Quebec has cancelled its threat for the time being to withdraw support from the national chicken marketing system in a dispute over weakening production controls and low producer incomes.
However, the Quebec chicken marketing board last week put Chicken Farmers of Canada on notice that it expects radical changes to the national system within a year – or else.
Quebec, along with producers and marketing boards from several other provinces, have complained a decision two years ago to weaken national production controls has created too much processor power in the system, too much surplus production and low producer prices.
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Quebec had threatened to quit paying levies to Chicken Farmers of Canada May 1. That would have deprived CFC of close to one-third of its budget.
Last week, in the face of CFC promises that change is on the way, Quebec dropped the threat.
“At the agency, obviously we are relieved,” said CFC chair John Kolk of Alberta. “We also recognize there is a big job ahead for us. The pressure is very strong. The Quebec chairman, Luc Lamy, said very clearly this is a crisis we have to address.”
In fact, leaders of the industry have agreed to redesign the system by next April to find a way to better control production and to guarantee adequate returns to farmers.
In 1995, the old supply management rules were changed to allow processors in each province to negotiate production levels with the provincial board. Each province was supposed to limit production increases to no more than eight percent annually.
The result, critics say, has been overproduction, storage inventories for processors and farmer returns lower in some cases than production costs.
At a May 13 CFC board meeting in Ottawa, directors are to approve an eight-month process to develop a new national system.
They also will debate a Quebec proposal that there be an interim agreement to better control the system until a permanent plan is in place next year.
Kolk said he is confident a new agreement can be reached for next year. “Right now, plan A is to make it work and plan B is to make it work.”
However, the details of how the system will work during the intervening year are not clear.
He said discussions are under way to find rules which will satisfy outcry over low producer returns and surpluses.
Possibilities discussed
Officials from the industry and the prairie provinces were discussing possible arrangements last week.
“There is a recognition from the processor side that we might have to balance supply and demand a little bit tighter than we have in the past but still try to maintain the flexibility that several of the provinces need,” he said. “That is kind of a fine line.”
