A 2008 decision by the federal supply management system watchdog to “reinvent itself” as a more activist body has landed it in court and created tensions with the agencies it oversees.
Chicken Farmers of Canada has asked a judge to rule on whether the Farm Products Council of Canada exceeded its jurisdiction last year when it delayed approving CFC quota orders for several months.
“Our relationship with the council is strained at the moment and this has been a distraction for us,” CFC chair David Fuller said March 23.
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“Our intent is to define the jurisdictional lines. We don’t want to challenge the importance of the council but we need to understand its power.”
He said the council appears to have changed its role from making sure supply management marketing agencies follow “due process” in making quota and levy decisions to judging the decisions themselves.
“We don’t think that should be its role,” said Fuller.
Brent Montgomery, acting chair of the FPCC, said the council agrees that clarification of jurisdiction and roles will be helpful.
“The important thing is to clarify roles and understand who’s responsible for what,” he said. “If that has to be done in court, that’s the way we have to go.”
The issue is before the Federal Court of Canada. Estimates about when a decision will be announced range from next autumn to sometime next year.
Montgomery said the FPCC decision to intervene in a dispute between the chicken marketing agency and some of its processor and further processor customers came after the council decided to change its governance structure and improve the way it deals with agency quota, levy orders and customer complaints.
The council operates under federal jurisdiction and the federal government appoints commissioners.
As part of the revamping, it established an “oversight committee” to try to mediate disputes.
The flashpoint was a decision by CFC in one 2009 production period to increase production quotas by one percent while processors and further processors were calling for cuts of between four and five percent because of a softening market.
Ten producer representatives on the quota allocation committee voted for the increase and the four industry representatives voted against and then complained to the council.
The acting chair said there is a long history of industry complaints about CFC quota decisions.
“We felt the complaints seemed to be systemic in nature so we set up the oversight committee to work with both sides to see if we could improve the chicken allocation process.”
CFC said it was none of the council’s business and went to court with the support of six provincial boards.
Egg Farmers of Canada chair Laurent Souligny said the council’s new activism also has caused problems for his agency. “We prefer to sit down with council and try to work something out.”
The processors called for a public inquiry into the CFC quota allocation process but were turned down. In the CFC annual report, executive director Mike Dungate wrote that the board of directors took the overseer body to court because relations between the two had become disruptive.
