Unsatisfied with increased allocations of egg quota by the Canadian Egg Marketing Agency and the solution recommended by the Farm Products Council, Saskatchewan is seeking a second judicial review.
Last summer, the Saskatchewan Egg Producers, along with the Saskatchewan government and three individual farms, applied for a judicial review of the egg agency’s approach to allocating increased, or overbase, quota to the provinces and territories.
On Jan. 14, SEP filed for a review of the new January to June quota allocations.
Saskatchewan feels that having only 3.9 percent of the egg quota allocation in Canada has meant that its concerns about the methods CEMA uses to allocate quota are not being given a fair hearing. Allocation rules also breach the 1976 federal provincial agreement that set up the national agency, they claim.
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Saskatchewan producers believe their province should receive increases in quota that exceed their share of national production and that the system has unfairly reduced the province’s share of the national production quota.
In 1973, during the negotiations to establish the Farm Products Marketing Act, Saskatchewan had 4.7 percent of production.
SEP general manager Michael Katz said CEMA’s policies favour provinces that have the greatest share of the market and the largest population base.
He said the problem was compounded in 2000 when CEMA increased quotas to accommodate a growing industrial egg processing sector. Despite complaints at that time from the smaller producing provinces, that situation remains unresolved to Saskatchewan and Manitoba producers’ satisfaction.
Saskatchewan said the part of the agreement that created the supply managed sectors in Canada, called the comparative advantage principle, is not being given the weight it deserves in determining how allocation is done.
Saskatchewan contends that the principle should provide increased production for regions that are dependent on and efficient in production of any broad sector of the economy. In this case, agriculture in Saskatchewan, should be given a larger share of any increased quota.
Last year, Saskatchewan was given an increase of 2.5 percent of the overbase increase despite having 3.9 percent of the production.
Katz argues Saskatchewan should be receiving a 12.9 percent increase of all current and future overbase quota allocations, in addition to a flat 100,000 bird increase due to inequities caused by the 2000 increase to the national flock by 810,274 birds.
Last summer, CEMA offered to provide Saskatchewan 100,000 additional birds in an effort to restore that province’s 1973 share of production. Saskatchewan rejected the offer because it failed to address future quota allocations.
CEMA was warned in 2000 that its distribution model for the 810,274 bird increase, basing it on provincial human population, was not in harmony with the federal provincial agreement and was a “one-time-only” situation.
But Katz said CEMA has used it as its main factor in determining overbase increases ever since.
Leo Kristjanson, former president of the University of Saskatchewan and an agricultural economist, signed the original agreement in 1976. He said the reason Saskatchewan agreed to it was the inclusion of the principle of comparative advantages of production and its potential benefits to that province because of its relatively large agricultural sector.
SEP has worked with agricultural economist Andrew Schmitz to establish a definition of comparative advantage that reflects Kristjanson’s interpretations of what he signed nearly 30 years ago.
CEMA disputes the interpretation using its own economist and said in hearings last spring that despite the presence of the principle in the agreement, it is not bound by those terms when establishing overbase quota.
The Farm Products Council agreed to a point, saying CEMA should be allowed to interpret comparative advantage for itself. But in its decision about Saskatchewan’s 2004 complaint, the council recommended that CEMA begin talks with Saskatchewan on an “urgent basis.” The council said the dispute threatened to undermine supply management in Canada and needed to be resolved.
“We have yet to hear from CEMA. I guess they don’t think it’s that urgent,” Katz said.
