The Rural Voice, 1980-02, Page 9Broiler producers
BY ADRIAN VOS
It sounds almost like a refrain. "Before
we had quotas we were always on the verge
of bankruptcy."
The broiler producers echo the lament of
the dairy men and the egg producers, the
tobacco growers and the turkey producers.
Former agriculture minister Eugene
Whelan said that he would impose import
quotas if the broiler producers would set up
a system of production quotas.
The producers had a tough time of it, for
there was • much resistance from the
Consumers Association, the daily
newspapers and some academics. It was a
long time before Mr. Whelan fulfilled his
promise and approved the national broiler
agency. When it came to imposing an
import quota the minister procrastinated
again, and it was not until after the
conclusions of the GATT agreement that
negotiations were begun with the USDA.
By that time John Wise had become
minister of agriculture and the negotiations
took place under his eye.
While all this was going on, the
processors hadn't been idle. They knew
that quotas are always established on
historical market and production figures
and in 1976, when it became clear that
quotas couldn't be too far away, they
increased their imports tremendously to
52,647,000 lbs. as against the highest
previous figure ever of 11,847,000 lbs.
When the negotiations with USDA were
completed the negotiators came back with
an import quota that will reach 52 million
pounds in 1981.
To an outsider not familiar with the
history, it seemed eminently reasonable,
for domestic production would still be 93.7
percent of the market. The problem that
arose was that the historic allocation of
quota also applied to the importing
processors who are mainly situated in
Ontario. Thus the percentage coming into
Ontario is much higher than that going to
the rest of Canada.
Now not only the producers are upset, but
processors with a lower allocation are too.
UCO's "Tenderflesh" claims that they
have always imported the minimum
needed to remain competitive with other
processors, and now they can't get more
than the minimum share of the cheap
birds from the U.S.A. Don Slinger, poultry
division manager for UCO called it: "A
poor decision. Canada's negotiators should
have been tougher."
Apparently Ag. minister Wise has had
second thoughts and has promised to
renegotiate the imports.
The price formula for broilers is not as
clear cut as the one for eggs or for milk. It
must of necessity include a consideration of
the price of the imports. This makes the
formula no more than a guide line for the
broiler boards. If the buyers (processors)
don't like the price, they are able to distort
the market by bringing in a flood of
imports, for a processor cari, bring in his
whole quota in a month or can divide it
evenly over the whole year.
The usual allocation difficulties between
the provinces plagues the national agency
as well. Alberta didn't join; they first want
a flexible quota so that as its local market
expands, so must the quota. Newfoundland
decided to remain outside because their
local processing industry is quite small and
they want to be sure that it can grow. The
other provinces don't want the uncertainty
and the chance of losing quota because it
would make their production inefficient.
The old complaint of a new producer
wishing to enter the industry who can't
because the quota is tied to a property and
not to a person, is often heard. The only
way to enter is to buy a proeprty which has
a quota attached, for the total provincial
quota plus the imports is equal to the total
market. So new quota can't be given unless
there is new market.
Vertical integration has been reversed
since the broiler board came into existence.
Contracts between feed companies, who
pay producers a certain amount per bird,
are almost non-existent according to
George Underwood, a board director from
Huron County.
The broiler board is made up of nine
elected members and one appointed to
represent the "Roaster" producers.
When objecting to supply management
of the marketing boards, editorial writers
often have quoted Professor Forbes of the
Fraser Institute of the University of B.C.
and lately also Gordon Hill. past
president of the OFA, that quota cost is a
capital cost which is reflected in the cost of
production. Forbes says that this is a cost
to the consumer, but Hill says that this cost
is absorbed by the producer.
One thing quota boards can be sure of,
from now on the first part of Mr. Hill's
statement will still be repeated five years
from now, while he can keep on protesting
that there's no cost to consumers, but to
no avail.
and Commercia
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VANDEN HEUVEL CONST.
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or Ken Janmaat
R • R • 2, Goderich
527-1858 after six
THE RURAL VOICE/FEBRUARY 1980 PG. 7