by SUSAN MANN
Ontario’s chicken allocation for the quota period starting in February 2015 is four per cent higher than this February because of Chicken Farmers of Canada’s new allocation system.
Chicken Farmers of Canada directors set the allocation this week for the A-129 quota period (Feb. 22, 2015 to April 18, 2015) using the new system approved in principle by the board in July. Mike Dungate, Chicken Farmers of Canada, says Ontario’s allocation will be 53.5 million kilograms of eviscerated chicken for the A-129 quota period, while for the same months this year it was 51.4 million kilograms of eviscerated chicken.
Dave Janzen, Chicken Farmers chair, says “projections would indicate Ontario will definitely be getting additional kilograms of chicken” under the new agreement.
Dungate says the average allocation increase across Canada was 3.5 per cent using the new system. Chicken Farmers directors set the allocation for each eight-week quota period several weeks in advance of the period.
Janzen says “in July the board of directors agreed to this (new agreement) in principle and it has just taken this long to work out all of the implementation details.” Allocations for the A-127 (Nov. 2 to Dec. 27) and A-128 (Dec. 28 to Feb. 21, 2015) quota periods were also set using the new system.
Dungate and Janzen outlined the new agreement that includes 55 per cent of future growth being allocated based on “provincial comparative advantage factors.” The other 45 per cent of growth “is allocated on an historical, provincial share basis,” Janzen says.
The new comparative advantage factors include seven components and they’re worth different percentages ranging from five to 10 per cent. “Fifty-five per cent of all future growth will be distributed according to how a province scores against these seven comparative advantage factors,” he says. They are:
- Population growth year over year that a province experiences.
- Gross domestic product but just the return on labour numbers. When Statistics Canada releases GDP numbers, they’re split into return on capital and return on labour and this factor just considers the return on labour part.
- Consumer Price Index. This is a cost factor and it works against a province getting more of the growth allocation.
- Farm input price index that tracks provincial feed prices on a quarterly basis. Declining feed prices in a quarter that’s being measured will give a province an advantage in getting more of the growth allocation.
- Quota utilization. An internal provincial measure that tracks how well a province meets its quota allocation. It’s a measure of how well a province is managing its production.
- Further processing component. This factor takes into account the volume of chicken a province has going to make further processed products. Provinces, such as Ontario, that have a huge further processing industry need more allocation for this market.
- The relationship of production to population. This factor takes into account a province’s share of national production compared to national population.
Prior to the new system’s use, the Chicken Farmers’ production allocation for provinces was predominately set “on an historical market share basis for several years,” Janzen says.
The new agreement took six years to complete with the most intense negotiations occurring from 2012 to this year, according to a Chicken Farmers Nov. 20 news release. Challenges, starts and stops and roadblocks were “ever present, but at the end of the day have been overcome through this new agreement,” the release says.
Janzen says “the biggest roadblock was how the allocation had been set previous to this (the new agreement). There were several provinces that were absolutely not willing to move away from just allocating based on their historic share.” He declined to name the provinces.
Dungate says the new agreement “is a balance of issues,” while Janzen says “there is something in all of these factors that every province can tap into over time.”
Alberta, which had withdrawn from the national agency last year over allocation, was the first to sign the new agreement and is in the process at its provincial level of formally rejoining, the release says. BF
Comments
Not one mention of any thing for new entrants or young farmers who would like to get in on the ground floor . Is it any wonder that SM is not well liked by some and not just because of price !
Where are our farm groups ? Oh yes TOO busy rubbing elbows at Queens Park and patting them selves on the back ,searching for ways to raise costs and getting new regulation info that Gov wants pushed through . Oh I almost forgot they have a tailgate party once a year and feed young potential farmers beer but do nothing else for them other than talk and talk and talk . Death by talking is a slow and painful way to go .
I really hope that the Young farmers at the Young Farmers Forum this weekend ask some tough questions !
If your looking to get in on ground floor, then get a job on a farm.
No one is just going to hand you a farm!
Did I ask some one to hand me a farm ?
The problem is that those who have quota keep getting more free quota when it should be going to a young starting farmer .
I already own 4 farms and don't feel the need to be competition to young farmers unlike many others . I am closer to the side of exiting agriculture than I am to starting .
There are new entrant programs in both Chicken and Dairy.
The whole idea of giving more chicken quota is the demand is present,filling that demand by a select few younger (smaller) chicken farmers would not be feasible.
Is it not up to the person getting in to determin what is or is not feasible ?
So nice to see that others are making the decision for new/young farmers .
There have been many times that people have said "it won't work" and hard work and determination make it work and proved otherwise .
Let me put it this way,putting the demand for over 2 million Kg's more chicken than last year,in a 2 month period (feb-Apr.) makes a lot more dependable sense in the hands of over 1,000 established chicken producers than risk and try filling it by small start up chicken farms.
Like l said, CFO has a new Entrant program but that much more chicken in that short time period is not feasible for those new farmers.
To imply that allocating quota to younger farmers isn't feasible, but that new entrant programs are, ignores the numbers as well as the nauseating obscenity of seeing new barns being built on the farms of those people who already have oodles of quota, but who get enough free quota to build another barn.
In addition, people aspiring to the new entrant programs for both dairy and poultry ignore the after-tax cash flow reality that when the quota loans have to be repaid:
(1) even if quota is available at any price at that time
(2) unless things change in dairy quota transfer policies
(3) unless there is significant off-farm income
(4) unless these new farmers are bequeathed a lot of money and/or quota
the new entrant programs are little more than giving people a free voyage on the Titanic.
Stephen Thompson, Clinton ON
I guess I would question how some one would get a permit to build a new barn inthe Green Belt ? You know that area around the GTA that is supposed to be preserved for agriculture .
One has to wonder if Gov thinking is that by limiting agriculture in a preserved agriculture area that that they are going to improve water quality problems that is caused by improper sewage treatment plants that by-pass and never dump human waste into the lakes rivers and streams .
Here we go again give the allocation to the rich ,and let the non sm farmers fen for themselves ,don't let new farmers in sounds one sided to me it is bull Canada wake up
Did you just crawl out of a cocoon ? We have had Supply Management in this Country for Poultry since 1979.
Like any business,if you want in then be prepared to pay for it.
It may be Christmas coming up but entry into Supply Management doesn't come gift wrapped.
yes that's right 1979 holy ,but you get quota given to you and if you cant fit it in your barn ,do they take it back or do u sell it hmmmm
Please, tell me, how is supply management "like any business"?
Raube Beuerman
I'm sorry, is owning and operating a Poultry or Dairy farm not a business ? When l see someone crying about not being able to attain Chicken quota because they are not in "the business"..well its only been like this going on 35 years !!
However,there are Poultry and Dairy farms for sale in Ontario,however they are not being given away.
Kind of like McDonalds or Tim Horton franchises,they appearently are not being given away either.
When about 15,000 quota-owning millionaires, including some who acquired their quota for nothing, can hide behind 200% tariff barriers in order to financially bully not just some 35 million consumers, but other farmers who don't enjoy similar legislated entitlements, while this may be a business, it is a business composed of, and run by greedy rip-off artists who don't deserve any respect for being responsible members of our society and/or economy.
And I wish supply managed farmers would get over trying to compare supply managed farming to McDonalds or Tim Hortons - the only similarities exist in the minds of supply managed farmers. For example, there's nothing to prevent a Burger King from building a franchise right next door to a McDonalds or a Starbucks from locating right next door to a Tim Hortons. In addition, McDonald's doesn't enjoy a 200% legislated price advantage over Burger King the way supply managed farmers enjoy a similar advantage over non-supply managed farmers.
Stephen Thompson, Clinton ON
No one is comparing Tim Hortons and McDonalds to Supply Management,after all they are both American owned,they have the swinging door.
However Supply management has been accused of having a closed system.I have merely pointed out owning a Tim Hortons or McDonalds seems to be more difficult,so who has more the closed system ?
Free Quota?
Does that mean that the bigger you are the more you get?
Does that mean some big guys will get more Quota than what some small farmer has Total?
Does that mean that the big guy can buy the small out in a stroke of a pen?
Does that mean there is a bigger you are the more you get policy?
Does that mean that Quota is good for some but GEAT for others?
Does that mean?
The allocation isn't higher because of the new allocation system.
It's higher because CFC set a Canadian allocation at 3.5% growth for A-129. That's what CFC believed was right for the market.
All the new allocation system does is divvy up the growth amongst provinces using a comparative advantage calculation.
You've conflated the two factors.
here is one to think about dairy chichen farmer sales his quota that he got for free he then sales it for the going price which is usly bought buy a feed co. he then jumps into beef or cash crop an does not pay one red cent how is that fair to the beef or cash crop farmer who has no government helping him with world markets or no 200% traffs let the chichen an dairy in from the usa an see how long the dairy an chichen farmer lasts
a few years ago ,I was stopped for having 2 pigs too many on my trailer going to a butcher, it was two crowded for the space they where in. The chicken farms have there new one story barns. With them filled to capacity there's very little room to get water, food sent right to them , no room for them to move around ,just hurry grow, yes I think they need more quota. so I say is this make sense
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