History of Supply Management
Although Chicken Farmers of Canada commenced operations in 1979 (back when it was known as the Canadian Chicken Marketing Agency or CCMA), the roots of Canada’s supply management system for chicken go even deeper.
Supply management in the Canadian poultry industry was first proposed in 1948 by Fred Beeson, the editor of Canada Poultryman magazine, to help the Canadian egg industry after England cut back its foreign egg purchases after World War II.
Supply management’s first practical launch was as a provincial strategy to improve the lot of the broiler chicken producers in B.C. This was in response to chicken prices as low as 17.5¢ per lb (38.5¢/kg) in late fall 1961 and the indication that prices were slated to go even lower.
The B.C. Broiler Marketing Board came into being on December 12, 1961; it was the first poultry marketing board in Canada, coming into being after 150 producers considered a draft plan the previous August.
Following B.C.’s example, Quebec and Ontario create their own provincial marketing boards. Although boards such as these improved the bargaining power of the chicken producers, they were continually faced with competing offers of cheaper product from other provinces, as well as from across the U.S. Border.
In his June 1965 editorial, Fred Beeson, then editor of Canada Poultryman, urged broiler growers across the country to meet after the Canadian Hatchery Federation (CHF) convention with the intention of setting up a national broiler council. The Canadian Broiler Council (CBC) was thus formed on October 1, 1965 in Toronto. Its founding members were Chairman Bruce MacNamara (Ontario), Vice-Chair Bob Blair, (B.C.); Bert Hall (Manitoba); Amos Blenkhorn (Nova Scotia); Everett Shiplett (Saskatchewan); Jack Brown (Alberta); Roger Landry (Quebec); and John Janzen, who served as Secretary Treasurer.
The CBC, with members from each of the provincial boards, attempted to negotiate “gentleman’s agreements” on the amount of chicken to be produced. Although members agreed to go home and cut production by a definite percentage, the adherence to the cuts was spotty at best and, at worst, provinces increased production to take advantage of the market opportunities presented by the expected production cuts in other provinces.
Following the trend established by the previous three provinces, Saskatchewan, Nova Scotia and Alberta created provincial marketing boards as well.
In keeping with the other marketing boards, Manitoba opens its own.
In 1970, Ontario and Manitoba were supplying eggs to outlets in Quebec and that province’s government authorized the Quebec egg marketing board to restrict that inward flow. In response, other provinces, including Ontario, restricted the movement of Quebec chicken into their provinces. This was the so-called “Chicken and Egg War”.
Due to the “Chicken and Egg War”, it became clear that provincial marketing plans were limited in being able to cope with problems of interprovincial and international trade and, as a result, the Farm Products Marketing Agencies Act was passed in December 1971; the Act was given assent on January 12, 1972.
The Act provided for an essentially parallel structure at the federal level and intended to dovetail with existing provincial plans. It also established the National Farm Products Marketing Council, which was assigned the duty to advise the Minister of Agriculture about the formation and operations of national agencies operating under the act.
As a national chicken agency and border controls slowly moved their way towards becoming a reality, chicken imports continued to increase – from 698,390 kg in 1971, to 3.8 million kg (Mkg) in 1974.
The Canadian Broiler Council negotiations to develop a national plan for chicken took several years of wrangling. One of the major impediments was a failure to agree on market shares between the various provincial boards. Some provinces liked a goal of provincial self-sufficiency; other provinces – with an established interprovincial market – were not in agreement. Another sticking point was the difference of opinion whether a national chicken agency should have the authority to buy and dispose of surplus product.
The Canadian Egg Marketing Agency (CEMA) was the first of the agencies to be put in place. In this case, the egg came first. CEMA also had great difficulty with the issue of dealing with surplus production. Quebec wanted the national chicken agency to have this pooling authority; Ontario and B.C. did not, because they claimed it encouraged further surpluses, concomitant loss and would lead to extra costs, which might then be passed on to the producers.
In April 1975, the National Farm Products Marketing Council held public hearings across Canada regarding the establishment of a national chicken agency. Following those hearings, Gerald Tedford reported to Ontario producers that the Council had made changes to the proposed plan on a unilateral basis, including provisions which the provincial boards had not agreed upon. Tedford’s report in Canada Poultryman stated, “This, together with the severe criticism of the Egg Agency, cooled out the desire for a National Agency at this time.”
With chicken imports increasing rapidly, from 3.8 Mkg in 1974, to 9.4 Mkg in 1975 and to 952,350 kg in the first 24 days of January 1976, border controls became a critical issue. At a late February meeting in 1976 with Minister of Agriculture Eugene Whelan, producers were told that imports could only be brought under regulation if there was a national supply management system for chicken. It was up to the broiler producers themselves to come up with a workable proposal for an agency.
Although historical production levels in the previous five years had been a basis for discussion, the final provincial tonnage shares were the result of backroom negotiations, primarily between Ontario and Quebec. The formula to decide future provincial allocations was also a major sticking point, with many provinces wanting to get the benefit of any increase in provincial demand. However, the National Farm Products Marketing Agencies Act had in it a clause, which referred to “comparative advantage”, which had been inserted late in the legislative process. The National Farm Products Marketing Council insisted that the federal provincial agreement on chicken was not a platform to promote provincial self-sufficiency.
The Canadian Broiler Council finally adopted a proposal for a national chicken marketing plan on August 12, 1976. This was later amended by the National Farm Products Marketing Council and was forwarded to the federal government lawyers as a base from which Schedule “B” and Schedule “A” – the Proclamation – were developed. Although the CBC proposal became Schedule “C” of the final “Federal Provincial Agreement with respect to the establishment of a Comprehensive Chicken Marketing program in Canada,” its wording is subservient to the other schedules.
Canada Poultryman magazine reported that “The long awaited announcement from Agriculture Minister Eugene Whelan of the formation of a Canadian Chicken Marketing Agency came on December 29, (1978) in a release from Ottawa. Mr. Whelan also announced that steps are being taken to place chicken on the import control list under the Export and Import Permits Act… The new agency will represent 92.6% of national chicken production and 95% of producers.” Because chicken in Canada could not be produced at prices competitive with U.S. product, it is argued that without this national plan, imports would have severely damaged or even destroyed local industries.
The Canadian Chicken Marketing Agency held its inaugural meeting in Ottawa February 5th and 6th, 1979. The CCMA’s first chairman was Eric Meek (Nova Scotia), who had served as the CBC’s chairman for the previous five years. The Executive Committee was rounded out with 1st Vice-Chair Laurent Mercier, (Quebec) and 2nd Vice-Chair Gerald Tedford, (Ontario). Other directors were Leonard LeBlanc (New Brunswick), Bruce McAninch (B.C.), Bert Hall (Manitoba), Percy Naumetz (Saskatchewan) and William Wood (P.E.I.).
Meanwhile, and after intense negotiations, the U.S. was eventually awarded access equal to 6.3% of the domestic production. This percentage was based on the historic amount of chicken that had been imported in the years 1975-1978. Establishing a predictable level of access such as this is now one of the three pillars that make supply management possible while still keeping Canada open to imports.
Until Agency staff was in place, the Ontario Chicken Producers Marketing Board made available the services of John Janzen, the Ontario Secretary-Manager and some of his staff on a part-time basis. The agency’s official solicitor was Francois Lemieux, who had guided the Canadian Broiler Council through muddy waters prior to the formation of the agency. Once formed, the agency hired a General Manager, Paul Guillotte, and the new staff officially opened the agency for business in August of 1979 in Brampton, Ontario.