Chicken Farmers of Canada, the national chicken marketing group, meets next week in an atmosphere of both uncertainty and crisis, several board members said last week.
The Quebec chicken marketing board has announced that effective April 1, Quebec no longer will pay levies to the national organization.
It would mean CFC would lose almost a third of its funding.
“When you lose 30 percent of your funding, of course it’s a crisis situation,” said Lloyd Sandercock, chair of the national marketing group, after a speech to a Chicken Farmers of Manitoba.
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But implications for the national chicken marketing system go far beyond funding, said Chicken Farmers of Ontario chair John Maaskant.
“It is obvious that Quebec is a major partner in the national system and we have to try to come to an agreement with them,” he said March 17. “We can’t go ahead without Quebec. I believe we will come out of this with a strong organization. It is a crisis but I don’t think it is hopeless.”
He said the full implications of Quebec’s announcement will not be known until the CFC board meets March 26.
Dispute brewing
Quebec’s early March announcement that it would quit paying levies to the national organization caught Chicken Farmers of Canada officials off-guard, although dissent has been brewing for some time.
There has been concern from a number of provinces, endorsed by the CFC board, about low producer returns since the national system was converted to a more demand-driven basis in 1995.
After a September 1995 agreement, the old system of production quota based on historic provincial production and market share was replaced by a system in which each provincial board negotiates production levels with their processor customers.
From some quarters, there have been complaints that the new flexibility means less predictable production volumes and prices. From the beginning, Quebec has been a critic of the new national system.
“They’ve been unhappy with low producer returns in Quebec and they’ve been trying to change the way things are being done,” Sandercock said.
Chicken producers pay 3.4 cents to the marketing agency for every 100 kilograms of chicken they produce. Quebec production accounts for about 30 percent of the national total.
Sandercock said under the new system, provinces can increase production up to eight percent each year if there is demand.
“That stops one province from taking a great big increase and putting too much product on there,” he said.
Sandercock said he and the rest of the board find Quebec’s decision “unacceptable.”
He said the national agency wants to meet with Quebec producers to find out how they can fix the situation.
