“We’re trying to find a sweet spot to address everybody.”
– MIKE DUNGATE, CFC
An old chicken industry nemesis about allocating production to provinces is re-emerging in a different form.
Chicken Farmers of Canada is under pressure to develop a system allowing different provinces to increase their production at different growth rates.
The CFC board will try next month to find ways and means of allowing differential growth for various industry players.
“We’re trying to find a sweet spot to address everybody,” said Mike Dungate, CFC general manager.
David Fuller, CFC chairman, said the board will devote a May 13 to 14 meeting in Ottawa to sound out industry representatives on the idea.
“We will begin to explore if there is agreement around the table on a potential option that will allow for differential growth within our system,” he said.
Fuller and Dungate attended the Manitoba Chicken Producers annual meeting in Winnipeg April 8.
Allocating production to regions based on market growth has been a perennial problem for the national agency, going back to the 1980s when provinces regularly fought over their disbursements.
The system back then had a top-down approach in which the agency set allocations based on a strict market-sharing formula established in a federal-provincial agreement.
That system changed after Ontario unilaterally began setting its own allocations in 1993, claiming the old system did not reflect true market demand.
Other provinces followed and the new bottom-up approach became national, making the old agreement unenforceable.
A new federal-provincial agreement in 2001 eliminated locked-in al locat ions and allowed for more flexible growth in a rapidly expanding market.
That worked reasonably well when chicken consumption in Canada grew by four to five per cent a year. Lately, however, annual increases are only one to two per cent, making differential growth more difficult, said Fuller, a producer from Nova Scotia.
Fuller said he hoped to have a framework for differential growth later this year. He couldn’t say if it would require regulatory changes “until we have more flesh on the bones.”
Waldie Klassen, Manitoba Chicken Producers chairman, said differential growth is not a huge issue in this province, where chicken production is stable.
Manitoba was responsible for 4.2 per cent of the 1.017 million kg (eviscerated) of broiler chicken produced in Canada in 2008, the same percentage as in 2007.
But Klassen said some provinces worry they could be forced to give up some of their allocation if other provinces received more under differential growth.
Dungate said that won’t happen. [email protected]