Chapleau-‐Sultan Wild Blueberry Farm - Northeast Superior Forest
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Project Proposal: ChapleauSultan Wild Blueberry Farm Revised January 2013 Submitted by: Northeast Superior Forest Community 26 Pine St W Chapleau ON P0M 1K0
Transcript of Chapleau-‐Sultan Wild Blueberry Farm - Northeast Superior Forest
Revised January 2013
Submitted by:
The Proponent .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
The Land ... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Goal .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Capital Investment and Financial Summary ... . . . . . . . . . . . . . . . . . . . . . . . 28
Management skil ls/qualifications of proponent .. . . . . . . . . . . . . . . . . . . 29
Liabil ity Insurance Requirements .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
Contingency plan ... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
OPERATIONS
Field development .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
Other operational considerations .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
Fisheries and wetlands .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
Resource uses values .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
Forest management activities .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
Aboriginal traditional territories and land uses .. . . . . . . . . . . . . . . . . . . 48
POTENTIAL EFFECTS
Land use and resource management considerations .. . . . . . . . . . . . . 49
Social, cultural and economic considerations .. . . . . . . . . . . . . . . . . . . . . . 50
Aboriginal considerations .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
Mitigating Potential Effects to land use and resource management 55
Mitigating Potential Effects to social, cultural, and economic 57
Mitigating Potential Effects to Aboriginal considerations .. . . . . . 58
PUBLIC CONSULTATION
Planned consultation ... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
Project evaluation ... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
APPLICABLE POLICIES & APPROVALS
Strategic Framework ... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
APPENDICES
Appendix B: Integrated Pest Management Plan ... . . . . . . . . . . . . . . . . . . 70
Appendix C: Environm
EXECUTIVE SUMMARY
THE PROJECT
The Northeast Superior Forest Community (NSFC) in partnership with the Northeast Superior Regional Chiefs Forum has been building a new and exciting industry for the region. The development of the Chapleau-Sultan Wild Blueberry Farm has been a concept for the economic diversification of Chapleau area, as well as the wider Northeast Superior region that has been under development for more than 8 years. With primary concepts and partnerships developed through the efforts of the Chapleau Regional Development Corporation, the NSFC has been working diligently on turning this idea into reality.
We have seen the tremendous opportunities that emerge with the consideration of maximizing our forest resources and using them in a new way. The Chapleau-Sultan Wild Blueberry Farm is the first opportunity that puts planning into action. We all recognize that by bringing new users of forest resources into the economy brings with it the opportunity to help support our existing industry partners and to ensure that our communities in the Northeast Superior continue to grow and thrive. We need to continue to look for economic opportunities that are rooted in assets our area possesses like the blueberry.
Over the past several years we have been working to ensure this industry is one that can work for our area, is financially viable, and is sustainable for the long term. We knew at the onset that there are very dramatic upfront development costs associated with this type of farm, as well as a gap of up to 7 years between site development and the generation of a full crop. These were barriers that were identified early, and stressed the importance of undertaking our initiative with very intensive, thorough planning process and taking the time we need to make sure we are developing a concept that can work.
Once initial plans were identified as possible, this was followed by a Site Assessment study, which was tasked with looking within the region to find the best quality land for the development of blueberry farms. Of the properties identified, the Sultan flats area near Chapleau ranked as our largest quantity and highest quality of soil. This property has a great proximity to the highway, as well as the road network necessary to make this a prime candidate for blueberry farming. With the support of Tembec Inc. mill is fed through fibre that comes from this portion of the forest, we have moved forward with a clear and concise project plan for the Sultan area, as well as developed a business plan to make sure we are fully prepared for this undertaking.
THE PROPONENT
The Northeast Superior Forest Community is a not-for-profit economic development corporation that has been operating in the Chapleau region for the past six years. Our organization represents a partnership between the communities of Chapleau, White River, Wawa, Dubreuilville, Hornepayne and Manitouwadge, as well as the Northeast Superior Regional Chiefs Forum. NSFC has the mandate of seeking out ways of diversifying the regional forest based economy as a response to the forest sector downturn see over the past decade. One of our key areas of exploration is the field of Non Traditional Forest Resources with the strategy of finding new and innovative economic drives for economies that come from our forest resources.
THE LAND
We have requested the issuance of a land use permit (LUP) in order to establish interim tenure over the land in question and to allow us to begin the development process. In order to support this process we have developed this detailed project proposal as requested by The Ministry of Natural Resources. It is the responsibility of MNR, and other relevant provincial ministries and agencies to review the proposal in order to ensure consistency with applicable legislation and policy direction. This has been undertaken, the project is now required to undertake pubic and Aboriginal consultation
Projects, in order for a disposition of lands to occur.
HE CHAPLEAU-SULTAN SITE PRESENTS THE HIGHEST POTENTIAL FOR DEVELOPMENT DUE TO THE HOMOGENEITY OF THE LAND, THE LARGE SITE CAPACITY, ACCESSIBILITY, HIGH NATURAL DENSITY FOUND ON SITE, SANDY SOILS AND PROXIMITY TO A SUPPORTING COMMUNITY. THIS SITE IS CONSIDERED THE JEWEL IN THE CROWN THE CHAPLEAU-SULTAN SITE CAN PROVIDE SOME OF THE BEST LANDS FOR WILD BLUEBERRY DEVELOPMENT IN ONTARIO AND EVEN CANADA (NORTHEAST SUPERIOR FOREST COMMUNITY WILD BLUEBERRY FIELD ASSESSMENT REPORT
2011, LEVEL PLAINS ENTERPRISES
THE DEVELOPMENT STRATEGY
We are planning for 5 phases of development, with a 100+ hectares of land harvested and developed each year, in an effort to ensure costs and workload are manageable. With a 10-year development strategy in place, resources approved and allocated, this project is ready to move into active development with the support of Tembec, our local industry partner.
The project plan and proposal has taken into consideration the commitment of the NSFC and NSRCF to sustainable, environmentally conscious development. We have considered mitigation strategies for bears, and birds, as well as impacts on water shed, environment and existing land users. It has become a clear priority that this development will move forward as an enhancement to the daily way of life of residents, as well as a new economic driver for the region.
GOAL
To develop and establish the Chapleau-Sultan Wild Blueberry Farm as a world class production centre for wild blueberries.
PROJECT PROPONENT
The Northeast Superior Forest Community (NSFC) is the project proponent. The NSFC is a not for profit, forest sector based, economic development organization. The NSFC has a board of directors and a general manager directing project management staff. As an organization the NSFC is advocating and working towards the development of blueberry farms within the NSFC region as a way to diversify and reinvigorate the regional economy.
NSFC has secured funding to cover the administrative efforts and costs associated with establishing a tenure agreement with the Crown. Establishing tenure on the proposed areas for development on Crown land is the first step towards successfully developing and sustaining a commercial blueberry business. The long-term goal is to create a viable commercial blueberry development capable of attracting local entrepreneurs having the financial resources and business know-how to invest in a long-term agricultural venture with low or no payback for several years.
Once tenure is established, investors will be sought to invest in or take over the development of the farms as they are established. If this does not occur, the NSFC will continue to leverage funds to contribute to the substantial upfront development costs for the wild blueberry fields.
Once the Chapleau-Sultan Wild Blueberry Farm is more established, NSFC would continue to work towards facilitating the transfer of the business operation to a local entrepreneur or a regional Non Timber Forest Products Cooperative.
FOUNDATION
Although the wild Lowbush Blueberry is traditionally harvested and sold locally on a small scale in Northern Ontario, the region has yet to initiate commercial production operations that have provided established long-term economic benefits to several Canadian provinces. Recognizing this opportunity, NSFC launched an investigation into potential crop production areas across the region that exhibit key characteristics for managed wild Lowbush Blueberry production. The Chapleau region sites were identified as a priority development area in establishing the Northeast Superior Region as a globally competitive wild blueberry producer.
A SITE ASSESSMENT CONDUCTED BY PETER BURGESS OF AGRAPOINT SUGGESTED THAT WITH PROPER
DEVELOPMENT, MAINTENANCE AND MARKETING STRATEGIES, THE CHAPLEAU, SULTAN SITE COULD BECOME A
WORLD CLASS PRODUCTION CENTRE OF WILD BLUEBERRIES THAT COULD COMPETE WITH OTHER AREA OF
CANADA, INCLUDING NOVA SCOTIA AND QUEBEC. 1
Combining the natural environment features with sound development planning, operation and marketing strategies, this area has the potential to become a viable world class wild blueberry production centre that could compete with other Canadian provinces.
Once the Chapleau-Sultan Wild Blueberry Farm is established, additional sites across the region could be developed. Development of these smaller sites would be facilitated within the supportive framework of an established regional industry.
Realizing this vision requires the participation and support of organizations, people and businesses willing and able to invest in growing operations. The guidance of government and industry experts will be instrumental in driving the early stages of development. The imagination of entrepreneurs capable of developing associated value-added business will play a vital role in expanding the economic potential of the resource once the farm is in production.
The NSFC is working in partnership with Level Plains Enterprises Inc., a Wawa based company that established a successful wild blueberry venture in Wawa in 2008. Our goal is to increase the economic potential of our region through economies of scale and shared expertise.
NSFC will work with government agencies, First Nations and Aboriginal communities, and the public to develop the project sustainably and improve regional prosperity.
Given the regional economic climate, our hope is that the Crown will recognize the potential of this industry and afford it priority for development within the NSFC region.
DISPOSITION REQUEST
Expectations regarding the use of the natural resource base: The NSFC is requesting a disposition of lands in the Chapleau area for agricultural production of wild Lowbush blueberries. A land disposition would allow NSFC to move forward with the planning and development necessary to bring a commercial blueberry farm into production over the next several years.
REQUEST : 551 HECTARES OF CROWN LAND WITH THE NSFC AS THE PROPONENT; NSFC IS PROPOSING THAT THE AREA BE DIVIDED INTO 5 PARCELS.
L ICENCES & PERMITS : LAND USE PERMITS - LEASE AGREEMENTS - FOREST RESOURCE LICENSE (SEE DETAIL BELOW.)
START OF TENURE : 2012
Access to existing resources: Access to a secure land base is paramount to the ely owned land, this means securing
Crown land suitable for blueberry farming. The type of tenure and the terms of the tenure agreement must be determined with consideration for the security, investment and financing requirements for the project.
In consultation with the Chapleau Ministry of Natural Resources (MNR) it was determined that land use permits (LUP) would be the appropriate form of tenure for the initial stages of project development. For the proposed undertaking, LUPs could be issued to coincide with the scheduled development of each parcel.
A land use permit may be issued by the Crown for a term up to 10 years; rental fees are paid yearly, in addition to a one-time administration fee. Land use permits would also allow development to proceed while ensuring lower rental fees during the capital intensive start-up period. The LUPs provide an interim form of tenure and could be converted into lease agreements in the future if necessary. To secure appropriate financing for development and continued operation of a commercial blueberry farm, future lease agreements remain the long term objective. These can be implemented as the parcels are established, and as their value increases through improvements and the creation of value added business ventures.
Development Projects (RSFDP Class EA). A successful Class EA outcome affords projects on Crown land to proceed within 5 years of approval.
NSFC will have to secure a Forest Resource Licence and Approval to Commence Cutting Operations, issued under sections 27(1) or 29(2) & 47, and 44(1) under the Crown Forest Sustainability Act prior to the harvest of any merchantable trees on Crown land. NSFC is committed to working with Tembec to ensure that the proposed project does not interfere with forestry operations and affords them the opportunity to harvest merchantable timber from the project area. Owing to the significant size of the LUP, MNR has requested that the boundaries of each parcel be clearly marked with flagging tape and all corners be marked more permanently. Should it be determined that a lease agreement is required, NSFC will be required to undertake a legal survey of the parcels. The survey must be completed under the requirements established by the Crown and at the expense of the proponent. Marking of boundaries, legal surveys and the required Forest Resource Licence will be obtained subsequent to the successful outcome of the environmental assessment. Any transfers of tenure will be conditional on the requirement to implement activities as approved in the project plan and will be subject to approval by Chapleau District office of the Ministry of Natural Resources. Transferees may be required to submit a business plan to MNR.
Proposed fee structure : Reasonable rates for Land use permits and/or lease agreements are vital to allow the fledgling industry to start strong and continue to grow.
(PL 2.03.01) seek to achieve a fair return for public land through the application of market value. The MNR is presently studying fair market value for the proposed area given the absence of precedent for a wild blueberry operation on provincial Crown land.
The proposed project area is forested Crown land located along both the north and south sides of Highway 667, approximately 35 km southeast of Chapleau in the Sultan Flats. The land is located within a General Use Area (G1770) described as a general resource extraction and management area with the intent of expansion of the forest, mining and trapping sectors. The land use policy accommodates dispositions for agricultural purposes. A total of five parcels of land are proposed for development over a 5 year period. See Appendix D for maps showing the location of the proposed area.
PROPOSED AREA- CONSIDERATIONS
Of the areas identified in The Northeast Superior Forest Community Corporation Wild Blueberry Field Assessment Report - 2011, the Chapleau sites in the Sultan Flats were recommended as the priority for development based on site characteristics. The quality of land is excellent with sandy soils, optimal topography, geology and climate, an abundant natural density of wild blueberry plants, as well as proximity to communities and transportation networks.1
NSFC has presented a development proposal to the MNR for an assemblage of sites in proximity to one another, totaling 551 hectares within the Sultan Flats. The combined project area would create enormous capacity for commercial wild blueberry production.
LAND CAPACITY IS THE QUANTITY OF SUITABLE AREA THAT CAN SUPPORT THE PRODUCTION OF WILD
BLUEBERRIES. LARGER SITES ARE FAVOURED OVER SMALLER SITES AS MORE AVAILABLE AREA WILL PRODUCE
HIGHER YIELDS COMPENSATING ANY INPUT COSTS REQUIRED TO DEVELOP, MANAGE AND HARVEST THE SITE.2
NSFC recognizes that detailed planning and consultation is required with the MNR, First Nation and Aboriginal communities, and the public to better understand the suitability of this request. NSFC recognizes that preliminary boundaries are subject to change to accommodate environmental, regulatory, Aboriginal or public concerns and values. NSFC remains flexible in the determination of final boundaries for the proposed development, and is able to give consideration to alternatives for developing the proposed blueberry farm, including:
Revising proposed area boundaries while giving consideration to site capacity being a key attribute of this proposal (target 551 ha)
Other suitable sites in proximity to the preferred location
Netting down the proposed development area would not result in the dismissal of this venture as no longer viable however a smaller project area would require an extended period to recover project start-up costs resulting in fixed costs being spread over fewer producing hectares. Variable development costs would decrease proportionally with hectares developed as would associated future revenues.
According to the Northeast Superior Forest Community Corporation Wild Blueberry Field Assessment Report; a minimum land capacity of 200 ha is required for wild
world class production centre, maximizing the area to be developed will be instrumental to this projects success. Given this NSFC would target a final area of 500 hectares once detailed planning has been completed.
THE CHAPLEAU-SULTAN SITE PRESENTS THE HIGHEST POTENTIAL FOR DEVELOPMENT DUE TO THE HOMOGENEITY
OF THE LAND, THE LARGE SITE CAPACITY (AREA), ACCESSIBILITY, HIGH NATURAL DENSITIES FOUND ON SITE, SANDY SOILS AND PROXIMITY TO A SUPPORTING COMMUNITY. THIS SITE IS CONSIDERED THE "JEWEL IN THE
CROWN". THE CHAPLEAU-SULTAN SITE CAN PROVIDE SOME OF THE BEST LANDS FOR WILDS BLUEBERRY
DEVELOPMENT IN ONTARIO AND EVEN CANADA. 1
APPLICATION APPROVAL PROCESS
project, consideration of its potential environmental effects, and a prescribed evaluation and consultation process. Because of concerns regarding the natural, cultural and socio-economic affects of this undertaking, an opportunity must be provided for regulatory agencies, the public, Aboriginal and First Nation communities and other interested parties to review and comment on this project proposal.
PROPOSED TIME FRAMES
Below is a description of proposed time frames within the project planning and approval process. This process and schedule is subject to change depending on MNRs review of the proposal and the level of interest that may arise.
Project Proposal Submission November 2012 Project Plan Review & Categorization December 2012 Project Proposal revised December 2012 Public Consultation begins January 2013 Obtaining Applicable Licenses or Permits Following successful EA decision Project Implementation begins as soon as permitting is secured
MILESTONES
Completion of project proposal : A preliminary Project Proposal was provided to the Ministry of Natural Resources in January 2012. Other ministries including Ministry of the Environment, Ontario Ministry Agriculture, Food, and Rural Affairs, Ministry of Aboriginal Affairs and the Ministry of Northern Development and Mines were subsequently forwarded a copy of the draft project proposal for comment. Subsequent revisions were made to the Project Proposal document through the course of the year, under the guidance of the Ministry of Natural Resources.
Project Plan Review and Categorization: The Ministry of Natural Resources reviewed the Project Proposal, categorized it as a B undertaking, and provided recommendations on consultation and next steps according to the requirements of the RSFDP Class EA. There may be additional requirements for revisions to the Project Proposal as a result of the formal public comment period. Proposed timeframes may require adjustment as this proposal moves through the approvals process.
Obtaining regulatory approvals and permits: Necessary licenses and permits will be required prior to project initiation. No work will begin on the project until appropriate permits have been obtained. The MNR will determine all required approvals and NSFC will complete all surveys, licence and permitting applications subsequent to a favourable environmental assessment outcome.
Construction schedule & start -up date: Operational activities are anticipated to begin in 2013. The construction schedule is dependent on the timing for the completion of the RSFDP Class EA for this undertaking. Further discussion on operational activities and proposed development schedules is provided in the Operations section.
DEVELOPMENT MODELS
There are two agricultural models for farming wild blueberries used in Canada: the traditional model which consists of fields that are developed fully for blueberry cultivation and an agroforestry model which develops fields to provide both blueberry cultivation and managed timber.
The traditional approach is common in the Atlantic provinces where blueberry farms are often developed in areas that have been clear cut, recently burned or are considered abandoned farmland. The agroforestry model has been successfully implemented in
. Jean area where commercial blueberry operations are established in forested areas. Detailed information on the agroforestry model is provided in Appendix C.
Organic production models are presently most suited to small scale application. Much of the organic production industry is based on small operations or from berries harvested from the wild.
DEVELOPMENT ALTERNATIVES
Below is an outline of options that NSFC has considered to be economically viable alternatives for the proposed undertaking.
Alternatives:
- 551 hectares using the traditional model into full blueberry fields
2. Develop project area using both the traditional model and the agroforestry model
- 434 hectares using the traditional model into full blueberry fields
PREFERRED ALTERNATIVE
Alternative #2 was determined to be preferred option for development . This alternative applies the traditional model at the outset to develop a large amount of the identified area. It also establishes an agroforestry pilot project on a designated portion of the area during successive field development. The site plan in Appendix D shows where the two models are proposed.
Rationale: The traditional development model simplifies the establishment and management of the fields ensuring that the early years of the project are focused on successfully establishing the farm and launching the business.
GIVEN THAT BLUEBERRIES ARE WORTH APPROXIMATELY $1.00/KG TO FARMERS, THE ANNUAL OUTPUT OF MANAGED FIELDS RANGES FROM $3360 TO $8967/HA, WHICH IS FAR SUPERIOR TO THE AVERAGE TIMBER
GROWTH OF CANADA S FORESTS OF 1.59 M3 /HA/YEAR (LOWE ET AL. 1996) WITH AN APPROXIMATE VALUE OF
$100/HA/YEAR.1
This alternative also values the need to work cooperatively over the long-term with existing industry in later years by refocusing on managing blueberries and forests on the same land base. An agroforestry pilot project could help to establish a future strategy for increasing the number of blueberry operations on Crown land and expanding the industry within the region.
In general, once the trees have been removed from the identified production area, development and management proceeds in the same way regardless of whether you are working entire fields or strips within a field. See the Operational Activities Section for additional information on how the development and management of the fields would occur.
Under this alternative, organic production may be viable over the long term in projects that that include development in proximity to sensitive features (i.e. water bodies). These areas could be earmarked as future organic production zones of the operation
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and developed accordingly. Organic production could provide product diversification opportunities once the farm is well established.
Implementing the agroforestry pilot project as the last phase of development allows time for NSFC and its partners to explore the net effects of an agroforestry approach on the proposed commercial blueberry business as well as on the management of Crown timber. It also allows for resource management planning under this model in addition to examining implications on associated forest certification. See Appendix C for detailed discussion of agroforestry objectives and methodology.
DEVELOPMENT TIMELINE
Given the total area (551 hectares), the project proposes development in a phased approach spanning over several years. Changing forested land into blueberry producing land takes approximately 5-6 years once field development begins. This includes time for removing the overstory of trees, allowing stumps to decay before preparing the fields, a growing season, and then a flowering and harvest season.
PRE FEASIBILITY STUDY
NSFC Commercial Blueberry Production Business Plan 20081 was developed as a feasibility study for this project. It analyses the viability of a commercial blueberry production in the Northeast Superior region. This feasibility study formed the foundation and template for business planning and market analyses required for development of specific blueberry production projects throughout the region.
Why wild blueberries? The Lowbush Blueberry is a native plant. It flourishes locally in well-drained, acidic soils that are low in fertility and unsuitable for other agricultural purposes. There is an existing commercial blueberry industry in Canada in which demand far exceeds supply. With Ontario being significantly underdeveloped in this industry, the success of this commercial blueberry project is highly feasible.
Chapleau shares similar climate, geology, soil, and vegetation characteristics with the Atlantic Canada and Quebec locations where the wild Lowbush Blueberry industry is a major economic contributor. In these areas, agricultural management techniques are being used to dramatically increase yields from the native crop of wild blueberries; this managed crop is marketed as a wild blueberry crop.
There is no defined life span for an established wild blueberry field if properly managed, a field could continue to produce indefinitely. Considering the capacity to produce wild blueberries indefinitely, the management, harvesting and processing activities will provide employment opportunities that will continually be available on an annual basis.2
Drawing from the experience and success of established operations NSFC can apply the lessons learned and best practices for the Chapleau development and operations.
Industry Overview: The global wild blueberry industry is confined to eastern North America, where the plant is part of the native vegetation. Currently wild blueberries are mainly grown in Quebec, Nova Scotia, New Brunswick, Prince Edward Island and Newfoundland on both private and Crown lands. About 95% of total "low-bush" production (based on 2003 data) was marketed as processed (frozen). 1
1 The Northeast Superior Forest Community Commercial Blueberry Production Business Plan 2008
2 Level Plains Business Plan January 2010
The market for wild blueberries : With their reputation as a healthy food choice, blueberries have been a growing part of years. The growth may be due in part to increased demand for this antioxidant-rich fruit. While overall the fruit industry is becoming more competitive, both domestic and global markets are still increasing as the benefits of eating blueberries become widely known.
The table below shows the status of markets for wild blueberries.
Canada's Exports of Wild Blueberries to All Countries ($CAD)
2007 2008 2009 2010 Growth
wild blueberries - fresh 7,641,673 12,720,465 5,863,984 8,060,784 5.50%
wild blueberries - processed 183,889,813 159,016,984 120,859,657 122,248,533 -33.50%
Canada's Exports of Wild Blueberries to All Countries (Quantity,KGM)
2007 2008 2009 2010 Growth
wild blueberries - fresh 4,219,339 7,210,348 4,939,028 6,693,712 58.60%
wild blueberries - processed 36,933,934 38,164,143 35,980,919 43,560,965 17.90%
Canada's Top 10 Blueberry Markets ($CAD) includes wild and cultivated blueberries
Country 2007 2008 2009 2010 Growth
TOTAL: 323,707,933 301,309,121 236,365,651 245,153,119 -24.30%
United States 214,471,801 197,721,842 152,329,458 151,431,165 -29.40%
Germany 17,201,009 18,410,272 25,149,536 20,923,835 21.60%
Japan 33,600,297 28,857,222 18,997,067 21,999,062 -34.50%
Netherlands 7,056,938 11,358,814 6,992,744 11,089,010 57.10%
France 7,702,150 7,911,740 6,866,362 6,048,126 -21.50%
China 9,095,513 5,773,458 4,522,775 6,905,515 -24.10%
United Kingdom 15,912,021 16,027,928 8,065,032 6,105,329 -61.60%
Belgium 7,636,864 4,321,906 4,981,148 5,273,651 -30.90%
Australia 5,298,950 4,041,201 3,325,022 5,409,425 2.10%
South Korea 53,655 522,787 295,944 2,990,589 5473.70%
These statistics on blueberry markets are complete through year end 2010.2
1 http://www4.agr.gc.ca
Market Channels: A well defined marketing system has evolved in blueberry producing areas for getting the crop from the field to the end user. These market channels involve the following1:
Growers grow and harvests blueberries. A grower may or may not be a buyer or processor.
Buyers buy blueberries from the grower and sells to the processor. The buyer is usually, but not necessarily, a grower himself.
Processors buy blueberries from the buyer or directly from the grower. The processor (freezes) these berries at this plant. They are then either resold immediately or stored and held for future sales. Some processors are also large growers.
Manufacturers buy blueberries (mostly frozen but sometimes fresh) for use in the manufacturing of blueberry pies, tarts, muffins, etc., or other manufactured products.
Customers of the blueberry growing industry include processors, food wholesalers and retailers, manufacturers, value-added industries, and consumers. Large quantities of berries at competitive costs are required to supply processors and value added
Northeast Superior region in participating at the scale required by this growing industry.
Commercial blueberry products go well beyond a fresh product and can include: frozen, concentrate, puree, dried, sugar infused, and powder. A wide range of value-added products can also be produced from berries including: nutraceuticals, liquor and wine, baked goods, syrups, jams, ice cream, yogurt, and health and beauty products.
Additional information regarding feasibility and market analysis are available in the NSFC Commercial Blueberry Production Business Plan 2008.
Key Ingredients: Business Development Vision. The long term vision is to be influential in creating create a successful and thriving blueberry production industry in the Northeast Superior region. The vision for this project is to develop and launch a large scale mechanized commercial blueberry growing operation in the Chapleau area.
Industry analysis shows that blueberry production on a commercial scale is required to be competitive in markets other than the fresh market. Current hand harvesting in the wild is low yield and high cost, ruling out a sustainable and significant entry into the processing and other value-added markets. Thus it is imperative that commercial blueberry production is established.
The value of a clear vision is that it attracts the kind of support needed to nurture the industry. It also motivates people to buy-in throughout the region, helping to produce the critical mass necessary to grow the industry cooperatively across the region and to achieve economies of scale.
In the short term, the business development strategy will focus on fresh wild blueberries with the production of a quality controlled fresh product, branded and shipped to market. Branding and promotion will highlight the high quality and truly wild Northern Ontario blueberry. This will support a premium pricing strategy; distribution will focus on selected high quality produce retail outlets and direct-to-consumer venues, such as fa .
An existing cold storage facility in Chapleau may be used to set up a processing facility that will start by processing fresh berries, eventually introduce freezing and subsequently add a central processing facility for Northeastern Ontario providing other distribution access for other wild blueberry farming operations. A separate process will be undertaken relating to this facility.
In the mid- term, freezing berries could assist the development of smaller scale value- added activities, at the cottage industry level, and marketing to smaller manufacturing operations (wineries, etc.).
In the future it will become viable to enter into the larger scale frozen blueberry market to serve customers in the food manufacturing industries. As the quantity of berries being produced increases, from both the Chapleau-Sultan Wild Blueberry Farm as well as through other growing activity across the region, further local processing will be added for sale of frozen berries to these manufacturers. Ideally, the centrally processed berries would also be shipped back to NSFC communities who choose to expand their blueberry operations to include value-added manufacturing.
As part of planning for long-term product diversification from the blueberry farm, is interested in exploring possibilities of establishing some form of organic
managed in accordance with organic certification guidelines for Ontario produce and would become a separate value added product line. Development of organic production would be through the same methods except there would be no use of chemical soil applications.
Key ingredient: economies of scale. Economies of scale are very important in established commercial blueberry producing areas for both the individual
farmer as well as the industry as a whole. This is referred to as internal and external economies of scale.
With internal economies the cost per unit depends on size of an individual firm.1 Blueberry growers can reduce the cost per unit through operational efficiencies that increase production. Economies of scale are achieved because as production increases, the cost of producing each additional unit falls.2
External economies of scale occur when firms benefit from the whole industry getting bigger.3 In the case of blueberries, growers benefit from better infrastructure, access to specialized labour, improved techniques for production, good supply networks, large scale product branding, and global trade opportunities.
In Nova Scotia there are 1,000 growers (with over 33,000 acres (13,350 ha) in production and an average yield of some 5,000 pounds per acre (2025 pounds per ha) fuelling a small number of major processing operations.4 Economies of scale permit Nova Scotia growers to sell blueberries at a competitive price. They also facilitate the development of entire systems supplying the food processing industry in Canada and U.S. and diverse markets overseas.
NSFC will work to achieve similar economies of scale for Northeast Superior Region of Ontario as a long-term goal for business development.
Key ingredients: long term strategy and incremental progress . For many agricultural products, including the blueberry, grand visions can be realized through focused, strategic and incremental actions over time. In many instances, the time
1 http://www.investopedia.com/terms/e/economiesofscale.asp#ixzz1UpSuFB2S
2 http://www.investorwords.com/1653/economy_of_scale.html#ixzz1UpTBmRj4
3 http://www.economicshelp.org/microessays/costs/economies-scale.html
involved is substantial decades, not years. When improvements are realized in a regional industry, year-to-year over time, the results can be astonishing.1
Taking a phased approach to development of the Chapleau-Sultan Wild Blueberry Farm will help to ensure success for the project. A slow but steady rate of development will grow local knowledge and capacity for farm establishment and management activities.
Key ingredients: partnerships. Keeping in mind long term goal of developing a region wide commercial blueberry industry approach will consider existing industries and the challenge of balancing stakeholder interests on Crown land.
During the planning and implementation phases, engaging new partnerships and working with existing partners will be a priority to both establish and continue to grow the industry. NFSC partners include member communities, First Nations, Tembec, MNR, and Level Plains Inc.
Level Plains Inc. brings solid experience and a spirit of cooperation to both hands on farm development as well as the vision for a region wide blueberry industry. Its principals, Trevor and Tracy Laing, have successfully developed a blueberry farm in Wawa, and conducted site assessments across the NSFC region. Trevor continues to share his valuable experience and advice and is considered our blueberry expert in regards to this project.
SWOT Analysis is a planning tool that involves conducting a scan of the internal and external environment. As part of the pre-feasibility study, it can be used to analyze a
SWOT analysis: Strengths are internal characteristics that are helpful to achieving the objective. Strengths can give the business an advantage over others in the industry.
- As the proponent, NSFC has a business development vision and a long term strategic vision for the proposed project.
- To offset high costs of planning and field development NSFC plans to obtain funding and leverage additional dollars making this project attractive to investors.
- Once an operation is well established, it has an indefinite life-span.
- The proposed land has high density of the native Lowbush Blueberry suitable for a more intensive, managed blueberry growing operation.
- Local interest in economic development, diversification and new business opportunities is strong.
- There is strong technical and advisory support from government for resource use and economic development activities.
- Wild blueberries are high in antioxidants which have many health benefits including anti-aging effects, cancer inhibiting properties, heart health, urinary tract health, vision health.1
- Opportunities for value added products.
- Partnerships and cooperation with other growers in the region will provide external economies of scale for industry growth through marketing, processing and sales.
- Relative proximity to large market for fresh produce in southern Ontario.
- Substantial and reliable transportation network is in place and the Chapleau-Sultan Wild Blueberry Farm is with relative proximity to major markets of Sault Ste Marie, Sudbury, and Toronto. There is relatively easy access to US markets via Sault Ste. Marie and to international markets via the Great Lakes Seaway.
SWOT Analysis: Weaknesses are internal attributes that are harmful to achieving the objective. They can place the business at a disadvantage relative to others.
- Fresh blueberries are cla improper handling and storage. According to the Ontario Ministry of Agriculture, Food and Rural Affairs (OMAFRA), a one-
-life by one day.
- Initial development costs are high and production is delayed when opening fields from forests. The time involved is substantial and there is virtually no income generated during the early stages of developing the fields.
- As the proponent, NSFC is an organization that is funded through Natural Resource funding is on a yearly basis making
multi-year projects challenging to plan and conduct.
- Inability to control markets driven by supply and demand.
- Location of the farm is farther than ideal from markets.
- Crop will require good weather, adequate rainfall and abundant pollinators (bees) to produce high yields.
SWOT Analysis: Opportunities are external chances that are helpful to achieving the objective; these have the potential to increase sales and profits.
1 www.nswildblueberries.com
- A large population base with a growing appetite for fresh, foods and high quality specialty foods and a significant food processing industry create the demand required for this new Ontario industry to succeed.
- The anti-oxidant properties of the wild blueberries are a good selling feature and will continue to create demand for blueberry products into the future.
- The blueberry production industry is modest in size in Ontario, compared to Nova Scotia and Quebec; however there appears to be room in the market for an Ontario business, provided it can compete.
- There is potential to put Ontario on the map (with Northeastern Ontario as the capital) in wild blueberry production if the industry is developed successfully.
- There is a sufficient base of lands that could be developed for blueberry production.
- Northern Ontario communities are participating jointly in a number of activities to promote regional economic development and there is the potential to involve a number of communities in a co-operative development of a blueberry production industry. This will help build critical mass.
- There is potential to join forces with an industry organization when engaged in commercial production; this would provide access to information, markets and marketing resources.
- There is an existing and well supported bee industry in Ontario to help support pollination requirements for the blueberry farm.
- Bees as pollinators provide an opportunity to spin off a value added industry based on wax, honey and other bee related items.
- Distances are relatively close to fresh markets such Toronto and Sault Ste Marie as well to borders for shipping processed exports.
SWOT Analysis: Threats are external elements of the environment that are harmful to achieving the objective. Threats could result in trouble to the operation.
- Blueberry production and blueberry prices exhibit considerable variability. Producti
Submitted by:
The Proponent .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
The Land ... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Goal .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Capital Investment and Financial Summary ... . . . . . . . . . . . . . . . . . . . . . . . 28
Management skil ls/qualifications of proponent .. . . . . . . . . . . . . . . . . . . 29
Liabil ity Insurance Requirements .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
Contingency plan ... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
OPERATIONS
Field development .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
Other operational considerations .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
Fisheries and wetlands .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
Resource uses values .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
Forest management activities .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
Aboriginal traditional territories and land uses .. . . . . . . . . . . . . . . . . . . 48
POTENTIAL EFFECTS
Land use and resource management considerations .. . . . . . . . . . . . . 49
Social, cultural and economic considerations .. . . . . . . . . . . . . . . . . . . . . . 50
Aboriginal considerations .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
Mitigating Potential Effects to land use and resource management 55
Mitigating Potential Effects to social, cultural, and economic 57
Mitigating Potential Effects to Aboriginal considerations .. . . . . . 58
PUBLIC CONSULTATION
Planned consultation ... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
Project evaluation ... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
APPLICABLE POLICIES & APPROVALS
Strategic Framework ... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
APPENDICES
Appendix B: Integrated Pest Management Plan ... . . . . . . . . . . . . . . . . . . 70
Appendix C: Environm
EXECUTIVE SUMMARY
THE PROJECT
The Northeast Superior Forest Community (NSFC) in partnership with the Northeast Superior Regional Chiefs Forum has been building a new and exciting industry for the region. The development of the Chapleau-Sultan Wild Blueberry Farm has been a concept for the economic diversification of Chapleau area, as well as the wider Northeast Superior region that has been under development for more than 8 years. With primary concepts and partnerships developed through the efforts of the Chapleau Regional Development Corporation, the NSFC has been working diligently on turning this idea into reality.
We have seen the tremendous opportunities that emerge with the consideration of maximizing our forest resources and using them in a new way. The Chapleau-Sultan Wild Blueberry Farm is the first opportunity that puts planning into action. We all recognize that by bringing new users of forest resources into the economy brings with it the opportunity to help support our existing industry partners and to ensure that our communities in the Northeast Superior continue to grow and thrive. We need to continue to look for economic opportunities that are rooted in assets our area possesses like the blueberry.
Over the past several years we have been working to ensure this industry is one that can work for our area, is financially viable, and is sustainable for the long term. We knew at the onset that there are very dramatic upfront development costs associated with this type of farm, as well as a gap of up to 7 years between site development and the generation of a full crop. These were barriers that were identified early, and stressed the importance of undertaking our initiative with very intensive, thorough planning process and taking the time we need to make sure we are developing a concept that can work.
Once initial plans were identified as possible, this was followed by a Site Assessment study, which was tasked with looking within the region to find the best quality land for the development of blueberry farms. Of the properties identified, the Sultan flats area near Chapleau ranked as our largest quantity and highest quality of soil. This property has a great proximity to the highway, as well as the road network necessary to make this a prime candidate for blueberry farming. With the support of Tembec Inc. mill is fed through fibre that comes from this portion of the forest, we have moved forward with a clear and concise project plan for the Sultan area, as well as developed a business plan to make sure we are fully prepared for this undertaking.
THE PROPONENT
The Northeast Superior Forest Community is a not-for-profit economic development corporation that has been operating in the Chapleau region for the past six years. Our organization represents a partnership between the communities of Chapleau, White River, Wawa, Dubreuilville, Hornepayne and Manitouwadge, as well as the Northeast Superior Regional Chiefs Forum. NSFC has the mandate of seeking out ways of diversifying the regional forest based economy as a response to the forest sector downturn see over the past decade. One of our key areas of exploration is the field of Non Traditional Forest Resources with the strategy of finding new and innovative economic drives for economies that come from our forest resources.
THE LAND
We have requested the issuance of a land use permit (LUP) in order to establish interim tenure over the land in question and to allow us to begin the development process. In order to support this process we have developed this detailed project proposal as requested by The Ministry of Natural Resources. It is the responsibility of MNR, and other relevant provincial ministries and agencies to review the proposal in order to ensure consistency with applicable legislation and policy direction. This has been undertaken, the project is now required to undertake pubic and Aboriginal consultation
Projects, in order for a disposition of lands to occur.
HE CHAPLEAU-SULTAN SITE PRESENTS THE HIGHEST POTENTIAL FOR DEVELOPMENT DUE TO THE HOMOGENEITY OF THE LAND, THE LARGE SITE CAPACITY, ACCESSIBILITY, HIGH NATURAL DENSITY FOUND ON SITE, SANDY SOILS AND PROXIMITY TO A SUPPORTING COMMUNITY. THIS SITE IS CONSIDERED THE JEWEL IN THE CROWN THE CHAPLEAU-SULTAN SITE CAN PROVIDE SOME OF THE BEST LANDS FOR WILD BLUEBERRY DEVELOPMENT IN ONTARIO AND EVEN CANADA (NORTHEAST SUPERIOR FOREST COMMUNITY WILD BLUEBERRY FIELD ASSESSMENT REPORT
2011, LEVEL PLAINS ENTERPRISES
THE DEVELOPMENT STRATEGY
We are planning for 5 phases of development, with a 100+ hectares of land harvested and developed each year, in an effort to ensure costs and workload are manageable. With a 10-year development strategy in place, resources approved and allocated, this project is ready to move into active development with the support of Tembec, our local industry partner.
The project plan and proposal has taken into consideration the commitment of the NSFC and NSRCF to sustainable, environmentally conscious development. We have considered mitigation strategies for bears, and birds, as well as impacts on water shed, environment and existing land users. It has become a clear priority that this development will move forward as an enhancement to the daily way of life of residents, as well as a new economic driver for the region.
GOAL
To develop and establish the Chapleau-Sultan Wild Blueberry Farm as a world class production centre for wild blueberries.
PROJECT PROPONENT
The Northeast Superior Forest Community (NSFC) is the project proponent. The NSFC is a not for profit, forest sector based, economic development organization. The NSFC has a board of directors and a general manager directing project management staff. As an organization the NSFC is advocating and working towards the development of blueberry farms within the NSFC region as a way to diversify and reinvigorate the regional economy.
NSFC has secured funding to cover the administrative efforts and costs associated with establishing a tenure agreement with the Crown. Establishing tenure on the proposed areas for development on Crown land is the first step towards successfully developing and sustaining a commercial blueberry business. The long-term goal is to create a viable commercial blueberry development capable of attracting local entrepreneurs having the financial resources and business know-how to invest in a long-term agricultural venture with low or no payback for several years.
Once tenure is established, investors will be sought to invest in or take over the development of the farms as they are established. If this does not occur, the NSFC will continue to leverage funds to contribute to the substantial upfront development costs for the wild blueberry fields.
Once the Chapleau-Sultan Wild Blueberry Farm is more established, NSFC would continue to work towards facilitating the transfer of the business operation to a local entrepreneur or a regional Non Timber Forest Products Cooperative.
FOUNDATION
Although the wild Lowbush Blueberry is traditionally harvested and sold locally on a small scale in Northern Ontario, the region has yet to initiate commercial production operations that have provided established long-term economic benefits to several Canadian provinces. Recognizing this opportunity, NSFC launched an investigation into potential crop production areas across the region that exhibit key characteristics for managed wild Lowbush Blueberry production. The Chapleau region sites were identified as a priority development area in establishing the Northeast Superior Region as a globally competitive wild blueberry producer.
A SITE ASSESSMENT CONDUCTED BY PETER BURGESS OF AGRAPOINT SUGGESTED THAT WITH PROPER
DEVELOPMENT, MAINTENANCE AND MARKETING STRATEGIES, THE CHAPLEAU, SULTAN SITE COULD BECOME A
WORLD CLASS PRODUCTION CENTRE OF WILD BLUEBERRIES THAT COULD COMPETE WITH OTHER AREA OF
CANADA, INCLUDING NOVA SCOTIA AND QUEBEC. 1
Combining the natural environment features with sound development planning, operation and marketing strategies, this area has the potential to become a viable world class wild blueberry production centre that could compete with other Canadian provinces.
Once the Chapleau-Sultan Wild Blueberry Farm is established, additional sites across the region could be developed. Development of these smaller sites would be facilitated within the supportive framework of an established regional industry.
Realizing this vision requires the participation and support of organizations, people and businesses willing and able to invest in growing operations. The guidance of government and industry experts will be instrumental in driving the early stages of development. The imagination of entrepreneurs capable of developing associated value-added business will play a vital role in expanding the economic potential of the resource once the farm is in production.
The NSFC is working in partnership with Level Plains Enterprises Inc., a Wawa based company that established a successful wild blueberry venture in Wawa in 2008. Our goal is to increase the economic potential of our region through economies of scale and shared expertise.
NSFC will work with government agencies, First Nations and Aboriginal communities, and the public to develop the project sustainably and improve regional prosperity.
Given the regional economic climate, our hope is that the Crown will recognize the potential of this industry and afford it priority for development within the NSFC region.
DISPOSITION REQUEST
Expectations regarding the use of the natural resource base: The NSFC is requesting a disposition of lands in the Chapleau area for agricultural production of wild Lowbush blueberries. A land disposition would allow NSFC to move forward with the planning and development necessary to bring a commercial blueberry farm into production over the next several years.
REQUEST : 551 HECTARES OF CROWN LAND WITH THE NSFC AS THE PROPONENT; NSFC IS PROPOSING THAT THE AREA BE DIVIDED INTO 5 PARCELS.
L ICENCES & PERMITS : LAND USE PERMITS - LEASE AGREEMENTS - FOREST RESOURCE LICENSE (SEE DETAIL BELOW.)
START OF TENURE : 2012
Access to existing resources: Access to a secure land base is paramount to the ely owned land, this means securing
Crown land suitable for blueberry farming. The type of tenure and the terms of the tenure agreement must be determined with consideration for the security, investment and financing requirements for the project.
In consultation with the Chapleau Ministry of Natural Resources (MNR) it was determined that land use permits (LUP) would be the appropriate form of tenure for the initial stages of project development. For the proposed undertaking, LUPs could be issued to coincide with the scheduled development of each parcel.
A land use permit may be issued by the Crown for a term up to 10 years; rental fees are paid yearly, in addition to a one-time administration fee. Land use permits would also allow development to proceed while ensuring lower rental fees during the capital intensive start-up period. The LUPs provide an interim form of tenure and could be converted into lease agreements in the future if necessary. To secure appropriate financing for development and continued operation of a commercial blueberry farm, future lease agreements remain the long term objective. These can be implemented as the parcels are established, and as their value increases through improvements and the creation of value added business ventures.
Development Projects (RSFDP Class EA). A successful Class EA outcome affords projects on Crown land to proceed within 5 years of approval.
NSFC will have to secure a Forest Resource Licence and Approval to Commence Cutting Operations, issued under sections 27(1) or 29(2) & 47, and 44(1) under the Crown Forest Sustainability Act prior to the harvest of any merchantable trees on Crown land. NSFC is committed to working with Tembec to ensure that the proposed project does not interfere with forestry operations and affords them the opportunity to harvest merchantable timber from the project area. Owing to the significant size of the LUP, MNR has requested that the boundaries of each parcel be clearly marked with flagging tape and all corners be marked more permanently. Should it be determined that a lease agreement is required, NSFC will be required to undertake a legal survey of the parcels. The survey must be completed under the requirements established by the Crown and at the expense of the proponent. Marking of boundaries, legal surveys and the required Forest Resource Licence will be obtained subsequent to the successful outcome of the environmental assessment. Any transfers of tenure will be conditional on the requirement to implement activities as approved in the project plan and will be subject to approval by Chapleau District office of the Ministry of Natural Resources. Transferees may be required to submit a business plan to MNR.
Proposed fee structure : Reasonable rates for Land use permits and/or lease agreements are vital to allow the fledgling industry to start strong and continue to grow.
(PL 2.03.01) seek to achieve a fair return for public land through the application of market value. The MNR is presently studying fair market value for the proposed area given the absence of precedent for a wild blueberry operation on provincial Crown land.
The proposed project area is forested Crown land located along both the north and south sides of Highway 667, approximately 35 km southeast of Chapleau in the Sultan Flats. The land is located within a General Use Area (G1770) described as a general resource extraction and management area with the intent of expansion of the forest, mining and trapping sectors. The land use policy accommodates dispositions for agricultural purposes. A total of five parcels of land are proposed for development over a 5 year period. See Appendix D for maps showing the location of the proposed area.
PROPOSED AREA- CONSIDERATIONS
Of the areas identified in The Northeast Superior Forest Community Corporation Wild Blueberry Field Assessment Report - 2011, the Chapleau sites in the Sultan Flats were recommended as the priority for development based on site characteristics. The quality of land is excellent with sandy soils, optimal topography, geology and climate, an abundant natural density of wild blueberry plants, as well as proximity to communities and transportation networks.1
NSFC has presented a development proposal to the MNR for an assemblage of sites in proximity to one another, totaling 551 hectares within the Sultan Flats. The combined project area would create enormous capacity for commercial wild blueberry production.
LAND CAPACITY IS THE QUANTITY OF SUITABLE AREA THAT CAN SUPPORT THE PRODUCTION OF WILD
BLUEBERRIES. LARGER SITES ARE FAVOURED OVER SMALLER SITES AS MORE AVAILABLE AREA WILL PRODUCE
HIGHER YIELDS COMPENSATING ANY INPUT COSTS REQUIRED TO DEVELOP, MANAGE AND HARVEST THE SITE.2
NSFC recognizes that detailed planning and consultation is required with the MNR, First Nation and Aboriginal communities, and the public to better understand the suitability of this request. NSFC recognizes that preliminary boundaries are subject to change to accommodate environmental, regulatory, Aboriginal or public concerns and values. NSFC remains flexible in the determination of final boundaries for the proposed development, and is able to give consideration to alternatives for developing the proposed blueberry farm, including:
Revising proposed area boundaries while giving consideration to site capacity being a key attribute of this proposal (target 551 ha)
Other suitable sites in proximity to the preferred location
Netting down the proposed development area would not result in the dismissal of this venture as no longer viable however a smaller project area would require an extended period to recover project start-up costs resulting in fixed costs being spread over fewer producing hectares. Variable development costs would decrease proportionally with hectares developed as would associated future revenues.
According to the Northeast Superior Forest Community Corporation Wild Blueberry Field Assessment Report; a minimum land capacity of 200 ha is required for wild
world class production centre, maximizing the area to be developed will be instrumental to this projects success. Given this NSFC would target a final area of 500 hectares once detailed planning has been completed.
THE CHAPLEAU-SULTAN SITE PRESENTS THE HIGHEST POTENTIAL FOR DEVELOPMENT DUE TO THE HOMOGENEITY
OF THE LAND, THE LARGE SITE CAPACITY (AREA), ACCESSIBILITY, HIGH NATURAL DENSITIES FOUND ON SITE, SANDY SOILS AND PROXIMITY TO A SUPPORTING COMMUNITY. THIS SITE IS CONSIDERED THE "JEWEL IN THE
CROWN". THE CHAPLEAU-SULTAN SITE CAN PROVIDE SOME OF THE BEST LANDS FOR WILDS BLUEBERRY
DEVELOPMENT IN ONTARIO AND EVEN CANADA. 1
APPLICATION APPROVAL PROCESS
project, consideration of its potential environmental effects, and a prescribed evaluation and consultation process. Because of concerns regarding the natural, cultural and socio-economic affects of this undertaking, an opportunity must be provided for regulatory agencies, the public, Aboriginal and First Nation communities and other interested parties to review and comment on this project proposal.
PROPOSED TIME FRAMES
Below is a description of proposed time frames within the project planning and approval process. This process and schedule is subject to change depending on MNRs review of the proposal and the level of interest that may arise.
Project Proposal Submission November 2012 Project Plan Review & Categorization December 2012 Project Proposal revised December 2012 Public Consultation begins January 2013 Obtaining Applicable Licenses or Permits Following successful EA decision Project Implementation begins as soon as permitting is secured
MILESTONES
Completion of project proposal : A preliminary Project Proposal was provided to the Ministry of Natural Resources in January 2012. Other ministries including Ministry of the Environment, Ontario Ministry Agriculture, Food, and Rural Affairs, Ministry of Aboriginal Affairs and the Ministry of Northern Development and Mines were subsequently forwarded a copy of the draft project proposal for comment. Subsequent revisions were made to the Project Proposal document through the course of the year, under the guidance of the Ministry of Natural Resources.
Project Plan Review and Categorization: The Ministry of Natural Resources reviewed the Project Proposal, categorized it as a B undertaking, and provided recommendations on consultation and next steps according to the requirements of the RSFDP Class EA. There may be additional requirements for revisions to the Project Proposal as a result of the formal public comment period. Proposed timeframes may require adjustment as this proposal moves through the approvals process.
Obtaining regulatory approvals and permits: Necessary licenses and permits will be required prior to project initiation. No work will begin on the project until appropriate permits have been obtained. The MNR will determine all required approvals and NSFC will complete all surveys, licence and permitting applications subsequent to a favourable environmental assessment outcome.
Construction schedule & start -up date: Operational activities are anticipated to begin in 2013. The construction schedule is dependent on the timing for the completion of the RSFDP Class EA for this undertaking. Further discussion on operational activities and proposed development schedules is provided in the Operations section.
DEVELOPMENT MODELS
There are two agricultural models for farming wild blueberries used in Canada: the traditional model which consists of fields that are developed fully for blueberry cultivation and an agroforestry model which develops fields to provide both blueberry cultivation and managed timber.
The traditional approach is common in the Atlantic provinces where blueberry farms are often developed in areas that have been clear cut, recently burned or are considered abandoned farmland. The agroforestry model has been successfully implemented in
. Jean area where commercial blueberry operations are established in forested areas. Detailed information on the agroforestry model is provided in Appendix C.
Organic production models are presently most suited to small scale application. Much of the organic production industry is based on small operations or from berries harvested from the wild.
DEVELOPMENT ALTERNATIVES
Below is an outline of options that NSFC has considered to be economically viable alternatives for the proposed undertaking.
Alternatives:
- 551 hectares using the traditional model into full blueberry fields
2. Develop project area using both the traditional model and the agroforestry model
- 434 hectares using the traditional model into full blueberry fields
PREFERRED ALTERNATIVE
Alternative #2 was determined to be preferred option for development . This alternative applies the traditional model at the outset to develop a large amount of the identified area. It also establishes an agroforestry pilot project on a designated portion of the area during successive field development. The site plan in Appendix D shows where the two models are proposed.
Rationale: The traditional development model simplifies the establishment and management of the fields ensuring that the early years of the project are focused on successfully establishing the farm and launching the business.
GIVEN THAT BLUEBERRIES ARE WORTH APPROXIMATELY $1.00/KG TO FARMERS, THE ANNUAL OUTPUT OF MANAGED FIELDS RANGES FROM $3360 TO $8967/HA, WHICH IS FAR SUPERIOR TO THE AVERAGE TIMBER
GROWTH OF CANADA S FORESTS OF 1.59 M3 /HA/YEAR (LOWE ET AL. 1996) WITH AN APPROXIMATE VALUE OF
$100/HA/YEAR.1
This alternative also values the need to work cooperatively over the long-term with existing industry in later years by refocusing on managing blueberries and forests on the same land base. An agroforestry pilot project could help to establish a future strategy for increasing the number of blueberry operations on Crown land and expanding the industry within the region.
In general, once the trees have been removed from the identified production area, development and management proceeds in the same way regardless of whether you are working entire fields or strips within a field. See the Operational Activities Section for additional information on how the development and management of the fields would occur.
Under this alternative, organic production may be viable over the long term in projects that that include development in proximity to sensitive features (i.e. water bodies). These areas could be earmarked as future organic production zones of the operation
1
and developed accordingly. Organic production could provide product diversification opportunities once the farm is well established.
Implementing the agroforestry pilot project as the last phase of development allows time for NSFC and its partners to explore the net effects of an agroforestry approach on the proposed commercial blueberry business as well as on the management of Crown timber. It also allows for resource management planning under this model in addition to examining implications on associated forest certification. See Appendix C for detailed discussion of agroforestry objectives and methodology.
DEVELOPMENT TIMELINE
Given the total area (551 hectares), the project proposes development in a phased approach spanning over several years. Changing forested land into blueberry producing land takes approximately 5-6 years once field development begins. This includes time for removing the overstory of trees, allowing stumps to decay before preparing the fields, a growing season, and then a flowering and harvest season.
PRE FEASIBILITY STUDY
NSFC Commercial Blueberry Production Business Plan 20081 was developed as a feasibility study for this project. It analyses the viability of a commercial blueberry production in the Northeast Superior region. This feasibility study formed the foundation and template for business planning and market analyses required for development of specific blueberry production projects throughout the region.
Why wild blueberries? The Lowbush Blueberry is a native plant. It flourishes locally in well-drained, acidic soils that are low in fertility and unsuitable for other agricultural purposes. There is an existing commercial blueberry industry in Canada in which demand far exceeds supply. With Ontario being significantly underdeveloped in this industry, the success of this commercial blueberry project is highly feasible.
Chapleau shares similar climate, geology, soil, and vegetation characteristics with the Atlantic Canada and Quebec locations where the wild Lowbush Blueberry industry is a major economic contributor. In these areas, agricultural management techniques are being used to dramatically increase yields from the native crop of wild blueberries; this managed crop is marketed as a wild blueberry crop.
There is no defined life span for an established wild blueberry field if properly managed, a field could continue to produce indefinitely. Considering the capacity to produce wild blueberries indefinitely, the management, harvesting and processing activities will provide employment opportunities that will continually be available on an annual basis.2
Drawing from the experience and success of established operations NSFC can apply the lessons learned and best practices for the Chapleau development and operations.
Industry Overview: The global wild blueberry industry is confined to eastern North America, where the plant is part of the native vegetation. Currently wild blueberries are mainly grown in Quebec, Nova Scotia, New Brunswick, Prince Edward Island and Newfoundland on both private and Crown lands. About 95% of total "low-bush" production (based on 2003 data) was marketed as processed (frozen). 1
1 The Northeast Superior Forest Community Commercial Blueberry Production Business Plan 2008
2 Level Plains Business Plan January 2010
The market for wild blueberries : With their reputation as a healthy food choice, blueberries have been a growing part of years. The growth may be due in part to increased demand for this antioxidant-rich fruit. While overall the fruit industry is becoming more competitive, both domestic and global markets are still increasing as the benefits of eating blueberries become widely known.
The table below shows the status of markets for wild blueberries.
Canada's Exports of Wild Blueberries to All Countries ($CAD)
2007 2008 2009 2010 Growth
wild blueberries - fresh 7,641,673 12,720,465 5,863,984 8,060,784 5.50%
wild blueberries - processed 183,889,813 159,016,984 120,859,657 122,248,533 -33.50%
Canada's Exports of Wild Blueberries to All Countries (Quantity,KGM)
2007 2008 2009 2010 Growth
wild blueberries - fresh 4,219,339 7,210,348 4,939,028 6,693,712 58.60%
wild blueberries - processed 36,933,934 38,164,143 35,980,919 43,560,965 17.90%
Canada's Top 10 Blueberry Markets ($CAD) includes wild and cultivated blueberries
Country 2007 2008 2009 2010 Growth
TOTAL: 323,707,933 301,309,121 236,365,651 245,153,119 -24.30%
United States 214,471,801 197,721,842 152,329,458 151,431,165 -29.40%
Germany 17,201,009 18,410,272 25,149,536 20,923,835 21.60%
Japan 33,600,297 28,857,222 18,997,067 21,999,062 -34.50%
Netherlands 7,056,938 11,358,814 6,992,744 11,089,010 57.10%
France 7,702,150 7,911,740 6,866,362 6,048,126 -21.50%
China 9,095,513 5,773,458 4,522,775 6,905,515 -24.10%
United Kingdom 15,912,021 16,027,928 8,065,032 6,105,329 -61.60%
Belgium 7,636,864 4,321,906 4,981,148 5,273,651 -30.90%
Australia 5,298,950 4,041,201 3,325,022 5,409,425 2.10%
South Korea 53,655 522,787 295,944 2,990,589 5473.70%
These statistics on blueberry markets are complete through year end 2010.2
1 http://www4.agr.gc.ca
Market Channels: A well defined marketing system has evolved in blueberry producing areas for getting the crop from the field to the end user. These market channels involve the following1:
Growers grow and harvests blueberries. A grower may or may not be a buyer or processor.
Buyers buy blueberries from the grower and sells to the processor. The buyer is usually, but not necessarily, a grower himself.
Processors buy blueberries from the buyer or directly from the grower. The processor (freezes) these berries at this plant. They are then either resold immediately or stored and held for future sales. Some processors are also large growers.
Manufacturers buy blueberries (mostly frozen but sometimes fresh) for use in the manufacturing of blueberry pies, tarts, muffins, etc., or other manufactured products.
Customers of the blueberry growing industry include processors, food wholesalers and retailers, manufacturers, value-added industries, and consumers. Large quantities of berries at competitive costs are required to supply processors and value added
Northeast Superior region in participating at the scale required by this growing industry.
Commercial blueberry products go well beyond a fresh product and can include: frozen, concentrate, puree, dried, sugar infused, and powder. A wide range of value-added products can also be produced from berries including: nutraceuticals, liquor and wine, baked goods, syrups, jams, ice cream, yogurt, and health and beauty products.
Additional information regarding feasibility and market analysis are available in the NSFC Commercial Blueberry Production Business Plan 2008.
Key Ingredients: Business Development Vision. The long term vision is to be influential in creating create a successful and thriving blueberry production industry in the Northeast Superior region. The vision for this project is to develop and launch a large scale mechanized commercial blueberry growing operation in the Chapleau area.
Industry analysis shows that blueberry production on a commercial scale is required to be competitive in markets other than the fresh market. Current hand harvesting in the wild is low yield and high cost, ruling out a sustainable and significant entry into the processing and other value-added markets. Thus it is imperative that commercial blueberry production is established.
The value of a clear vision is that it attracts the kind of support needed to nurture the industry. It also motivates people to buy-in throughout the region, helping to produce the critical mass necessary to grow the industry cooperatively across the region and to achieve economies of scale.
In the short term, the business development strategy will focus on fresh wild blueberries with the production of a quality controlled fresh product, branded and shipped to market. Branding and promotion will highlight the high quality and truly wild Northern Ontario blueberry. This will support a premium pricing strategy; distribution will focus on selected high quality produce retail outlets and direct-to-consumer venues, such as fa .
An existing cold storage facility in Chapleau may be used to set up a processing facility that will start by processing fresh berries, eventually introduce freezing and subsequently add a central processing facility for Northeastern Ontario providing other distribution access for other wild blueberry farming operations. A separate process will be undertaken relating to this facility.
In the mid- term, freezing berries could assist the development of smaller scale value- added activities, at the cottage industry level, and marketing to smaller manufacturing operations (wineries, etc.).
In the future it will become viable to enter into the larger scale frozen blueberry market to serve customers in the food manufacturing industries. As the quantity of berries being produced increases, from both the Chapleau-Sultan Wild Blueberry Farm as well as through other growing activity across the region, further local processing will be added for sale of frozen berries to these manufacturers. Ideally, the centrally processed berries would also be shipped back to NSFC communities who choose to expand their blueberry operations to include value-added manufacturing.
As part of planning for long-term product diversification from the blueberry farm, is interested in exploring possibilities of establishing some form of organic
managed in accordance with organic certification guidelines for Ontario produce and would become a separate value added product line. Development of organic production would be through the same methods except there would be no use of chemical soil applications.
Key ingredient: economies of scale. Economies of scale are very important in established commercial blueberry producing areas for both the individual
farmer as well as the industry as a whole. This is referred to as internal and external economies of scale.
With internal economies the cost per unit depends on size of an individual firm.1 Blueberry growers can reduce the cost per unit through operational efficiencies that increase production. Economies of scale are achieved because as production increases, the cost of producing each additional unit falls.2
External economies of scale occur when firms benefit from the whole industry getting bigger.3 In the case of blueberries, growers benefit from better infrastructure, access to specialized labour, improved techniques for production, good supply networks, large scale product branding, and global trade opportunities.
In Nova Scotia there are 1,000 growers (with over 33,000 acres (13,350 ha) in production and an average yield of some 5,000 pounds per acre (2025 pounds per ha) fuelling a small number of major processing operations.4 Economies of scale permit Nova Scotia growers to sell blueberries at a competitive price. They also facilitate the development of entire systems supplying the food processing industry in Canada and U.S. and diverse markets overseas.
NSFC will work to achieve similar economies of scale for Northeast Superior Region of Ontario as a long-term goal for business development.
Key ingredients: long term strategy and incremental progress . For many agricultural products, including the blueberry, grand visions can be realized through focused, strategic and incremental actions over time. In many instances, the time
1 http://www.investopedia.com/terms/e/economiesofscale.asp#ixzz1UpSuFB2S
2 http://www.investorwords.com/1653/economy_of_scale.html#ixzz1UpTBmRj4
3 http://www.economicshelp.org/microessays/costs/economies-scale.html
involved is substantial decades, not years. When improvements are realized in a regional industry, year-to-year over time, the results can be astonishing.1
Taking a phased approach to development of the Chapleau-Sultan Wild Blueberry Farm will help to ensure success for the project. A slow but steady rate of development will grow local knowledge and capacity for farm establishment and management activities.
Key ingredients: partnerships. Keeping in mind long term goal of developing a region wide commercial blueberry industry approach will consider existing industries and the challenge of balancing stakeholder interests on Crown land.
During the planning and implementation phases, engaging new partnerships and working with existing partners will be a priority to both establish and continue to grow the industry. NFSC partners include member communities, First Nations, Tembec, MNR, and Level Plains Inc.
Level Plains Inc. brings solid experience and a spirit of cooperation to both hands on farm development as well as the vision for a region wide blueberry industry. Its principals, Trevor and Tracy Laing, have successfully developed a blueberry farm in Wawa, and conducted site assessments across the NSFC region. Trevor continues to share his valuable experience and advice and is considered our blueberry expert in regards to this project.
SWOT Analysis is a planning tool that involves conducting a scan of the internal and external environment. As part of the pre-feasibility study, it can be used to analyze a
SWOT analysis: Strengths are internal characteristics that are helpful to achieving the objective. Strengths can give the business an advantage over others in the industry.
- As the proponent, NSFC has a business development vision and a long term strategic vision for the proposed project.
- To offset high costs of planning and field development NSFC plans to obtain funding and leverage additional dollars making this project attractive to investors.
- Once an operation is well established, it has an indefinite life-span.
- The proposed land has high density of the native Lowbush Blueberry suitable for a more intensive, managed blueberry growing operation.
- Local interest in economic development, diversification and new business opportunities is strong.
- There is strong technical and advisory support from government for resource use and economic development activities.
- Wild blueberries are high in antioxidants which have many health benefits including anti-aging effects, cancer inhibiting properties, heart health, urinary tract health, vision health.1
- Opportunities for value added products.
- Partnerships and cooperation with other growers in the region will provide external economies of scale for industry growth through marketing, processing and sales.
- Relative proximity to large market for fresh produce in southern Ontario.
- Substantial and reliable transportation network is in place and the Chapleau-Sultan Wild Blueberry Farm is with relative proximity to major markets of Sault Ste Marie, Sudbury, and Toronto. There is relatively easy access to US markets via Sault Ste. Marie and to international markets via the Great Lakes Seaway.
SWOT Analysis: Weaknesses are internal attributes that are harmful to achieving the objective. They can place the business at a disadvantage relative to others.
- Fresh blueberries are cla improper handling and storage. According to the Ontario Ministry of Agriculture, Food and Rural Affairs (OMAFRA), a one-
-life by one day.
- Initial development costs are high and production is delayed when opening fields from forests. The time involved is substantial and there is virtually no income generated during the early stages of developing the fields.
- As the proponent, NSFC is an organization that is funded through Natural Resource funding is on a yearly basis making
multi-year projects challenging to plan and conduct.
- Inability to control markets driven by supply and demand.
- Location of the farm is farther than ideal from markets.
- Crop will require good weather, adequate rainfall and abundant pollinators (bees) to produce high yields.
SWOT Analysis: Opportunities are external chances that are helpful to achieving the objective; these have the potential to increase sales and profits.
1 www.nswildblueberries.com
- A large population base with a growing appetite for fresh, foods and high quality specialty foods and a significant food processing industry create the demand required for this new Ontario industry to succeed.
- The anti-oxidant properties of the wild blueberries are a good selling feature and will continue to create demand for blueberry products into the future.
- The blueberry production industry is modest in size in Ontario, compared to Nova Scotia and Quebec; however there appears to be room in the market for an Ontario business, provided it can compete.
- There is potential to put Ontario on the map (with Northeastern Ontario as the capital) in wild blueberry production if the industry is developed successfully.
- There is a sufficient base of lands that could be developed for blueberry production.
- Northern Ontario communities are participating jointly in a number of activities to promote regional economic development and there is the potential to involve a number of communities in a co-operative development of a blueberry production industry. This will help build critical mass.
- There is potential to join forces with an industry organization when engaged in commercial production; this would provide access to information, markets and marketing resources.
- There is an existing and well supported bee industry in Ontario to help support pollination requirements for the blueberry farm.
- Bees as pollinators provide an opportunity to spin off a value added industry based on wax, honey and other bee related items.
- Distances are relatively close to fresh markets such Toronto and Sault Ste Marie as well to borders for shipping processed exports.
SWOT Analysis: Threats are external elements of the environment that are harmful to achieving the objective. Threats could result in trouble to the operation.
- Blueberry production and blueberry prices exhibit considerable variability. Producti