OAK BLUFF, Man. – Manitoba egg farmers will defy other provinces’ efforts to keep their production from growing.
They emerged from a meeting here Feb. 14 confident that Manitoba will be able to continue its strategy to become a major processing centre for eggs for the export and Canadian markets.
In January, the province was fined for producing too many eggs by the Canadian Egg Marketing Agency.
“We’re not paying,” stated Harold Froese, chair of Manitoba Egg Producers.
The province will also appeal the new quota allocation announced by CEMA last week, said Gordon McKenzie, head of the Manitoba government council that oversees supply managed agencies.
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Manitoba was shut out of the new allocation.
It’s the latest development in a decade of dispute over how provinces should share growth in the lower-priced market for eggs used by processors.
Speakers at the packed meeting gave out few details of their strategy to defy the fines and the quota allocation.
They said the province will appeal to the National Farm Products Council that oversees supply management for poultry.
They also dangled the possibility of legal action.
“We will fight it until there’s no more battles to fight here,” said McKenzie.
But the province will not threaten to withdraw from the supply management system, said McKenzie.
That’s because it relies on the more than $20 million in levies that come from other provinces through CEMA.
The levies help ensure producers across Canada receive relatively similar returns, no matter what proportion of their eggs are sold to the higher-priced table market or lower-priced processing market.
Froese noted processors have to agree to sign contracts for the eggs before the new quota of 810,000 hens can go into farmers’ barns.
MEP board member Jamie Logan said farmers will pay higher levies of three to four cents per dozen because of the new allocation.
The cost of levies are usually passed on to consumers through cost-of-production formulas.
But Logan said he isn’t sure Canadian consumers will stomach the extra total costs of $14 million represented by the new allocation.
Manitoba originally agreed to the new formula for quota allocation in July, when other players in CEMA agreed to study the province’s controversial Grow For Processing export program.
The voluntary program lets farmers produce eggs at the world price without receiving levies from the supply management system.
Two recent studies of the program, done by an outside consultant, showed eggs going into the export market were not affecting the rest of the supply management system.
The consultant recommended other provinces use Manitoba’s program as a model for meeting the future requirements of Canadian processors.
Through the program, Manitoba has a contract with Inovatech for the eggs from 715,000 hens.
CEMA gave Manitoba permission for only 200,000 hens for the contract, but farmers have about 330,000 hens in their barns.
Inovatech imports the rest of the eggs it needs from the United States.
Manitoba producers are upset that CEMA is insisting on further reviews and audits, and fining them for the extra production.
