Quota system must be upheld despite initial financial strain

To the Expositor:

This letter is in response to an article that the Expositor published earlier in the November 9 issue, entitled, ‘Future of Max Burt’s chicken farm in the hands of tribunal.’

Perhaps Mr. Burt does not understand the economics of supply management, and I apologize on behalf of quota holders in Ontario for not providing the correct information to make an informed decision regarding his application to the Chicken Farmers of Ontario.

My husband and I have over 22 years experience, right here in Mr. Burt’s backyard, as quota holders with both the Ontario Egg Marketing Board and the Egg Farmers of Manitoba. The eggs that our family produced were sold directly from our farm gate, through our family owned and operated processing station and retailed across Manitoulin grocery and retail stores for years. Ask any local grocer, and he’ll likely remember my husband Tim delivering eggs every week out of a stock trailer.

The following letter should help to explain our position on supply management in Canada, and hopefully, help the public to gain some understanding of the economics of agriculture in Canada. Perhaps this letter is long overdue, as I am frustrated to find there is much “urban myth” out there as to the process involved with putting poultry, dairy and egg product from the farm to the family table. I’m sorry if the following article is a little long, but I believe it is very necessary.

Back in the spring of 1989, when I was expecting my oldest daughter, my husband and I, then only 24-years-old, scraped together our savings and with a great deal of financial support, purchased a laying hen operation in Massey. We then became owners of a flock of over 20,000 chickens and a grading station. We began producing, grading and retailing eggs, over 10,000 dozen eggs every week, sold to restaurants and grocery stores across Northern Ontario.

Our purchase was a huge financial strain on our small family, since we became registered producers with the Ontario Egg Marketing Board and purchased the quota allotment necessary to produce that amount of eggs, however, we believed in Canada’s supply management system and knew that if we could perservere, our family would flourish.

Supply management is the mechanism by which milk, poultry and egg farmers in Canada adjust their production in order to meet local consumer needs. Supply management was implemented in the early 70s, when our government stepped in to protect farmers from vastly fluctuating food prices. A fair farming model was then based on production management, import control and a pricing policy based on production costs.

The Canadian Egg Marketing Board ensures that Canadians receive high quality egg products that are among the least expensive in the world, while stabilizing producers revenues and allow a better distribution of the consumer dollar, from producer to retailer. It also ensures a local food market and avoids the transportation of food over thousands of kilometers. The system is fully supported by educated farmers who understand the economics of the system, and costs the Canadian taxpayer absolutely nothing! In most other countries, farmers rely on subsidies, which in turn fall on their taxpayers shoulders.

Recently, there have been rumblings of foreign governments to allow our supply management system as a bargaining tool at Transpacific Partnership meetings. Countries such as the US and New Zealand are suggesting that Canada abandon its supply management system in order to join the TPP.

New Zealand tried to implement a supply management system, but it was scrapped when farmers would not implement its mandate. The United Kingdom did away with supply management in 1995, and since then, prices paid to farmers have dropped, and egg prices in grocery stores have risen. In the United States, consumer egg prices fluctuate wildly.

Iowa is by far the most important egg producing state in the US. Its 57 million laying hens produce about 14.25 billion eggs per year (2008 data). That’s more than double the size of Canada’s entire flock. One laying hen facility in Iowa can easily house well over a million chickens, with some barns housing four million. One large facility in Iowa could feed eggs to the whole country of Canada.

There is no price support for egg production in the US, so farms must produce in mass quantity in order to be profitable. In Canada, thanks to supply management, a fair market price is set for eggs using the cost of production formula. Our farmers can count on a fair price for their eggs, and since the quota allotment for birds housed on a farm is based on market consumption, a typical Canadian laying hen farm houses far less than even 100,000 birds.

In a recent USA Today article, an Iowa egg production operation was shut down due to environmental violations. A nationwide salmonella outbreak in the farm’s products led to a recall of 550 million eggs and sickened an estimated 1,900 people. Canada’s Egg Marketing Board ensures a strict regimented production line, which guarantees food safety. The “Start Clean, Stay Clean” system adapted in Canadian laying hen barns rewards farmers for their diligence in safe production. Salmonella testing is mandatory in every Canadian chicken barn, and facilities must pass strict HACCP guidelines. Canada likely produces the safest egg product in the world.

Just very recently, the Canadian Restaurant and Foodservice Association launched its “Free Your Milk” campaign, targeting the Canadian Milk Marketing Agency. They would have Canadian consumers believe that the price they pay for milk and dairy in grocery stores would drop if only supply management is dismantled. However, even though New Zealand consumers pay more for the milk they drink ($1.35-$2.00/L in New Zealand, while Canada pays on average $1.22/L) their farmers get paid less. Canadian consumers pay less for their milk and our farmers earn more.

The Canadian Restaurant and Foodservice Association is barking up the wrong tree! Out of a $2 glass of milk sold in a restaurant, the Canadian dairy farmer’s share is only 21 cents! A typical cheese pizza that sells for $18.50 leaves only 69 cents for the farmer! So who, exactly, is getting “milked” here? The restaurant owner or the farmer?

Canadians spend less of their disposable income for milk and dairy products than they did a decade ago. Although it may appear that Canadians spend more on food, we actually spend on average, 10 percent of our disposable income on food, compared to 39 percent in China, and over 13 percent in the US. (BMO national manager of agriculture.)

Unlike the typical Northern Ontario family who banks on an Xtrata, Vale or Domtar retirement package, our equity and our retirement is tied up in the quota allotment we purchased back in 1989. If supply management is sacrificed in order for Canada to become a member of the TPP, the past 22 years of farming will have amounted to nothing for our family. I believe that if supply management was scrapped, literally thousands of dairy and poultry farmers would face financial ruin, the idealistic notion of the family farm would die and be replaced with the Iowa model of poorly run, overcrowded barns. Our poultry and dairy products could very well be replaced by foreign imports, shipped from thousands of kilometers away.

I am thankful, that unlike Canadian beef, pork or grain producers, supply management has allowed our farm to provide for an enjoyable lifestyle where I can afford to send all three of my daughters to post secondary education and a reasonable retirement for my husband and I. You would like to assume that your years of hard work and commitment invested in your career will reap a comfortable lifestyle. Why shouldn’t farmers?

Farmers in Canada who have invested in the supply management system are reaping good rewards for the safe, nutritious products they produce. This system is working in Canada and serves consumers, taxpayers and the food industry very well. While many government policies have come and gone, supply management, written with pen and ink back in the early 70s will prove to remain the backbone of agriculture in Canada.

Have you thanked a farmer today??

Carolyn and Tim Ruby, owner/operator

Ruby Family Farms, Eagle Rock Farms