Small-scale chicken processors who want to develop niche and
specialty markets in Ontario are out of luck following a tribunal decision
Monday.
The Ontario Independent Poultry Processors filed an appeal,
seeking to force the Chicken Farmers of Ontario marketing board to implement
the specialty-markets policy it adopted, but failed to implement, earlier this
year.
The Association of Ontario Chicken Processors (AOCP),
representing the larger processors who account for more than 95 per cent of the
market, did not like that policy, mainly because they feared they would have to
yield some of their farm supply of chicken so those pioneering specialty and
niche markets would get the birds they need.
The AOCP filed two appeals with the tribunal, and each time
the chicken board decided to try to negotiate a settlement. That delayed
implementation and frustrated the small-scale processors, including ones who,
under pressure from the board, filed their proposals and business plans and
then sought customers.
John Slot, speaking for the small guys, said those
processors suffered “irreparable damage” to their reputations. Lawyer Herman
Terpstra, representing the AOCP, said basically “too bad! You made a poor
business decision.”
None of that counted with the three panel members from the
Ontario Ministry of Agriculture, Food and Rural Affairs Tribunal – Harold
McNeeley, Glenn Walker and Richard Smelskie.
What counted with them was the process that evolved since
the tribunal began hearing the case in July. It adjourned the case then after
Terpstra and lawyer Geoffrey Spurr for the chicken marketing board said the
policy under appeal was in the throes of being either substantially rewritten
or withdrawn.
On Thursday the chicken board did withdraw its policy and it
adopted a “special breeds” policy closely aligned with the national agency,
Chicken Farmers of Canada.
The last-minute decision came too late to cancel a
resumption of the appeal; the panel ruled, however, that it can’t sit in
judgement of a policy that has been withdrawn.
Slot and OIPP member Joe Abate of Arthur said they will not
pursue any further appeals because they require so much time and effort and
even if they win, it would take more than a year and in that time there could
be major changes to supply management flowing from international trade
negotiations, such as the Trans-Pacific Partnership, and sharp reductions in
Canadian tariffs that enable the marketing boards that would force the
marketing boards to reduce prices and/or increase production to stave off
competition from imports.
The tribunal dismissed the appeal and said written decisions
will come later.
Terpstra and Spurr argued that Slot and the OIPP need to
forget about the policy that has been withdrawn, but could ask the chicken
board to reconsider its new special-breeds policy.
Slot told the tribunal that the special-breeds policy could
be rolled into the previous specialty-markets policy which addresses a much
broader range of market potentials.
There is already a lot of controversy over the special
breeds policy.
Sean McGivern of Progressive Farmers of Ontario, which has
been lobbying for an increase from 300 to 2,000 birds per year farmers can
raise without needing chicken board quota, said the deadline to file
applications to produce under this policy is only three days.
That is unrealistically short for most farmers, he said.
Slot noted that it’s even more challenging for processors
who might want to enter the program.
In practice, all of the production and processing is going
to a handful of people and businesses, some of them apparently in flagrant
violation of the board’s regulations.
For example, it’s clear that some of the producers for this
market have been raising far more than 300 birds a year without quota.
It’s also not clear whether Frey’s Hatchery, which is the
exclusive supplier of most of the specialty-breeds birds, shared its sales data
with the Ontario Broiler Hatching Egg and Chick Commission and, if so, whether the commission shared that information with the chicken board. There’s supposed
to be an information-sharing system to guard against violations of chicken
board and commission regulations.
It’s further not clear how processors reported, or failed to
report as required by the chicken board, the processing volumes of the
specialty-breed birds.
The chicken board has declared that production rights under
this new policy cannot be traded or sold.
It’s not clear how it can make that
policy stick; it has been tried by other supply-management marketing boards and
they have all subsequently withdrawn the restrictions.
The two breeds covered by the policy have red feathers,
which makes them appealing to people of Asian ethnicity, and they will be
processed with head and feet left on, also to appeal to the same Asian
clientele.
CAMI International Poultry Inc. of Welland pioneered that
market, but fell on hard times when the Quebec and Ontario marketing boards
banned inter-provincial sales of live chicken, thereby cutting off most of CAMI’s
supplies.
Owner Jimmy Lee filed two court actions, one to over-turn
the inter-provincial trading ban, the other seeking the right to import live
chicken from the United States, but sold his share of the business to a
partner.
The partner made peace with the Association of Ontario
Chicken Processors who apparently ensured CAMI would get more chicken out of
their shares in the Ontario market, and the court challenges were withdrawn.
