Friday, March 1, 2013

$10.8 Billion of Fascist Chicken in Canada

Small Flockers have taken the position that the greater good of the public trumps the wishes of everybody else.  Where did we get such a crazy idea?

Under Section 95 of the Canadian Constitution Acts (1867 – 1982), Provincial Parliaments are empowered over agriculture, provided that their provincial acts and regulations are not repugnant to any Acts of Canada’s Parliament.  Both the Federal Government and the Provincial Governments are empowered to pass legislation on agriculture.

The Federal Government passed a number of laws and regulations to set up a Canada-wide Supply Management system back in the 1960's.  In 2001, the Feds finished negotiations to resolve the egg and chicken wars between Provinces, and an agreement was signed by all the parties, the 2001 Federal-Provincial Agreement for Chicken.

I'm sure that CFO must have heard about this agreement, because they were one of the signatories on the documents, as was the Government of Ontario.

Excerpt from 2001 Federal-Provincial Agreement on Chicken
In that agreement, it states that everybody will get along and play nicely together.  The recent skirmishes over chicken between Ontario and Quebec, and between Quebec and New Brunswick don't seem to meet that expectation, but that is another story for another day.

Under Section 1.01 of that agreement (see at right), all the parties are supposed to work is a Supply Management system that must have a number of very important characteristics. If we have something imposed upon us that doesn't meet these minimum requirements, then they aren't following the rules.  If they don't follow the rules, than we don't have to follow these made-up rules either, for what they ended up doing is ultra vires.  They have no legal basis for doing what they are currently doing.

Especially note Section 1.01 d) where we are required to have a system that works in the balanced interest of producers, industry stakeholders and consumers.  To me that means the decisions have to be equally good (or equally bad) for all three of these groups.

Is that what is occurring?  Raube Beureman just posted a comment on this website that Walmart USA chicken was $4.38/kg, while Walmart Canada offered the same chicken for $13.54/kg at the same time, in neighbouring cities.  That's 3.09 times more expensive in Canada for the same chicken.  Does that sound like "balanced interest"?

Where does all that money go?

CFO reports that in 2011 they produced 452 million kg. of live chicken at a price of $1.596/kg.  Typically the eviscerated weight is 73.72% of the live weight, so we got 333.236 million kg of eviscerated meat.  Add to that about 159 million kg of eviscerated chicken imported into Canada in a year, of which Ontario gets about 33%, so we have a grand total of 385.75 million kg per year of eviscerated chicken.  Now charge Canadians a premium price of $9.16/kg extra for that chicken (ie. $13.54 - 4.38= $9.16/kg).  That price premium for chicken that we are forced to pay sucks out $3.53 Billion per year from the Ontario pocketbook.

According to Ontario's Ministry of Finance in 2012 the total spending for the Ontario Ministry of Agriculture and Food will be $1.546 Billion (operating, assets, and capital expenditure).  So our premium chicken prices could pay for running the entire OMAF for a year, and put $1.98 Billion towards reducing the provincial deficit.

What about Canada-wide?  Chicken Farmers of Canada report in their 2012 Chicken Databook that 1.023 Billion kg of eviscerated chicken were produced in Canada during 2011 (latest stats available).  Adding the same imports of 159 Million kg stated above, we have a total of 1.182 Billion kg. of chicken.  At the price premium pricing over US chicken of $9.16/kg, that is a chicken tax of $10.827 Billion per year which consumers are forced to pay.  With 13.3 million households in Canada, that is a chicken tax of $814.00 per year per Canadian household.

I wonder who got those extra Billions.  What would consumers have spent their money on if they didn't have to pay those premium chicken prices?  If the government got the money instead, would they have reduced our taxes, paid down the deficit, or provided us $10.8 Billion of additional services?  If we are forced to pay an extra $10.8 Billion per year for premium prices on chicken, we can't spent it on something else.

We hear about Banana Republics where the dictator is smuggling plane loads of diamonds and gold out of the country, as the infrastructure crumbles and the people are starved.  Should we be placing observers at Toronto International Airport watching as our Canadian tyrants take $10.8 billion per year of hard-earned money away from Canadians and spirit it off to parts unknown?

Fascism is defined as when government and business are co-conspirators for their special interests by controlling and repressing the people.  Do we have a $10.8 Billion/yr. case of fascism here in Canada?


  1. The markups you refer to are just further proof that farmers, including chicken farmers, have no marketing clout. Blaming farmers for what grocery stores charge after an 800% mark up defies logic

    1. Thanks for your comments. I'm glad you took the time to respond.

      I have said a few times that the mega-factory, quota-bearing chicken producers get a small fraction of the total profit that is extracted from the Canadian public. It is the feed mills, large processors, and downstream distribution systems who get the majority of the profit.

      Canadian SM producers are supposed to be fairly compensated for their investment and hard work. In the case of chicken producers, I believe I have adequately proved that they receive more than their "fair compensation" by using trickery and bogus calculations.

      By the producers cheating, I believe this enables and encourages everybody else downstream to do the same. The consumer ends up paying for all this cheating. We need to clean house, starting at the beginning.

      SM was put in place decades ago because chicken farmers had inadequate clout, and were being run into the ground by the big boys. Today, we have a huge, fossilized SM bureaucracy and farmers still don't have adequate marketing clout, just as you said. So what's the point of keeping this useless SM bureaucracy?

      Let's change the SM system so it works, or get rid of it.


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