From the Editors Desk: November 08
Kristy NuddsFeatures Business & Policy Farm Business
Our cover story this month demonstrates something that the poultry industry in Canada is lacking: new entrants into the quota system.
Without doubt there are “new” producers each year, but they are few and far between, and likely have an economic advantage that allows them to purchase quota, land and barns. Often, such fortunate new producers are those that have left the other supply-managed sector – dairy – and thus have the capital required. Or, they are a family member of someone who already has quota.
I realize there are many who acquired large debts and didn’t see a cash flow for many years in order to enter the business, but I fear those days are gone, or they will be for several years to come. Given the recent bank crisis in the United States and leaders around the world putting in motion measures to protect banking industries outside of the U.S. in a desperate attempt to stave off a deep recession (dare I say a depression), banks will not be so eager to extend, or even offer, credit.
Such economic turmoil will undoubtedly make it even more difficult for new entrants into the industry. It will also impact existing producers wishing to purchase additional quota, expand barn space, and purchase and/or upgrade equipment.
This will only add to what I see as an existing problem. As an industry, we must be careful not to dwindle in numbers.
The primary reason for this is maintaining the supply management system. In a democracy numbers count. The more people who are involved, the more clout you carry.
The Conservative government has pledged support for supply management; however, its behaviour, which could be considered harassment, towards the Canadian Wheat Board (CWB) in the last two years makes me wonder how strong this support is, or how long it will last.
The CWB does not operate in the same manner as poultry marketing boards; however, they have two things in common: they get a fair price for commodities grown by Canadian farmers, and are strongly supported by the farmers they represent.
The CWB is seen by Stephen Harper as a monopoly, and his two federal agriculture ministers have worked ever so hard to see it crumble. Fortunately, his government has not been successful, but with a majority government in place, the tables could turn.
The CWB is fortunate with respect to farmer numbers, which reach the tens of thousands. It’s easier to plead a case for many than it is for few.
If supply-managed industries continue to consolidate, both with respect to quota holders and the businesses that serve them, they can be left vulnerable. Lobbying to protect what is viewed by critics of supply management as a decreasing group of large (with respect to quota) farmers could very well lose its lustre in years to come.
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