I'd like to thank the committee for the opportunity to present. Manitoba Chicken Producers represents both the hatching egg and the chicken industry in Manitoba, and combined, we represent approximately 142 producers. We produce about 40 million kilograms of chicken on an annual basis and about 39 million hatching eggs in the province.
Supply management is an important and integral component of Canadian agriculture. As such, supply management requires proper recognition of supply management and its three pillars within the APF. The APF, as we all know, is a framework of policies for agriculture and agrifood. The principal goal should be to achieve and sustain profitability and growth for every sector. To achieve this goal of profitable sustainability, the APF must go beyond simply identifying solutions to problems. The APF must also identify, embrace, and strengthen the components of Canadian agriculture that are successful.
The APF must strengthen the mechanisms that allow for these successes such as supply management. These mechanisms must be defended in international agreements to ensure the strength and sustainability of these successful components and programs for the future.
Supply management needs to be clearly defined as a program within the business risk management pillar. Supply management systems are federal-provincial agreements initiated and supported by appropriate legislation that regulates the marketing of dairy, poultry, and eggs in Canada. These systems are dependent upon the support of the three equally important pillars that Bill mentioned.
Producer pricing. Our mechanisms are based on farmers collectively negotiating a fair market return for products such as milk, poultry, and eggs. These fair market returns reflect what it costs to produce a safe, healthy, and nutritious product for the Canadian public.
Import controls, pillar number two. Import control measures are essential to efficiently plan production to meet Canadian demand by permitting imports to the level of access agreed to at WTO or NAFTA agreements. Proper mechanisms to administer and classify products that are imported under tariff rate quotas are also essential. Whether it's article 28 being revisited as products are renewed or as new products are brought into the country or whether it's supplemental tariff rate quotas being given out, these need to be properly handled, and the mechanism needs to be there for industry and producers to have a say in decisions that are made.
The third pillar is production discipline. Production discipline allows for the balance of supply and demand, thereby promoting price and market stability. Production is determined on regular intervals to efficiently reflect changes in consumer demand.
Specific to poultry production within the business risk management programming suite, the poultry industry's primary concern with an agricultural policy framework in business risk management is that poultry support be available for poultry farmers, either as a group or individually, in the event of a disease outbreak that requires depopulation.
The next generation of APF needs to address the gaps in the current programming with respect to ensuring that there is no disincentive for a farmer to report any suspected cases of a rapidly spreading or zoonotic disease.
Appropriate compensation for destroyed animals is critical to a successful pre-emptive cull program and to drastically reducing the cost of a disease outbreak for both government and industry.
Other business risk management programs must cover any Health of Animals Act shortfalls. Some of the issues that are of concern are costs associated with cleaning and disinfecting, and business interruption.
Secondly, the BRM programming suite must ensure that any negative economic impact on other farmers or businesses in close proximity to a diseased farm is minimized until normal production can resume. Farmers who are caught in the net who aren't necessarily directly affected are not covered by the Health of Animals Act, and their most significant risk is their inability to produce or market their products.
Thirdly, the BRM suite must ensure that industry mitigation efforts are covered--reimbursement of expenses for industry, for mitigation efforts such as cleaning, disinfecting, rendering, etc.
With respect to the existing programs that are available under the Health of Animals Act, compensation maximums under the compensation for destroyed animals regulations must be at levels that encourage early reporting. The Health of Animals Act must include compensation for fixed costs.
I think several people have spoken to CAIS already, but to speak specifically to the poultry industry, with the implementation of CAIS, poultry farmers lost the disaster coverage they had under previous programs. The current CAIS program does not meet the needs of poultry farmers, as even in a disaster a margin decline of 30% is not common, and therefore poultry farmers do not trigger the program. In the B.C. avian influenza crisis, over $3 million of claims were submitted. Approximately $100,000 of claims were approved.
Manitoba chicken producers applaud the expansion of production insurance to all commodities, and we view it as positive. However, the proposed model is essentially mortality insurance, which will not provide any additional benefit to poultry farmers beyond the existing Health of Animals Act.
That leaves a gap. Additional insurable areas need to be included in this program. Production insurance needs to cover fixed costs resulting from animal disease that are not covered under the Health of Animals Act. These need to be analyzed.
The disaster framework has been authored to compensate farmers in a disaster scenario where gaps occur in other programming. Our understanding is that the framework will only trigger when there is a “collective” disaster. Nowhere have we been able to find out what the definition of “collective” is. It's our position that the disaster framework must apply to a single farmer who suffers a disaster. Again, the APF II must ensure that there is no disincentive for farmers to report on an issue.
On ad hoc programming, Manitoba chicken producers are concerned that the gaps that exist in the business risk management programming suite may only be covered by ad hoc programming. Ad hoc programming is not business risk management. It is strictly financial redress, and in many cases it's not forthcoming once an incident has occurred. The poultry industry is proactively pursuing initiatives to manage and reduce risk as well as food safety issues, and we need the government to support these initiatives with comprehensive business risk management programming that covers all identified gaps.
Thank you.