Howard Hilstrom can’t understand how dairy, poultry and egg industries will be able to defend exporting products at a lower price than they charge in Canada.
“The supply managed sectors cannot have it both ways,” said Hilstrom, a Manitoba MP and the Reform party’s agricultural critic.
He said export plans assume Canadian consumers will subsidize forays into export markets. But supply management leaders say his logic is simplistic.
“People look at it black and white,” said John Stolp of St. George, Ont., chair of the Canadian Turkey Marketing Agency. “They need to hear more than just a black and white answer to it.”
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Industry leaders say much of the added production for exports will come from extra space in barns created over the years as cows, chickens and turkeys became more productive. Producers won’t have to buy more expensive quota to fill the space, if the milk, eggs or poultry are going for exports.
While producers get about $1 per dozen eggs sold to the table egg market, eggs going to processors fetch an average of 70 cents per dozen, and at times, as little as 45 cents.
Producers have to calculate whether the marginal costs of producing more eggs is balanced by the benefits of more sales, said Neil Currie, chief executive officer of the Canadian Egg Marketing Agency.
“If you can do a little better than your feed and bird cost, then you’ve got some contribution to overhead.”
Domestic products are often priced higher because they are very different from export products.
“The reality is, what’s exported is, for the most part, not used domestically,” said John Kolk, chair of Chicken Farmers of Canada.
Table eggs must have strong shells, centred yolks and no blood spots. Eggs for processors have fewer quality requirements, said Currie.
Louis Balcaen, a Manitoba farmer on the Canadian Dairy Commission, said price discrimination is a common business tool allowed under world trade rules.
For example, when he flies to Ottawa in the middle of the week, he pays as much as $1,600 for a seat. Yet other people on the plane may have paid more to sit in first class, or as little as $200, with more travel restrictions, noted Balcaen.
But these sectors have thrived because of a government-granted virtual monopoly.
Daniel Gouin, agricultural economist at Laval University, said this legislative base means marketing boards must expect more public scrutiny.
“It’s not different than GM or Cargill, but it’s public, and that’s the big difference.”
