Supply management is a uniquely Canadian approach to agricultural production that benefits Canadian farmers, processors and consumers. Farmers get a fair return for their products, processors get a reliable supply of product, and Canadians are provided with a consistent choice of excellent and high-quality products at reasonable prices – all without government subsidies.
For all that to be possible, three critical and equally important pillars must be maintained: if one pillar is weakened, supply management as a whole is weakened.
Production Planning Pillar
Under supply management, farmers plan their production to provide a steady supply of quality food that efficiently reflects changes in demand: this prevents sudden price shifts as products move from farm to plate. In our case, we make sure to raise the required volume to meet Canadian demand.
As part of planning production, we use a quota system to ensure there are no surpluses or shortages of chicken on the market. Regulated chicken farmers buy quota in order to grow chicken to be shipped to processors. Purchasing quota is a lot like buying franchise rights, whether as a restaurant operator or a taxi owner: it’s an investment in the stability provided by supply management. Whereas those who were in the business at the time the system was put in place were given quota, new farmers must purchase some through their provincial marketing boards, many of which have new entrant programs to help them get started.
From there, the supply of chicken is kept steady by determining how much chicken to produce every eight weeks. Directors determine that amount based on provincial requests and indications from industry stakeholders, market forces and how much chicken Canadians are eating.
Import Controls Pillar
Matching supply with demand for food allows Canadians to count on stable food prices and farmers to make a sustainable living in agriculture. This is only possible, however, when we can safely predict how much food will be imported into the country: the predictability of imports play a crucial role in determining how much chicken we need to produce domestically to satisfy the country’s needs.
To achieve this, we need tariff rate quotas with effective over-quota tariffs to control imports of chicken products in all their forms.
Producer Pricing Pillar
The third pillar, producer pricing, is what allows supply-managed farmers to receive a stable income for their hard work and form a sustainable, subsidy-free industry.
In Canada, our chicken farmers collectively negotiate minimum farm gate prices – what they receive when their product leaves the farm. By acting together, farmers negotiate a fair price for their products based on what it costs to produce them. This should not be confused with wholesale or retail prices: farmers have no say on those.