Leaders of Canada’s chicken industry bowed to their critics last week and agreed to rewrite the rules governing their national supply control and pricing system.
However, it will not be clear until late this week or next whether the promise of reform will be enough to keep Quebec fully in the national system. It has threatened to quit supporting Chicken Farmers of Canada May 1 unless there is reform.
The Quebec chicken marketing board was to meet April 23.
“That should give us some direction about what happens next,” marketing board general manager Serge Deschamps said.
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Quebec has threatened to withhold its $900,000 in levies to the national agency unless the rules are changed to impose more discipline and higher farmgate prices on the system. It wants an interim agreement until new permanent rules are worked out.
Complaints heard
Last week at a special meeting in Ottawa, directors of the national chicken producer agency went partway to meet complaints from Quebec and other critics.
They did not approve Quebec’s proposal for an interim agreement imposing tougher national production controls. There was opposition from processors who want to retain a major say in production levels and from prairie directors who object to restrictions on their expected sharp growth.
There will be a vote at another directors’ meeting in mid-May.
They did agree, however, to rewrite the long-term rules in order to increase farmer returns and to impose more permanent discipline into the production control system.
“Part of Quebec’s objectives were achieved,” chicken farmers’ chairperson John Kolk said in an interview late last week. “We are firmly on the road of working on a new allocation system with some pretty intense deadlines. There’s a recognition of the need to change, so they’ve met some of their objectives.”
The national group has given itself until early next year to develop new rules, to be in place by April 11, 1998. “We have a lot of work to do between now and January,” Kolk said from his Alberta farm.
The problem it is trying to fix flows directly from a 1995 deal to revise the more rigid supply management system. As a result, production levels that once were set and enforced nationally were decentralized to the provinces where the provincial boards negotiate with local processors. They are supposed to honor an annual increase cap of eight percent.
Over production, lower prices
However, critics from Quebec and several other provinces, as well as producer representatives, complain the new deal has resulted in surplus production. Processors stockpile the surplus and then reduce prices to farmers.
Kolk said industry leaders now realize they did not spend enough time making sure the new rules would ensure farmers make money.
“The spark which ignited this problem is concern about low producer returns,” he said. “At the end of the day, what comes out must include acceptable producer returns.”
Kolk, elected as chair last month, said he will attend this week’s Quebec meeting.
He said losing Quebec would be a blow because it would take away one-third of the agency’s revenues and make a national program difficult to operate.
“The reality is, if we don’t have Quebec and Ontario solidly in the game as part of the decision making, we have major problems,” he said.
