Ontario has six supply management boards for agriculture, and a whole range of other marketing boards collectively referred to as "negotiating" boards. The difference between them is easy: negotiationg boards negotiate prices on behalf of their members, and in some cases have the authority to establish price. Supply management boards do all that, but they also have the authority to regulate production. If the word "quota" comes into play, you're looking at a supply management board. Simple, isn't it? Unfortunately, that's where "simple" ends when it comes to that topic (unless you include "simple-minded", but I give away my slant already!).
The need for supply management is, as far as I'm concerned, a direct result of the application of industrial principles to agriculture. We're striving for greater so-called efficiency (if efficiency is narrowly defined as units of production per producer/unit of land), and supporting this with research and development which enables this intensification and concentration of production. So, one farmer can produce more stuff - be it chickens, bushels of corn, whatever - than his grandfather could. This can only be done with higher inputs - bigger tractors, more (and more expensive) implements, incredible petrochemical inputs through fuel and fertilizer, the application of these new super hybrids and of course the suite of chemical technologies that go hand in hand with these. All of this means that farming has become far more capital intensive, and along with that had come a concern for "sustainability" - because, from an environmental standpoint, what the juggernaut of industrial agriculture is doing can't go on in this trajectory forever. Not if you consider soil, groundwater, antibiotic resistance, disease outbreak in livestock and so forth. And not if you consider that political pawn, the "family farmer". Because net farm income isn't going up, on average - it's the story from the post-war agricultural miracle, isn't it: I can produce more and more and more stuff with my big tractor on my big farm using my big seed drill and my big herbicide spray rig... but so can my neighbour. And when we both produce way more than we as a society need, the laws of supply and demand kick in and prices per unit fall. My natural reaction as a producer, of course, is this: increase production to make more money. Get me a bigger tractor. And so forth. The two hallmarks of industrial agriculture right there: the cost-price squeeze (to get these huge yields, I need huge inputs, and they cost money. As petroleum prices go up, so do the costs of my inputs. But because there is so much more of what I'm growing, the per unit return drops...) and the technological treadmill (If I make less per unit and thus need to make more units, I need more land more equipment more inputs... and more money to pay for it all. So I need to pay off the equipment, using it as intensively as possible, and I get into a vicious cycle).
So... well, wouldn't it make sense to figure out how many units of anything - litres of milk, dozens of eggs, whatever - we need, and to figure out what is a "fair" price, and then stick with that? Of course it would. That's where supply management came in. In theory, this would help address the "wine lakes and butter mountains", as the catchphrase went when supply management was introduced in the EEC aka EU in the late 70s and early 80s. Limit how much is produced, get a better price, because I'm not looking at trying to market twice as many eggs as there is demand for... and let a central agency do the marketing for me, I'm guaranteed my fair price and my buyer. Beauty.
If the theory worked...
I'm not saying it couldn't work, I'm saying it hasn't worked, at least not in our context in Ontario. Intensification and concentration have continued unabated - and helped along by the supply management boards no less. Let's illustrate by the example of chickens and eggs in Ontario, shall we? I've spent a few hours in recent weeks wading through the murky waters of what you can and can't do if you want to raise chickens and/or eggs in Ontario.
There are three supply management boards that relate to chickens and eggs in Ontario: the Chicken Farmers of Ontario (CFO), the Ontario Broiler Hatching Egg and Chick Commission (OBHECC) and the Ontario Egg Producers (OEP). The CFO are in charge of the chickens we eat (broilers and roasters), the OBHECC of producing chicks that end up as either broilers/roasters or laying hens, and the OEP deal with the eggs we consume. And here's how it works: all chicken produced and marketed in Ontario must be on a quota basis. So far, so good. Except that the quota is fixed to certain owners, and they are the ones that, collectively, run the CFO, which in turns makes the rules about ownership. They made the rule, for example, that the minimum quota required to play the game be 14,000 units per annum. A "unit" is 12.1 kg of chicken (live weight). So, to be part of the club (assuming you can afford to buy your way in, but more of that in a minute), you need to pump out 169,400 kg of chicken every year. A "broiler" is defined as less than 2.5 kg. So, let's say you're marketing 2 kg chickens - you need 84,700 chickens every year. If you're using the high-tech chickens that gain weight so quickly and are propped up by all sorts of chemical mixes, you can get six crops a year, sure. That means, if you're buying into the technology, you need a minimum facility capacity of over 14,000 chickens. If you are heretical enough to produce lower-yielding breeds that only give you, say, four crops per year, you'll need a bigger barn: you now need to house over 21,000 chickens at any given time.
That's a bit of capital to put down, especially if you're not a chicken farm but a mixed family farm. Because you're not just investing in getting the know-how to do all this and the barn to do it in and the equipment to do it with, you also need the quota. The quota is valued at about $60 per unit (plus the 20 cents transfer fee if you're buying it from anyone other than your father and grandfather). So, just to meet the minimum entry requirements for the chicken club, you need to plunk down $840,000. Yikes.
Ah... but what about the family farm, you say, what about all those happy chickens scratching away on farmyards all across the province? Well, yes, there are "exemptions". Currently, you can have 102 chicks per year for home consumption. In 2003, you got just under $1.20 per kg live weight if you went through the marketing boards. Assume that for your home flock, assume you can bring all 102 chicks to market weight, and assume you can get them to 2.5 kg each. That's $306 per farmer taking his exemption to the max in Ontario. Total farm gate value of chickens marketed in Ontario in 2003? $492.1 million. If 10,000 people took advantage of the exemption, that would still be less than 1% of the value of chicken produced in Ontario. Huh. Now rumour has it that there's talk of doing away with even that exemption. I'm sure you figured out by now that all exemptions are granted by the supply management board...
As for laying hens - the average egg farm in Ontario has just over 16,500 hens. But at least this one is an easier game to play: you can buy quota at $62 or so per hen, and you only need 500 of them to be allowed in - so your quota cash outlay is $31,000. The average hen lays just over 300 egss per year. Let's be optimistic and say that all of these are large and extra large eggs - currently, you'd get 13.1 cents per egg. So every hen grosses $39.30 per year. At 500 hens, you'd have gross returns of $19,650 per year. Gross. Out of that, you have to pay your loans and mortgage, buy chicken feed, pay vet bills, pay for chicks to replace your flock... if there's any left over... I think it's safe to conclude that, with the current pricing structure, it wouldn't really be worth it to get into the game with 500 hens. But apply the same math to the average size flock, and you're looking at over $650,000 gross returns. A price structure that's designed to encourage intensification and concentration, perhaps? So it comes as no surprise that there are only 421 egg producers in Ontario.
Now, I as a consumer don't want certain things. I don't want battery eggs, I don't want chickens from the minimum 14,000 units operations... and I'm willing to pay for that. I'm quite happy to let farmers have more than 13 cents per egg. But, let's back up, who sets the prices? That's right, the CFO and the OEP. And who sits on the CFO and the OEP? That's right, the people who are big enough to qualify. And who can grant exemptions? The CFO and the OEP. And why would they want to encourage this "cottage" sort of quality production? Right.
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If you've driven anywhere in Canada in the past week, you can scarcely miss the fact that there's an election on. So, given that agriculture is an issue I'm interested in, and given that my rant of the week is the dis-incientives to family farming our farm policy implicitly and explicitly includes, let's have a look at where our main parties stand on this issue.
From Steven Harper's camp, we have that "The Conservative Party will fight for farmers. We will protect farmers against conditions outside their control and vigorously defend them in international trade negotiations." This means, according to the platform, that they will "ensure industries under the protection of supply management remain viable" and they will "support the goal of supply management to deliver a high-quality product to consumers for a fair price with a reasonable return to the producer". Now, let's see - does that mean that the status quo, which gives a reasonable return to the big guys currently in the club and effectively shuts out all others, remains viable? Hmmmm.
The Liberal Party Platform tells me that "no industry today can afford to fall behind the leading edge of technology and innovation. In fact, many of Canada's traditional industries, whether in the resource or manufacturing sectors, are just as technologically sophisticated as those in sectors we usually refer to as 'high tech' ". Well, somehow, that smacks of investment in biotech... and thus I'm not surprised that they "will facilitate the investments needed to develop value-added food products" (isn't that just a cuddly heap of euphemisms?). Oh, right, my chief interest today, they "will develop orderly marketing systems, including supply management systems". Status quo it is. What's new? Well, no time for anything new, since we're all in a tizzy about managing crises - like avian flu and BSE - and have no time to really think about a vision which includes family farms. No, we're all about the farm "sector", not farmers - which, apparently, means propping up industry.
The NDP, at least, explicitly recognizes the family farm as something we want. But, as always, they are "promoting an agriculture policy that preserves what Canadian farmers have created to protect themselves, including the Canadian Wheat Board and supply management in dairy and poultry". (They're also visioioning "sustainable agriculture outcomes that will help reduce input costs for pesticides, herbicides and fuel". I only hope that that's a typo...) By and large, Jack Layton is saying the best stuff so far when it comes to agriculture. We hear phrases like moratorium on genetically modified wheat and the very promising "food system approach" to agriculture. I can get behind this if there is a) recognition that the way the supply management boards are currently configured is not optimal and b) the goal of making inputs for chemical-intensive farming really is a typo, and we're actually aiming to reduce inputs of pesticides, herbicides and fuel. But you never know. Do I want a party that makes that big a typo, or one that wants to make it cheaper to put this stuff on the land? Rock and a hard place?
Ah, but if you've been to the farm lately, you'll have seen the Green Party sign at the end of the lane. But, here the recognition from the Greens' Platform: "Over the last five decades, federal policies and subsidies have supported the production and export of cheap commodities — much at the expense of family farmers, the environment and the sustainability of rural communities. In short, agriculture has become agribusiness." Furthermore, they would like to "develop supply management that provides stable domestic markets, viable pricing and easier access for smaller family farms." And "encourage a transition to organic agriculture rather than subsidizing costly agro-chemicals and genetically modified crops, adapt regulations to support small and medium size food processors, thus building and strengthening local food economies and shift government-supported research away from biotechnology and toward sustainable food production."
Seriously, how does that not make sense?
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And that concludes the Barn Troll's Analysis of the Platforms with respect to Agriculture (not seriously considering the Bloc here, I'm in Ontario). We need a paradigm shift in how we think about food and food systems. Thomas Kuhn would call it a "revolution". I wouldn't disagree with him.