Lowbank Farms Ltd. of Hagersville has filed an appeal with the Ontario Agriculture, Food and Rural Affairs Tribunal, trying to knock some common sense into the thick heads at the Chicken Farmers of Ontario marketing board.
Harry Fennema, owner of Lowbank, said he filed the appeal because he and his brother, who produces organic chicken, cannot dove-tail their operations because of chicken board policies.
Harry has only one customer – his brother, John – and the two have planned a processing plant and production volume to run at peak efficiency at 65,000 kilograms per quota period.
John sells his birds to Harry and after processing Harry sells the chicken back to John who does all of the marketing. It’s a paperwork transaction to satisfy marketing board requirements.
It would be much simpler and straight-forward if the production and processing could be run as one business, but the marketing board policies won't allow that to happen.
Harry’s appeal arises out of marketing board policies governing over-production and under-production at the farm level and, secondarily, how the board allocates scarce chicken supplies among processors.
When John under-produces in a quota period, he can make up that under-production a year later.
However, if that results in more birds than have been allocated to Harry for processing, the marketing board allocates John’s extra birds to another processor.
In practice, it is usually Maple Leaf Foods Ltd. that has been short of chicken to fill its allocation, so the board directs them to Maple Leaf.
However, the volume is usually so small that Maple Leaf doesn’t want them because it needs to rent a smaller truck and runs into other slaughter-scheduling challenges. It's a costly nuisance for the province's largest processor.
The marketing board has, however, refused to listen to Maple Leaf and the Fennemas to send the extra birds to Harry’s processing plant, called Lowbank Farms Ltd.
If and when John over-produces and then has to cut production a year later, there is no way for Harry to source organic-standard birds from anybody else and so Fennema's customers are short of supplies.
There is an additional issue for the Fennemas; they are producing high-cost organic-standard chicken for premium-priced markets and so they don’t want to ship to Maple Leaf at commodity-market prices, nor does Maple Leaf have a market for the organic-standard chicken.
On a broader scale, Fennema says the family concerns are only one of many examples of how the special needs of small-scale processors are being ignored by the chicken marketing board and its new relationship being developed with the Association of Ontario Chicken Processors.
Fennema is a member of the Ontario Independent Poultry Processors association which is trying to get membership in a new advisory committee that so far has membership only from the marketing board, the AOCP and the Ontario Farm Products Marketing Commission.
Fennema said that if the OIPP members’ concerns are not addressed, they will be filing one appeal after another, costing taxpayers to pay for hearings by the Ontario Agriculture, Food and Rural Affairs Appeal Tribunal and costing the chicken board to pay a lawyer to represent it at the hearings.
The board is foolishly sticking to principles and ignoring common sense and the marketplace. But this is nothing as compared with the follies of national chicken supply management where the directors insist on each province getting a fixed-percentage cut of the pie, regardless of the demand and supply situation in their province.
This has, at times, resulted in chicken grown with subsidized feed in Newfoundland, processed at a subsidized slaughter facility in Newfoundland ending up at a further-processing plant in Waterloo, Ont.
It has also, at times, meant that an Ontario processing plant that lands a contract to supply the chicken for new nation-wide product launches by McDonald's Restaurants can't get enough chicken because the additional birds for the increased demand are produced in other provinces.
And, currently, it means that Ontario chickens move to Quebec processors who offer premium prices while Quebec chickens are moving into Ontario, also at premium prices, so processors can fill their orders. About 10 per cent of the chicken produced in the two provinces moves inter-provincially and at premium prices that cannot be justified by supply management which is designed to only cover production costs plus a reasonable return for producers.
Supply management is also supposed to ensure that the Canadian market is supplied with wholesome chicken.
So we have a broken system at the national agency level that is compounded by the Ontario board by straight-jacket allegiance to principles that defy common sense.
As for me and my house, whenever we're in the U.S., we stock up on chicken specials.
