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Regulatory Change Surprises Chicken Producers

“We were not

consulted.” – Wayne Hiltz, Manitoba Chicken Producers

The province has caught Manitoba broiler chicken farmers off guard by ordering them to develop a plan to ensure supplies of live chicken to processing plants.

Producers say they didn’t ask for this and the demand by the government took them completely by surprise.

“We were not consulted,” said Wayne Hiltz, Manitoba Chicken Producers’ general manager.

The move, announced by Agriculture Minister Rosann Wowchuk April 30, requires the chicken board to come up with a plan to provide the province’s two chicken processors with stable supplies of chicken.

To accomplish this, producers must give 42 to 49 weeks’ notice (equivalent to six to seven production cycles) before switching chicken deliveries from one processor to another.

Wowchuk implemented a regulatory change to impose the required notice. Hiltz said the board office received the order the next day.

The chicken board got a heads-up that the move was coming after meeting with the minister earlier in the week. Wowchuk also met separately with processor representatives to inform them.

The board has until October 2009 to consult with processors and come up with a long-term supply plan. Wowchuk said she expected a preliminary report by August.

Wowchuk called the action necessary to keep producers from shortchanging processors by switching abruptly from one to another. The previous regulation did not require either side to give notice before cancelling delivery contracts.

Now processors will have guaranteed supplies to help them make long-term marketing plans, she said.

“This will enable chicken producers to take the time to put a plan together that will bring stability to the industry,” said Wowchuk.

“We decided that the processors and producers should work together to develop a made-in-Manitoba plan that would ensure we have adequate supply of product that will enable processors in this province to move forward.”

Hiltz said the board did not know of a problem with producers switching processors, nor was it aware that processors had asked for the regulatory change to require notice.

“We were not aware that there was an initiative by the processors. Our understanding is that this is a government initiative and it was not initiated by the processors or the producers.”

Hiltz said the number of producers who switch processors “has been minimal.” Even when they do, they give two production periods’ notice, which is “all the processors ever asked for.”

Manitoba has two federally inspected chicken processors: Granny’s Poultry Co-operative (Manitoba) Ltd. and Dunn-Rite Food Products Ltd.

“NOT CLEAR”

Randy Schroeder, Granny’s board chairman, said the co-op did not ask for the change and it’s “not 100 per cent clear” why the government acted as it did.

Schroeder, a broiler breeder at Lowe Farm, said producers sometimes talk about switching processors but they don’t often do so.

A Dunn-Rite company official could not be reached for comment.

Schroeder speculated Wowchuk may be under pressure from processors in other provinces to increase chicken supplies. The recent Manitoba Chicken Producers annual meeting heard that processors in one province regularly try to access supplies in another province when local volumes fall short of demand.

Chicken Farmers of Canada next week will hold a brainstorming session on “differential growth” – that is, providing varying production allocations to regions with different growths in demand.

This is the second time this year that Wowchuk has made a unilateral change affecting a supply-managed industry. In January she dismissed the independent members of the Manitoba Milk Prices Review Commission and replaced them with civil servants. The commission is now a rubber stamp to approve fluid milk prices in the western milk pool, which includes Manitoba. [email protected]

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