U.S., European begin preparations for trade talks

The United States and the European Union issued a news release to announce they have begun preparations to enter into trade negotiations.

The announcement comes as two years of negotiations between Canada and the European Union are stalled on three issues, one of them being Canada’s reluctance to yield its protection for supply management for the dairy and poultry sector and European reluctance to yield as much access to its beef and pork markets as Canadians desire.

Pharmaceutical patent protections and opening government purchases and tendering to European competition are the other issues.

That impasse was on the agenda for talks this week in Ottawa that involved Prime Minister Stephen Harper, but at the end of the day there was no deal for them to announce.

The news release on the U.S. talks came from President Barack Obama, European Council President Herman Van Rompuy and European Commission President José Manuel Barroso.

Both the Americans and Europeans expect their economies to benefit from reduced trade barriers.

That is also what Canadians have been saying, but it hasn’t weakened the resolve of Canada’s dairy and poultry farmers nor Europe’s cattle and hog farmers.

John Ibbotson of the Globe and Mail says Harper had better get a deal by April, else the Europeans will shift all of their attention to negotiations with the U.S. and Canada will be left out in the cold.

That, says Ibbotson, is what happened to Canada’s negotiations with South Korea.

Frankly, I see little reason why Canada needs tariff protection for the poultry industry. We have similar resources such as feed, genetics, and support services as the U.S.; all we lack is competitive chicken processors and it’s their own fault, especially Maple Leaf Foods, that they haven’t built a fully-competitive double-shifted high-volume processing plant.

Dairy is a different matter. There we need our trading partners to scale back their subsidies and trade barriers so we can match with increased market access and reduced tariffs.

But if our weak-kneed politicians continue to coddle the marketing boards, Canada might as well throw in the towel right now on trade talks with Europe and the Trans-Pacific Partnership.

Quebec wants chicken concessions

The chairman of the Quebec chicken marketing board says in a newsletter to members that he’s holding out for an increase as part of a new deal to carve national production into provincial shares.

The provincial boards have agreed in principle to allow “differential growth” and have used population increases as a yardstick.

That will give Ontario and Alberta most of the increases, but Quebec would lose some market share.

Now Quebec is saying it wants a larger share based on the situation in Eastern Ontario where decades ago a number of chicken farms were established without quota to market birds to processors in Quebec.

When the Ontario chicken board discovered those barns, it tried to shut them down. There was a political crisis and the temporary solution was the creation of national quota administered by the national agency for those Eastern Ontario producers.

Later the Ontario board incorporated their production into the Ontario quota system, but in practice the birds continued to be marketed to processors in Quebec.

When Ontario and Quebec reached a new deal to stop inter-provincial trade in live birds, these Eastern Ontario farmers were part of the solution. About 700,000 units of quota moved from Ontario to Quebec.

Now the Quebec marketing board chairman says that’s not enough. He wants closer to 2.5 million units to be shifted from Ontario to Quebec, a total that is closer to actual production from the farms in Eastern Ontario.

This new demand is linked to the new allocation to provinces made by the national agency, not to the no-trade pact between Ontario and Quebec.

And the Quebec chairman is linking this demand to another argument – that the population of the Ottawa Valley and Eastern Ontario ought to be considered part of Quebec’s allocation from the national agency, not Ontario’s.

On that basis, Ontario would not gain any increase in market share and Quebec would not lose, but gain, market share.

This is sure to be one of the hottest issues when the provincial marketing boards meet in Ottawa this week.

The first meetings will be of the marketing boards only. Later there will be meetings that involve industry partners, such as processors and further processors.

None of this information about Alberta, Ontario and Quebec has been included in newsletters from the Ontario chicken board, or posted on its website.

In a related move, the association that represents small-scale chicken processors in Quebec has written an open letter to the association that represents the large-volume chicken processors complaining that the Ontario-Quebec ban on trade in live birds, combined with aggressive purchasing of Quebec birds by Nadeau Poultry Ltd. of New Brunswick, is leaving them short of enough birds to meet their needs.

They say they understand that Olymel and Maple Lodge Farms are in a battle for birds to supply their processing plants in New Brunswick, but say they are suffering as innocent victims.

They are pressuring the Quebec processors and marketing board to either get more birds from Ontario or find them in Quebec to meet their needs.

While the small-scale processors in Quebec have a recognized association to negotiate, the Ontario Farm Products Marketing Commission has refused to give a similar organization for small-volume processors in Ontario status and membership on the Chicken Industry Advisory Committee it chairs.

Some chicken questions

I have some questions for the leaders in charge of supply management for chickens.
But first, some background is required to understand the questions.
Nadeau Poultry Ltd., owned by Maple Lodge Farms Ltd. of Norval, Ont., has been complaining for years about competition from Westco and Olymel.
Maple Lodge's complaint is that Westco was taking away chicken it needs to keep running its Nadeau Poultry processing plant in New Brunswick and that the chicken were being processed by Olymel in Quebec, but now will be processed in a new plant in New Brunswick built in partnership by Westco and Olymel.
Having lost the political battles in New Brunswick, Maple Lodge (Nadeau) began buying chickens from Quebec farmers to supply its plant.
However, in Ontario, Maple Lodge was one of the leading members of the Association of Ontario Chicken Processors that complained loud and long about Quebec processors buying chicken from Ontario farmers, making it difficult for Maple Lodge to get enough.
This eventually led to a deal between Ontario and Quebec marketing boards and processors to stop the flow of live chickens across the Ontario-Quebec border.
It lowered the processors' costs because they no longer need to bid premiums to get chicken from farmers captive to processors in their home province, and presumably their trucking costs declined.
It wiped out millions of cumulative dollars farmers have pocketed in premiums while this inter-provincial competition was hot and heavy.
Ah, but you will have noticed that Maple Lodge, via Nadeau, is now buying chickens from Quebec farmers to keep its plant in New Brunswick supplied.
So, some questions:
1. Is the Quebec marketing board pressuring Ontario to make up for the chickens Nadeau is taking out its back door to New Brunswick?
2. Is there, as rumoured, a deal in the works between the Ontario and Quebec marketing boards that would move some Ontario quota, or production, to Quebec?
3. If so, why is the Ontario board continuing to refuse to supply chicken to CAMI International Poultry Inc. of Welland? It would be the height of hypocrisy to find quota to keep Maple Lodge (Nadeau) supplied while starving one of its competitors, CAMI International, out of business.
4.What plans do the chicken marketing board leaders have in mind to ensure that CAMI's customers for New York dressed chicken are supplied? 
5. What, if anything, are the Farm Products Council of Canada and the Ontario Farm Products Marketing Commission doing to ensure that the chicken farmers fulfill their obligation to keep the market supplied?
6. What, if anything, are those same supervisory bodies doing to honour commitments the prime minister and provincial premiers have made to eliminate inter-provincial trade barriers?
These are questions a reporter can ask.
But they are questions that chicken farmers ought also to be asking of their leaders. It's their business that is at risk.

Raw milk significant food poisoning source

The United States Centers for Disease Control says consumption of raw (unpasteurized) milk and dairy products has become the second leading cause of bacterial and viral infections.

It says the incidence of milk-related food poisonings has increased in step with the growing popularity of raw milk.

A report published in a scientific journal, Emerging Infectious Diseases, says that in the decade from 1998 to 2008, 14 per cent of foodborne illnesses and 10 per cent of deaths in the U.S. were linked to consumption of raw milk and raw milk products., including home-made cheeses.

Raw milk has been a hot-button issue in Ontario where Michael Schmidt has been in the centre of controversy as he defies public health and milk marketing board authorities who try to shut him down.

On the one hand, we're investing small fortunes in new food-sarety initiatives, including on-farm food safety programs, and on the other hand we allow raw milk zealots to defy food safety science.

Canadians facing tough competition

Canadian food manufacturing are losing ground to U.S. competitors, according an analysis and commentary by Kevin Grier of the George Morris Centre.

The Canadian dollar has risen, making imports cheaper and exports more expensive.

Canadian wages used to be a dollar less per hour than in the U.S.; now they are $3 an hour more.

Productivity is slipping. Canadian plants market $383,000 per employee; in the U.S. it’s $500,000.

Canadian companies are in a profit squeeze, unable to pass on all of the increased costs for raw materials. That leaves them less money to invest.

Grier sees two basic options – the Maple Leaf Foods Inc, route to build large new plants that can match the U.S. competitors. Maple Leaf has built a huge bakery and has a huge meat-processing plant under construction, both in Hamilton; it is closing older, smaller plants.

The other option “is one of delivering added value or innovation to buyers,” says Grier.

“Ultimately it is individual companies that compete within the opportunities or constraints

presented by provincial or federal fiscal and regulatory parameters,” says Grier after noting that industry-wide data show our trade deficit for value-added foods went from $1 billion in 2004 to $6.3 billion in 2011.

“Canada’s fiscal and regulatory parameters have also come under greater scrutiny in light of the

par dollar.,” he writes.

“In the last five years, federal and provincial governments tried to show their

commitments to food industry competitiveness through grants and loans. Alberta’s ALMA

program and the federal government’s AgriProcessing Initiative are two examples.

“Given the results so far, it suggests that federal and provincial governments need to put their efforts

elsewhere.

“Questions regarding the impact of fiscal and regulatory impacts on competitiveness

need to be answered, or better yet, at least asked,” says Grier.

Piercing secrecy at Ontario chicken board

The Chicken Farmers of Ontario marketing board won’t let reporters attend its district meetings or its annual meeting.

And it posts the bare minimum of useful information on its website.

And so it was from an article in Country Life in B.C. newspaper that I learned the dirt on the Ontario board.

I learned that other provincial boards are angry about a deal the Ontario marketing board has cut with processors.

It essentially has the chicken board cutting prices whenever processors margins are squeezed.

Not only has the Ontario board agreed to cut prices, but also to reduce production volumes so the processors are under less pressure to move chicken.

The four Western provinces are ticked off because they have been pricing chicken to reflect the prices in Ontario.

This is indeed strange behavior in Ontario because the chicken board has previously guarded its right to price chicken according to the cost of production and, if the processors have trouble selling it all, they have historically reduced production until processor margins recover.

It’s doubly strange when you consider that Ontario refuses to supply one of its most successful processing plants, CAMI International Poultry Inc. of Welland.

Not only is the Ontario board refusing to supply CAMI, but also it’s in league with the Chicken Farmers of Canada, the national agency, to try to keep CAMI from filling its needs with supplementary import permits for U.S. chickens.

This looks to me like a straight-out breach of the marketing boards’ obligation to keep the Canadian market supplied.

Alberta is a province that also feels its market is short of chicken, so it has served notice it wants out of the national agency unless or until the agency increases its allocation.

Alberta cites two reasons: its population has increased more than its allocation and its small-scale processors serving niche markets can’t get enough chicken.

The same situation exists in Ontario. While Alberta lays claim to a three per cent increase on the basis of population, Ontario could claim five per cent on the basis of population.

Quebec would lose four per cent on the population basis.

Ontario has more small-scale processors begging for more chicken than Alberta, but the big guys have conspired with the chicken board to freeze them out. Heck, the little guys can’t even get a seat at the table of the Chicken Industry Advisory Committee.

And then there’s the fact that Ontario and Quebec are in cahoots to undermine free inter-provincial trade in live chicken, quite obviously in direct defiance of an agreement negotiated and signed by all the premiers, promising to promote free trade and dismantle trade barriers.

Alberta dares to speak up at the national agency.

Ontario is a bunch of pipsqueeks.

They are likely convinced that Quebec’s chicken farmers, who can see how well their dairy-farming cousins have fared by bullying others, are as likely to yield market share as hens are to grow teeth.

I see that the trade negotiations between Europe and Canada are snagged on market access – Europe refusing to grant increased access to Canadian beef and pork unless and until Canada grants increased access for dairy and poultry products.

Given the track record, I wouldn’t blame the Canadian negotiators and politicians if they yielded completely open access for chicken in return for increased access for Canadian beef and pork.

And eggs. But that’s another scandalous story. And Chobani yogourt, which is yet another story.

Small, loca, oganic and dangerous

Calling all those who trumpet small business, local and organic as safer food.
Take note of Rosewood Products of Ann Arbor, Michigan.
Owner Phi G. Ye has consented to a permanent injunction after federal food-safety inspectors told the judge about the flithy conditions in his plant where he processed tofu, soy milk and similar products.
He won't be able to resume production until he hires a consultant to prepare food-safety protocols, he properly trains staff and cleans up the place.
“Consumers expect their foods to be safe,” said Melinda K. Plaisier, acting associate commissioner for regulatory affairs. “When foods are not manufactured under sanitary conditions, those who prepare, process and distribute those foods should expect FDA enforcement action.”
Judge by their compliance, not by their business size or location. 
I have a suggestion: compare by the percentage of faulty products and sickened customers.
By those measures, Rosewood Products is probably worse than XL Foods and Maple Leaf Foods and organic products more risky than mainstream products grown and processed by conventional practices.