Canada’s supply management agencies must work hard to make sure the system works well and is transparent in the face of continued public scrutiny, says the system’s watchdog.
Laurent Pellerin, chair of the Farm Products Council of Canada, told the Chicken Farmers of Canada’s annual meeting in March that supply management agencies must deal with distribution of quota to provinces, cost-of-production pricing formulas, quota value and public perception.
They should also consider a levy system allowed under the legislation to collect money for research and promotion. Mainly, they should make sure their system can stand up to its critics.
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“FPCC’s mission is to work with its partners to ensure that the supply management and promotion-research systems have the flexibility needed to respond to current and future challenges in a flexible, acc-ountable and transparent manner so that they can withstand public scrutiny,” he said.
CFC faces a challenge from Alberta and Ontario over complaints that provincial population growth is not being recognized by increased production quota.
And critics increasingly are complaining that supply management hurts Canadian trade goals and raises domestic prices for poultry, eggs and dairy. The FPCC does not oversee the dairy sector.
Pellerin said rather than rely on their history and political and regulatory support, supply management leaders must be “creative and have innovative thinking so that the system continuously improves its efficiency and has the flexibility needed to address current and future challenges.”
He said the chicken system must be flexible in dealing with Alberta and Ontario’s demand for more production quota based on population growth.
He said the 40-year-old Farm Products Agencies Act has a clause that “directs the agency to use the competitive advantage in allocating additional quota. Council is ready to help move this file forward.”
More processing capacity in the Maritimes means there will be more pressure to arrange interprovincial chicken movement to available plants.
And despite the system’s protection from unfettered import competition, Pellerin said sound economic principles must be used to make sure that cost-of-production and price decisions are reasonable.
“Stable prices that reflect producer costs and which deliver a reasonable return for producers are two reasons why we have supply managed agencies,” he said.
Pellerin unveiled a new four-year strategic plan on how to keep the sector stable and protected from critics.
“The chicken system needs to operate in a flexible, accountable and transparent manner that can pass the test of public scrutiny,” he told the CFC.
“The current public criticism of supply management will likely continue, so the benefit of this public policy will need to be demonstrated.”
His comment reflected a key part of the FPCC’s four-year strategic plan.
“The case must be made that the supply management and promotion-research systems operate within reasonable parameters that are transparent and that stakeholders within the systems continuously strive to address and minimize any negative impacts or issues that arise,” says the plan.
