The agreement would give more quota to provinces with faster growing populations
Chicken Farmers of Canada is moving forward with a new quota allocation agreement while processors appeal the deal that will see some provinces grow faster than others.
Late last year, CFC announced the signing of a memorandum of understanding between all 10 provincial chicken boards.
The agreement would see 55 percent of future growth in the supply managed sector based on “provincial comparative advantage factors,” which include population growth and quota use.
Some provinces will receive less new quota than in the past, but CFC contends all provinces will still see gains. The issue of differential growth, which provides more quota to faster growing provinces, had been a sticking point in negotiations that stretched on for six years.
Officials say the concession was key to Alberta’s participation. Alberta Chicken Producers had withdrawn from the previous federal-provincial supply management agreement, and the province stands to gain the most under the new deal.
CFC executive director Mike Dungate said the organizations finalized the language in the agreement last week and would be seeking the approval of provincial regulators. He said the organization had hoped to have all the signatures by the end of June.
“If I look at the interim steps in our timeline to get there, we are about one month behind,” said Dungate.
However, processors in Saskatchewan and British Columbia are appealing the agreement. Dungate said an appeal in Manitoba has been withdrawn.
Saskatchewan’s agriculture ministry previously confirmed that the province’s Agri-Food Appeals Committee would hear the complaint from Sofina Foods and Prairie Pride Natural Foods.
“I’m not surprised that there’s an appeal of this operating agreement amendment or the MOU. I am surprised that it came from Saskatchewan,” said Dungate.
“Because while nothing is certain in terms of where the growth of chicken will be allocated, based on our projections of the model, Saskatchewan would come out third best in the country.”
Projections offered at a Chicken Farmers of Saskatchewan meeting earlier this year showed the new formula would award the province 71,000 fewer kilograms over four eight-week production cycles, during which time the province’s production grew by more than 777,000 kg.
British Columbia, Quebec and Maritime producers would see more significant declines.
“I could’ve seen it from somebody in the Maritimes who were getting hit the hardest in terms of this agreement, in terms of future growth,” said Dungate. “But I want to make it clear that it’s an agreement that will see everybody grow. It just means that some will grow faster than others based on comparative advantage factors.”
Robin Horel, president of the Canadian Poultry and Egg Processors Council, said all appealing processors are members of his association, which remains supportive of supply management.
“They are largely in agreement with the new allocation system,” he said.
“They feel, though, that there should be one more layer or level added to it, and that is the ability for an additional component of regional differential growth.… A lot of details would have to be ironed out as to how it might work, but we believe it would be a reasonable solution and a reasonable compromise, but so far it appears we’re the only ones that think that.”
Dungate said a preliminary hearing in the Saskatchewan case, to see if the appeal will move forward, was scheduled for mid-May.
“It was a very tough negotiation as people made the compromises to come to the deal,and I don’t doubt that people made compromises that stretched the limits of where their comfort zone was, absolutely,” said Dungate.
Economic contribution of Canada’s chicken industry:
- $2.3 billion in farm cash receipts.
- 2, 882 farmers, plus 185 processors, creating 23,559 direct jobs and 55,943 total jobs.
- Ontario is the largest chicken producing province, with 1,026 farmers earning $735 million in farm cash receipts.
- Quebec: $609 million.
- British Columbia: $351 million.
- Alberta: $203 million.
- Manitoba: $94 million.
- Saskatchewan: $89 million.
- Chicken farmers in the Atlantic provinces earn a total of $179 million in cash receipts.
Source: Chicken Farmers of Canada/Informetrica Ltd. Data based on 2011 study