parties are pounding Peckford, and cucumber jokes have multiplied. The $18.4-million Newfoundland Environponics Ltd. project is a 6.4-acre greenhouse being built outside St. John's. Plants will be grown hydroponically on racks - in other words, without soil, in a slow-moving nutrient solution.

The greenhouse, due to start up this month, is meant to make Newfoundland self-sufficient in cucumbers and tomatoes, which are now mostly imported.

The joint owners are the province and Philip Sprung, who also owns a Calgary company that manufactures marquees. Sprung is said to be putting $4 million of cash and loan guarantees into the St. John's project.

Sprung is a self-educated horticulturalist who says he has the key to revolutionary greenhouse technology. The big question is whether he is far ahead of conventional horticulture, or badly out of step with it.

Among Sprung's early ventures was a greenhouse in Calgary. It suffered, he says, from hydrocarbon vapours rising out of the soil, which had been underneath an old oil refinery.

Sprung offered to relocate the greenhouse in Quebec and then on Prince Edward Island. Both provinces declined his request for funds. The project was also given the thumbs down by the National Research Council and the Department of Regional Industrial Expansion. '

Sprung's next stop was Newfoundland. The province's agriculture branch wrote a critical report on the project.  Nonetheless, Sprung was welcomed by Peckford and his cabinet.

The provincial government has agreed to provide $3.5 million in equity (land and cash); a $7-million loan guarantee; and a $900,000 provincial sales tax rebate. The unit now being built in St. John's is Sprung's Calgary greenhouse transported holus-bolus to Newfoundland.

Peckford may soon face some tough questions:

  • How does the premier justify the $18.4-million cost of the greenhouse? 

The most advanced greenhouses being built elsewhere, experts say, cost half what's being paid by Newfoundland.  The province could probably buy two proven, conventional greenhouses for the price of Sprung's one.

  • Can the greenhouse achieve the phenomenal yields projected by Philip Sprung?

He has told the government it will produce seven million pounds of vegetables on 6.4 acres. This yield is 2 1/2 times the best commercial yields in Canada.

Sprung's secret is to pack his greenhouse with three times as many plants as a regular hydroponic model. A hot, humid, jungle-like environment is maintained constantly. Simple arithmetic says three times the plants equals three times the yield.

Horticultural experts say it's not that simple: Yields fall off sharply at high plant densities. Professor Andre Gosselin of Laval University says, ''Sprung's yields are biologically possible, but I doubt if he can get them.''

Professor Herman Tiessen of the University of Guelph adds that Sprung's projected yields are ''unrealistic.''  Sprung recently severed connections with a British ex-partner Soil-Less Cultivation Systems Ltd., which claims to be the technical and managerial brains behind the system.

Sprung is reported to be looking for a new manager. If one cannot be found who is versed in his unusual technique, yields may be lower than promised.

  • -Can the greenhouse be economic at lower yields?

The cost of growing tomatoes at the highest yields obtained at research stations would be about $1.75 per lb., using Sprung's capital and labour inputs. The price of tomatoes in Newfoundland (less retail and wholesale markups) is $1.05-$1.45 per lb. In other words, the cost of Sprung's process seems to be far above probable selling prices.

Sprung claims his yields will be much higher than those achieved at research stations.

  • Can Sprung maintain projected levels of employment?

The province has been promised the greenhouse will provide jobs for 150 people - more than three times the industry average for hydroponic greenhouses.  If yields turn out to be anything other than phenomenal, the economics would be improved by reducing employment levels to the industry norm (about 40 people for 6.4 acres).

That might raise questions about the wisdom of the Peckford government advancing $11.4 million for the project. Unemployment in Newfoundland is officially 18%, unofficially about 28%.

  • If the greenhouse proves uneconomic, will the province pour even more cash into the project?

Peckford's critics and other commercial greenhouse operators in the Atlantic provinces fear it will.  Critics complain that Peckford has veered away in the Sprung case from regional development guidelines laid down by the 1986 Newfoundland Royal Commission on Employment and Unemployment.