by SUSAN MANN
The owner of Ontario’s only chicken processor east of Toronto learned last week his company’s bird supply allocation had finally been approved for expansion.
The approval ends Laplante Poultry Farms Ltd.’s three-year struggle with Chicken Farmers of Ontario and the Association of Ontario Chicken Processors (AOCP) to obtain additional birds to process.
Under the Canadian chicken supply managed system, processors must seek the approval of producer organizations to obtain supply. In this case, Chicken Farmers made the decision to boost supply in cooperation with AOCP.
The boost to 500,000 kilograms of chicken per quota period will more than triple the 150,000 kilograms Laplante currently processes. (There are 6.5 quota periods in a year.) The change takes effect January.
Laplante Poultry Farms owner Robert Laplante first asked Chicken Farmers for more supply in 2012 but was turned down by the board. The Ontario chicken processors association also opposed the request.
Laplante appealed the decision to the Agriculture, Food and Rural Affairs Appeal Tribunal in early 2013. The tribunal ruled in part on March 7, 2014 that since Laplante Poultry and the Ontario chicken processors association reached a settlement, any dispute on the interpretation of that agreement would be resolved by arbitration.
Laplante says the permission to boost processing volume was obtained through the settlement with AOCP; the settlement was in turn approved by Chicken Farmers. “At the end of the day, for the betterment of the industry and the betterment of both parties, AOCP and Laplante Poultry Farms decided to resolve their differences and to conclude all litigation.”
Michael Edmonds, Chicken Farmers of Ontario communications and government relations director, says the additional supply came “from other processors. That’s where the AOCP cooperation came in. It’s a transfer from their members.”
Edmonds says the AOCP members “worked with the board to make this possible. Ultimately, the goal is to try and meet markets in Ontario. There is a demand for regional processing.”
Asked why the board made this decision now, Edmonds says the board is constantly reviewing opportunities to meet markets and “this opportunity came up. The industry made a decision there was a market that could be met by having a larger, local plant.”
Asked whether Laplante Poultry Farms had to pay for the supply it got from other processors, Edmonds responded, “I won’t speak to any commercial arrangements.”
Mike Terpstra, AOCP executive director, declined by email to answer specific questions about the decision, saying the Chicken Farmers Sept. 16 press release should be referenced for answers.
“Details with respect to the Laplante Poultry Farms announcement are subject to normal commercial confidentiality,” he says.
Laplante says he “can’t get into” whether he had to pay for the additional kilograms he’s getting. “There’s confidential information with our agreement.”
The boost in supply will enable Laplante to buy chicken from Francophone farmers in Ontario who want to sell their production to French-speaking processors and currently sell to processors in Quebec.
In 2013, a group of Ontario French-speaking farmers challenged rules in Ontario that would have forced them to work with non-French speaking processors in western Ontario. The farmers won their court case and Chicken Farmers changed its rules to allow the farmers to deal with Quebec processors.
Now, most of the 2.5 million kilograms of chicken produced in eastern Ontario is processed in Quebec.
Laplante, who says he’s perfectly bilingual, notes the supply boost for his operation will give those Ontario Francophone farmers an option “to come back to Ontario and still be able to speak French.”
Laplante says the additional supply will also enable him to convert to full-time his mostly part-time workforce.
He has about 20 part-time employees and three full-time people.
Laplante says he uses mainly part-time workers because he doesn’t have “enough production to keep full-time staff going.” He kills chickens once or twice a week currently at his Monkland facility. When the supply is bumped up, “we’ll be processing a minimum of four days a week, sometimes five days depending on the need.” BF
Comments
In the real-world of business, every time some issue is resolved, the result is always presented as being better for the customer - not so in the fairy-tale world of supply management where, as the above story clearly demonstrates, the customer is never mentioned and never even considered.
That's not opinion, it's fact that nobody can dispute.
Stephen Thompson, Clinton ON
If the supply of chicken was not shackled by SM, instead of having 3 full time, and 20 part time employees, it would have 30 plus full time employees.
One thing for sure is that the SM farmers supplying chicken are getting paid double time for part time work.
Once again the myth of 'job creation' is busted.
Is this the 'chickle down effect'?
Raube Beuerman
"Milkle-down" is a term based on the Ronald Reagan-era term "trickle-down" which was supposed to be a measure of the benefit so-called "Reaganomics" had on the US economy.
However, supply management, of course, bastardized what Reaganomics was all about and got it completely-backwards because Reganomics had everything to do with lowering taxes and increasing trade - supply management is all about increasing consumption taxes on the poor and restricting trade.
Therefore, in supply management, the only thing that "triclkes-down" (and/or "milkles-down") is the cost to consumers - all of the money and all of the benefit "trickles-up" to quota owners and stays there.
My opinion may not be shared by any organization with which I am affiliated, but I don't care because my opinion is shared by every economist.
Stephen Thompson, Clinton ON
Maybe not. You argued yourself (rather peevishly) that they support local builders for their modern homes. They also invest in their operations, supporting local architects, builders, and suppliers. Some hire consultants, veterinarians, accountants, custom-cropping companies. They purchase feed, fertilizer, vehicles and farm equipment. They support their local churches, 4H, Home Hardware, local stores and more. And yes, they pay taxes too.
One of the biggest (and seemingly never-ending) up-hill battles faced by economists is dispelling the myths about the jobs and economic activity created by protectionist measures.
While, indeed, money gouged from consumers through protectionism does get spent by the recipients, even more jobs and economic activity gets created when protectionist measures end.
Therefore, when supply management ends, consumers and non-supply managed farmers can get out from under the boot-heel of protectionism and can, therefore, give more money to "local churches, 4-H, Home Hardware, local stores and more".
To look at it another way, arguing that protectionism creates wealth and jobs is exactly like the pre-civil war argument in the US that slavery needs to be kept because otherwise everybody in Mississippi would be poor.
This isn't just my opinion, but found in every economics text printed for the last 150 years and written by authors who didn't remain anonymous - therefore, once again - "no name + no understanding of economics = support of protectionism".
Stephen Thompson, Clinton ON
So what you are saying is that every economist should still have a slave ?
I thought we were well beyond that way of thinking .
Economists don't have slaves, but supply management makes economic slaves out of consumers, so the comparison is completely appropriate - that Canadian consumers are economic slaves to supply management isn't just my opinion, it's the undeniable truth.
Therefore, if there are about 15,000 supply managed farmers and 35 million Canadians, each supply managed farmer has, on average, 2,333 consumers as economic slaves.
One of the quirky things about teaching economics at the post-secondary level is that there is always one student in every class, almost always from a dairy farm, who just can't understand even the simplest concept when it comes to demonstrating the folly of protectionism - the above anonymous poster would be that student.
It didn't matter how many times the class got told that protectionism was net-negative for jobs and economic activity, it didn't matter how many comparisons one used and it didn't matter how well one explained the multiplier effect of increased consumer spending when millions of consumers were freed from the legislated greed of about 15,000 supply managed farmers, there was always one dolt who, rather than admit supply management wasn't the economic power-house he wanted to believe it was, would, in a twisted feat of convoluted logic, accuse me, as did the above anonymous poster, of being in favour of slavery or some-such similar nonsense.
Ah, yes, another day, another anonymous supply management "whack-a-mole" dispatched to irrelevancy! I can't wait to see what kind of goofiness comes from tomorrow's anonymous "whack-a-mole" artist.
Once again, my views will be shared by anyone who's ever tried to teach economics to post-secondary students from farms, but may not be shared by organizations composed of those farmers who inculcate protectionist nonsense into their offspring.
Stephen Thompson, Clinton ON
When you write your letters do you write them very fast... or do you write them very slowly... with a disclaimer at the last ... so when you write your letters now I really have to ask... do you write your letter first ...or your disclaimer at at the last?
When people know what they are talking about, because they understand the economic principles behind their message, they can communicate quickly, accurately and succinctly - when people neither know what they are talking about nor have anything to say, as is the case with all anonymous posters, especially the ones who don't understand even the first thing about economics, (and that seems to be pretty-much all anonymous posters) it doesn't matter if they take a week to compose a posting, the result is still the sort of meaningless gibberish/drivel seen immediately above.
Although this may not be the opinion of any organization with which I am affiliated, it is the opinion of people who write for a living.
Stephen Thompson, Clinton ON
As with any thing there needs to be both sides to the argument looked at .
It could well be that cheap subsidized imports could come in and take all of those jobs away . So not as easy as it is being made to appear . Take the price of hydro , wages and the added expense of regulations in this country . Just those alone could make a processor un competitive .
Maybe the processor needs to see if he could process birds from the USA to keep the plant busy and running full time . Would be no different than Ontario hogs getting shipped to the US for slaughter . If US birds were shipped here for processing then it would be easier for them to be sold here since the processing jobs are here and not there .
I would say in this case the processor does not own or take ownership of the birds . The processor is likely getting a set price per bird .
You really think live chickens would move north across the border for processing ?
..not a chance !
Not as long a we have the Liberals choking the life out of the province .
we should be happy that an opportunity has been taken up to increase chicken processing in Ontario
CFO seem to be working with groups to increase Ontario Chicken supply into different markets i.e. offering Small Scale Chicken Producers the new Artisan Program ( birds without quota)
Stan Holmes
Restricting the amount of something that is produced is a quota Stan.
Raube Beuerman
there are many factors that restrict the "amount of something that is produced" such as weather/soil type/land base/labour force/risk tolerance......it seems that you have see opportunities!!
Stan
Stan, none of your examples are valid since they are not a product of government legislation.
Raube Beuerman
On the other side,are not beef and pork exports the result of Government legislation ?
No, beef and pork exports are a result of less government.
Raube Beuerman
How does it feel to be always negative, anti opportunity and anti government?
Look for positives once in awhile
Stan
Stan, "anti opportunity" is an oxymoron in the context of supply management.
I'm positive.
Happy now?
Raube Beuerman
Stan, imagine for a moment, every business in Canada operating under the same controls as supply management. I don't mean half of Canada, I am talking about every aspect of every business.
Now open your eyes and what do you have; Soviet Union.
It doesn't work. The only reason that supply management has survived is because it is surrounded by Capitalism. Yet almost weekly, be it here, or in the Ontario farmer the rest of us have to swallow some diatribe about how wonderful it is.
All the while, these supply management supporters bask in the fruits of Capitalism that surround them, and have allowed their minority to exist.
Raube Beuerman
They better have some sort of supply management or they would soon be out of business.Mr. Gordon Hill has had several letters in the Ontario Farmer that demonstrate why most businesses have to have some sort of SM to survive.
Unfortunately, even though Gordon Hill is a good friend, his solutions for low farm gate prices are, all at the same time, neat, simple and wrong and, as well, became out-of-date with the repeal of the Corn Laws in England in the 1840s and became even more out-of-date when, in the mid 1930s, US President, Franklin Roosevelt, recognized and started to undo the horrible economic damage created by the tariff-based, protectionst agricultural policies implemented by his predecessor, Herbert Hoover.
Don't just take my word for it - look it up on Wikipedia, or better yet, take a course in introductory economics as I suggested Mr. Hill take, but which he declined - the tuition is deductible and what is to be learned is priceless.
Calls by anyone, including Mr. Hill for supply management measures represent exactly the sort of naive and simplistic thinking that lengthens and deepens recessions and depressions because supply management systems for any commodity require tariffs which, as England discovered in the 1830s and the US discovered in the 1930s, are always negative for jobs and economic activity.
The above isn't opinion - it's basic and undeniable economic truth of the sort farmers, especially anonymous ones, as well as those who pander to them, especially Liberal MP, Wayne Easter, seem to find, alas, easy to deny.
Stephen Thompson, Clinton ON
Post new comment