The two directors of Farm Products Council of Canada who
conducted an inquiry into the application to impose supply management on the
pullet industry have turned in their report.
It contains no recommendations. It's now up to the council to decide what it will recommend to Agriculture Minister Gerry Ritz.
Brent Montgomery and John Griffin were appointed to conduct
the inquiry, including public hearings, after the Pullet Growers of Canada
filed an application to set up national supply management in July, 2012.
Montgomery and Griffin report that they received 84
submissions and 23 applications to make appearances at public hearings that
were held last spring in Ottawa and Winnipeg.
They report that Pullet Growers of Canada claims 554 members
from Ontario, Quebec, New Brunswick, Nova Scotia and Manitoba.
Alberta, Saskatchewan and Prince Edward Island provided
evidence that they support the application. British Columbia took no stand,
noting that its pullet producers are satisfied with the prices they are paid
and that t the public has reached the limit on what it’s willing to pay for
eggs.
A national agency for pullet growers would increase pullet
prices to the cost of production, as determined by a formula based on producer
surveys. Any increase would automatically increase the price of eggs because
egg producers have national supply management with prices reflecting the cost
of production.
The data in the report indicates there are only 32
independent pullet growers in Ontario and 36 in Quebec – i.e. pullet growers
who own no egg quota.
Those with egg quota account for 68 per cent of pullet
production in Ontario and 56 per cent in Quebec.
The Quebec pullet industry is controlled by feed mills that
contract for pullet production and handle the placement of those pullets into
egg farms. The feed mills take a commission.
The proposal for a national agency calls for a levy of five
cents per pullet and estimates it would apply to 15 million pullets per year
and therefore raise $750,000 per year.
The business plan estimates annual expenses of $500,000,
leaving $250,000 to build reserves.
The Pullet Growers of Canada told Montgomery and Griffin
that they have consulted the federal agriculture and trade departments about
gaining import controls, but they have no plans to present at this time.
There are not many imports of pullets, but there are
considerably imports of chicks and hatching eggs. In British Columbia, for
example, about half of the chicks and hatching eggs come from the U.S.
The proposal says that if Pullet Growers of Canada
is approved as a national supply management agency, it will operate on the
principle of no value for quota, based on the Quebec example.
It’s not clear how either Quebec or a national agency could
operate a no-value-for-quota policy since it’s obvious that prices that cover
the full cost of production, plus providing a “reasonable” return for growers,
would have considerable value.
That’s a conclusion that every supply-management marketing
board in Canada has reached, prompting them to give up any notion of a
no-value-for-quota policy.
