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Monday, March 18, 2013

Magical Trucks of Chicken

Since starting this Blog 18 days ago, I've been receiving a number of interesting phone calls and emails.  Most of the people who called wanted to remain anonymous, and once they explained the purpose of contacting me, I understood the reason for the secrecy.

They were intrigued with all that I wrote so far on the Blog, but wondered when I was going to get down to the real juicy stuff.

"What might that be", I asked.

"The magical chicken trucks", they said.

I was confused, so I asked them to explain.

They said that they used to work in one of the slaughter plants.  Every once and a while, they would load a truck with eviscerated chickens that was supposed to be exported from Canada, but it never crossed the US-Canadian border.  It went somewhere else.  Nobody on the plant floor knew where it went, except that it didn't go export like it was supposed to.

"It was a magical chicken truck", they repeated.

After asking some more questions, my light bulb finally went on.  You see, eviscerated chicken all looks the same, it's not traceable except by the paper that accompanies the chicken.  One truckload of chicken looks the same as the next; they're indistinguishable.

It appears that live chicken had been imported from the US for Canadian processing, and they were supposed to be re-exported as eviscerated chicken meat to some foreign country.  However, those chickens never left Canada.  By claiming to import for subsequent re-exporting, the processor escapes paying the 300% import tariff.  When the magical chicken truck is used, the chicken appears to leave Canada (but don't), and then the processor was free to sell the resulting meat in Canada at 3 times the selling price available in export markets.  Not a bad profit margin, if you can get away with it.

After all, it's easy for a magician to make a magical chicken truck disappear here and re-appear over there.   

Another person contacted me to say that they drove long haul reefer truck, often for chicken slaughter plants exporting to the States.  Sometimes they would have a load that they took to the States that would have some paper problems.  It appears that 2 or more slaughter plants were claiming the same truck as their own shipment, so that it would go towards their export quota license.

You get awarded quota for export, then claim that you exported as you were supposed to do (but never really export those chickens).  You then have an extra truckload of chicken in Canada that you can sell in the high priced Canadian chicken market.  That sounds like a nice way to make some quick cash, provided you can get away with it.

I understand that both Chicken Farmers of Ontario (CFO) and Chicken Farmers of Canada (CFC) are supposed to be monitoring the chicken supply management system, and ensuring that the rules are followed by everybody.

Whatever you do, make sure you don't wake up CFO or CFC to tell them about the magical chicken trucks.  They're trying to sleep.

2 comments:

  1. so DFAIT or CFC doesn't track imported chicken and compares it to exported chicken and existing supply? It isnt balanced by period to forecast supply? I am sure FPCC would do this, and DFAIT would do this, and even Statistics Canada does this.
    Enough with these conspiracy theories man.

    ReplyDelete
    Replies
    1. I can understand your skepticism, for we Canadians tend to trust.

      The following excerpt is taken from a Farm Products Council of Canada ("FPCC") hearing where they seem to collaborate what my anonymous tipsters informed me about:

      "The CFC audit, among other things, revealed a number of instances of double-counting, where two processors were claiming export credit for the same product. CFC decided, under the circumstances, to enter into settlement agreements with all of the processors."

      You can read it yourself here: http://www.fpcc-cpac.gc.ca/index.php/eng/component/content/108?task=view

      The above section is about half way down the document. search the text and you will find it.

      Delete

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