Laurent Pellerin, chair of the Farm Products Council of Canada, bluntly told leaders of Canada’s chicken supply management system last week they have six months to save their system.
If they fail, the overseeing council will impose its own version of the pathway forward.
The 35-year-old agency that manages Canada’s $2.3 billion chicken industry is in crisis, unable to find agreement among the member provinces on how to allocate quota to capture new growth in the industry.
An unhappy Alberta has given notice it will withdraw at the end of the year if no agreement is reached.
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Ontario is also demanding change.
Industry leaders say the stalemate jeopardizes the system of production controls, pricing and import controls that make the system work.
“When we have internal strife, we put at risk the very system that provides this industry with its core strength,” CFC chair David Janzen from British Columbia told the organization’s annual meeting in Ottawa March 19.
In a later interview, he said Alberta’s six-year fight to get a higher share of new quota to recognize its growing population has been the galvanizing issue.
“The system is in jeopardy because Alberta has given notice it will pull out,” he said. “The risk is if you can’t get an agreement there, then there are other provinces like Ontario that are seeking agreement on allocating growth as well. If we don’t get a deal this year, there’s huge risk for the industry.”
Pellerin, in an interview after his speech to the meeting, said the CFC board must come up with a deal this summer or the council will.
“It is the future of the system. How can you run a system like this without one of the big players around the table, especially one from Western Canada? Now Ontario has its own demands.”
At its core, the dispute is over how to distribute new production quota for the growing industry. Historic provincial quota shares are not at issue.
Faster growing provinces are insisting on a greater share to serve their growing markets.
Other provinces are insisting that growth be allocated based on the traditional share of provincial production when the agency was created in 1978.
Alberta is the fourth largest chicken-producing province with quota for 93 million kilograms of production.
Ontario is the largest with more than three times Alberta’s share.
Added to the complicated debate is the question of how comparative advantage should factor into the quota allocation formula.
The CFC board met seven times over the winter to try to break the impasse before the annual meeting and the Feb. 22 deadline for Alberta to revoke its notice of withdrawal from the system.
They failed.
Last week, Janzen called a temporary halt to the divisive debate.
“We have to step back from the chicken cliff and take a breather,” he said.
“We have expended an inordinate amount of energy and need to re-charge our batteries. A short break will also allow provinces to reflect and consider how we move forward.”
They will try again in late spring or summer, knowing that if they fail, Pellerin and the FPCC that oversees the supply management agencies have vowed to produce their own solution.
