Canada’s chicken farmers have found out that giving processors more control over production levels is no way to help the industry prosper, says a spokesperson for the Quebec chicken industry.
Serge Deschamps, general manager of the Quebec chicken marketing board, said last week the 1995 decision to give processors a major say in provincial production levels has not worked.
Dealing with individual provinces, processors have negotiated production levels that have produced surpluses. Inventories have risen to 23 million kilograms.
“Obviously, we are not doing things the right way,” Deschamps said in an interview from Montreal. “We thought the processors would be more capable to address the market requirements in a national supply management system. I think even they will agree they have not done a very good job.”
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The result has been falling producer prices.
Farmers in many parts of Canada have concluded the processors were given too much power in the industry rush to move away from old supply management rules to become more “market responsive,” said Deschamps.
That has resulted in a decision by Chicken Farmers of Canada to find a new formula for national production controls and higher producer returns by next year.
Threat withdrawn
Because of that decision last month, Quebec withdrew a threat to withhold close to $1 million in annual levies from the national chicken marketing agency and lobby group.
“We are back like the other provinces in terms of sending our levies back,” he said. “We don’t know what will be the shape of the new system but directors have agreed to build a new system and we believe they will work in that direction. We will work with others to build this system according to the needs of producers.”
He said some producers at the annual meeting of the Quebec chicken marketing board in late April wondered what would happen if the promise of reforms in the system are not realized after a year.
“This concern was voiced by our producers and we don’t know how to answer ‘what if’ questions,” said Deschamps. “If we are unable to build a new system, it will be proof that the will was not there from the start. For now, we presume a new system will be in place.”
In mid-May, Chicken Farmers of Canada directors from across Canada gather again to figure out how to control production and increase prices during the next nine months while a new permanent agreement is being negotiated.
Deschamps said Quebec has made a proposal for a truce during the interim. It will be voted on by directors May 13 in Ottawa.
