The Impact of Imports
Now a days, everybody wants to buy local – and hey, why not? Supporting your local farmers helps their communities, its economy, and guarantees that you get fresh, quality food from a source you know. Recently, there’s been much talk about opening the market to more imports, displacing the local and reliable foods Canadians trust, and placing the livelihoods of the farm families who grow them at risk.
Not only that, but trade rules are critical to the Canadian chicken industry so we can maintain the three essential pillars of supply management: producer pricing, production discipline, and import controls. In order to have a stable market for all stakeholders of the Canadian chicken supply chain, volumes of imported products have to be predictable in order to grow an adequate volume to satisfy Canada’s market requirements.
Import controls, one of the three pillars of supply management, continues to be challenged from several different directions: Duties Relief Program, Spent Fowl and Specially-Defined Mixtures.
What are these you ask? Let’s take a look!
Duties Relief Program
What is the Duties Relief Program? According to the Canadian Border Services Agency (CBSA) website, the Duties Relief Program relieves the payment of duties, at the time of importation, on imported goods that will eventually be exported either in the same condition or after being used in the processing of other goods.
Why is this important to chicken farmers and their industry? The Duties Relief Program administered by CBSA was not designed for agriculture goods and does not provide adequate safeguards to address the potential for diversion into the domestic market when chicken is imported into Canada for further processing and subsequent re-export.
What can be done? Specifically, we have identified the following concerns with respect to the Duties Relief Program:
- Participants have up to 4 years to re-export the chicken they’ve imported, which runs contrary to Canadian food safety regulations and standards.
- Imported high-value cuts can be substituted with lower value cuts and even spent fowl, meaning that the imported cuts can then displace domestically produced chicken.
- The program duplicates Global Affairs Canada’s Import to- Re-export Program, which was created specifically for agricultural goods.
In light of these concerns, CFC has made recommendations to the federal government requesting that all chicken products be administered under the Import to Re-Export Program which was explicitly designed for perishable agricultural goods. The Canadian government seems to agree with CFC, and as part of its TPP press release, it announced that dairy, poultry and egg products would be excluded from the Duties Relief Program. However, as of yet, no actions have been taken to follow through on this announcement.
What is Spent Fowl? Spent fowl are old laying hens: a by-product of egg and hatching egg production. While broiler chickens are raised for meat consumption, spent fowl hens lay eggs and when their productivity declines, they are processed for their meat.
Why is this important to chicken farmers and their industry? Chicken coming into Canada is subject to import controls, however spent fowl is not—there is no limit on how much can be imported. In fact, in 2012 Canada imported more spent fowl breast meat than was actually produced in the entire U.S., which means that chicken meat was being imported and fraudulently declared as spent fowl in order to bypass import controls.
Unfortunately, there is no specific consumer labeling requirement for the sale of spent fowl. Even though it is imported as spent fowl, it can be sold labelled as fresh broiler chicken. This is misleading to consumers who expect to buy fresh, Canadian chicken and presents a potential danger to those who suffer from egg allergies.
What can be done? The following initiatives could prevent these potential fraudulent activities:
- CFC has successfully developed a DNA test that allows the differentiation of broiler and spent fowl meat. This test could be used to ensure there are no imports of broiler meat identified as spent fowl in order to circumvent import controls.
- A mandatory certification process for spent fowl would put an end to the fraudulent import of mislabeled chicken.
- Truthful labeling would inform consumers that spent fowl is not equivalent to chicken, and alert them about the potential risk of egg allergens.
Specially Defined Mixtures
What is a Specially Defined Mixture? Chicken combined with 13% of other ingredients is labelled a “specially defined mixture” (SDM) and is not considered chicken for import controls purposes. In other words, products containing up to 87% chicken meat are generally not subject to import controls.
Why is this important to chicken farmers and their industry? A handful of companies have identified this as an opportunity to circumvent trade rules, and import even more chicken into Canada. By adding sauce to a box of chicken wings or by stuffing uncooked chicken breast, these companies are deliberately creating products whose sole purpose is to evade import controls.
What can be done? The solution is simple and fully within the federal government’s authority to implement. What is needed from the federal government is to reinstate, into the Canadian Customs Tariff, the sauce and cooking requirements it has already negotiated in Canada’s WTO commitments.
Our interest in international trade is a balanced one. We support Canada’s balanced trade position that allows market access gains for Canadian exporters while preserving the integrity of Canada’s supply management systems. All these challenges not only affect the quality of chicken you purchase, but the jobs and economic revenue associated with the poultry sector.
Remember, supply management is the reason you can find fresh, quality, Canadian chicken at your local grocery store. Next time you are the grocery store, look for the Raised by a Canadian Farmer logo to ensure the chicken you buy is not only home-grown, but continues to support the Canadian economy and create strong, stable jobs.