Penny Kelly, general manager of the Manitoba Egg Producers’ board, had an edge of wonderment in her voice as she described the prairie political expectation surrounding supply management these days.
“We are scrambling to stay ahead of government optimism,” she said. “I think prairie governments are bound and determined that the feather industry is going to expand on the Prairies. And if they perceive that the marketing boards or the supply management system are getting in the way, look out.”
Evidence to support her reading of political impatience is easy to find.
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“Supply management boards should be looking at how they can change to accommodate a different environment in Western Canada, where it is suddenly more competitive to have intensive livestock,” said Saskatchewan’s New Democratic Party agriculture minister Eric Upshall.
In Conservative Manitoba, minister Harry Enns sings much the same tune.
“It is not rocket science involved to figure out that feed costs are higher elsewhere in the country and on the Prairies, our competitive position improves,” he said in an interview.
He cited a grievance.
Nova Scotia has been priced out of the turkey business but rather than move the quota out of the province, some Manitoba farmers have had to pay to rent Nova Scotia quota.
This, said Enns, is absurd.
“It doesn’t make sense,” said the veteran politician, who was minister first in the 1960s when marketing boards were being created. “It is hard to explain it to an urban premier and cabinet that we are loaning money to farmers to lease quota from a province where it isn’t needed.”
This is one of the direct legacies of the end of the Crow Benefit subsidy on the Prairies.
Feed grain prices, and therefore the cost of producing poultry, have fallen.
According to Chicken Farmers of Canada data, Saskatchewan and Manitoba are the two lowest-cost provinces in the country for chicken production.
Provincial politicians know that. Grain incomes are down. They are demanding that the Prairies be given the chance to compensate for part of that loss by cashing in on value-added production fueled by cheap grain.
In regulated sectors like supply management, it means increased pressure to move quota west.
“I think there is a power play going on here,” said University of Saskatchewan agricultural economist and former provincial deputy minister Hartley Furtan. “I do believe if Saskatchewan does not get a greater percentage of production, it would be prepared to blow these boards up.”
During a winter spat with the national chicken production allocation system, Upshall made it clear Saskatchewan would leave the system if it did not win a greater share in the system.
“We in Saskatchewan started at 4.3 percent of national quota and now we are down to 2.3 percent and are handcuffed for trying to increase,” he said. “I ask if that is fair and I answer no. If supply management is not accommodating for a changing environment, it will have to change or suffer the consequences.”
The system has reformed to send more production west, but it is on trial west of Ontario.
All this talk of the new environment after the Crow rate mystifies some.
John Kolk, a southern Alberta chicken producer and president of Chicken Farmers of Canada, insists that production is attracted to areas near the market, rather than to cheap grain areas.
Yet he cannot deny political pressure on supply management has grown since the Crow Benefit subsidy was abolished.
“There is a whole lot more heat than light in this new-found prairie demand for quota,” he said. “The feed difference just isn’t that significant. But perception can become reality and there is no doubt that the system is under pressure because of this political perception. I think politicians are using it for their own ends.”
