I suspect there is a boondoggle taking place. This year, for example, there were so many surplus eggs that processing plants couldn't handle them all. At one point there was a two-week backlog, Tim Lambert, general manager of Egg Farmers of Canada (the national egg marketing agency) told me during the annual meeting of Egg Farmers of Ontario earlier this year.Yet a month earlier the egg graders were claiming they couldn't get enough eggs, so they applied for supplementary import permits which were granted by the federal government. How many were granted remains a question the Department of Foreign Affairs and International Trade has yet to answer in response to an Access to Information request I filed months ago.
When this happened in 1974-75, Ontario Agriculture Minister William Newman judged it to be a breach of marketing board regulations and he moved to kick Joe Hudson, owner of Burnbrae Farms Ltd., off the Ontario egg board. However, because Newman lacked authority to dismiss an individual board director, he resorted to his power to dismiss the entire board. Then he re-appointed only those not in contravention of board regulations; that also caught Waldron Eckstein of New Hamburg who happened to be a few birds over quota.
I remember this case well because I worked jointly with Lloyd Bibby, then the farm reporter for the Waterloo Region Record, to expose Hudson. We obtained information on Hudson's importing from the U.S. and his sales of surplus eggs to the marketing board. Hudson sued, but withdrew his lawsuit when I assured him that the information on imports had not been supplied by another board director, George Lindblad.
I have never revealed my source, nor will I until the person dies. But I know the information was accurate and it nailed Hudson. Let's just call this a case of a helpful whistleblower.
Today his arch rival, Bill Gray of Gray Ridge Egg Farms, is beleaguered by another whistleblower. I have some Access to Information requests out about eggs Gray imported. I'll let you know when I get documentation.
This situation of supplementary imports during December and surplus declarations in January is an enormous cost to farmers who pay the difference between "table market" and "processing" prices. Table market prices are much higher because there is a tariff of 192.3 per cent on imports; if you buy $1 eggs in the U.S., the tariff on those eggs will be another $1.92.
But if you gain a supplementary import permit, there is no tariff, so the imported eggs are much cheaper than those the graders buy from Canadian farmers.
Processing egg prices are set low enough to enable Canadian processors to compete with imports, meaning in practice that they reflect Barry-Urner market prices in the U.S. This leaves importing egg graders in a no-lose situation. If they can sell the imported eggs at table market prices, they make a windfall profit. If they can't, they dump them on the egg board as surplus eggs at little or no cost. And if the importers are Gray or Hudson, they can process the surplus eggs at their own facilities, pocketing the processing-industry profits.
It's egg farmers who are burdened with the risks and losses because they fund the gap between table and processing-market prices through a levy they must pay on every dozen of Grade A eggs they market.
So how come, when Hudson was both importing and declaring surplus eggs in 1974-75, he was found guilty of breaking regulations and kicked off the board, but nothing is being done these days?
It has taken me months to chase down the answer. Neither the Ontario Farm Products Marketing Commission nor the Canadian Egg Marketing Agency would give me an answer when I asked whether there are regulations against applying for supplementary import permits, then turning around and declaring surpluses.
Today I finally got an answer via an Access to Information request to the Farm Products Council of Canada, which supervises the Canadian Egg Marketing Agency.
The answer: "A thorough search of records was conducted by officials of the Farm Products Council of Canada who confirmed that there are no regulations or directives restricting applicants for supplementary egg import permits from declaring eggs surplus for the purposes of having them diverted from the "table" to the "processing" market."
So how come the high-paid staff at the national egg agency and the Ontario egg board haven't made this known to egg producers and led them in a vigorous lobby to stop this boondoggle?
