I'm a chicken farmer from Stanbridge Station, Quebec, in the Brome—Missisquoi riding, and I'm the chair of the Chicken Farmers of Canada.
Our industry contributes $8 billion to Canada's GDP, supports more than 101,900 jobs and generates $1.9 billion in tax revenue for the government. Canada's 2,877 chicken farmers are proud to raise birds that represent Canada's number one meat protein, in the good times and the more challenging ones—as is currently the case. As is seen across the country, and even across the world, the COVID-19 crisis has left no sector untouched, especially not ours.
Chicken Farmers of Canada was pleased to see the government's announcement on May 5, 2020 in support of the agriculture and agri-food sector, but we need to highlight that these measures do not go far enough in supporting Canadian agriculture and, in particular, Canadian chicken farmers. In order to continue to ensure food security for Canadians, further support for Canadian chicken farmers and processors is needed as we navigate the unprecedented stress and pressures of the pandemic.
Currently, the Canadian chicken sector is seeing unprecedented market conditions as a result of the infamous COVID-19 virus. Food service, which usually represents approximately 40% of the market—so a huge share—has experienced a rapid decline in sales, almost overnight. In retail, there was an initial surge in sales caused by consumer stockpiling, but that demand has now stabilized, resulting in a total demand that is below usual volumes.
What does this mean for farmers? The rapid decrease in food service meant that farmers and processors were left with surplus production for a short period of time. Thankfully, the flexibility provided by supply management allowed our board of directors to quickly react and adjust production for the coming months, hoping to avoid a worst-case scenario of depopulation. On April 14, the board of directors reduced allocation for May 10 to July 4 by 12.6%, and recently adjusted the national allocation for July 5 to August 29 by 9.75%. Those decisions were made to deal with the situation in a responsible way and to make sure the chicken supply was sufficient to meet demand in Canada.
While we have been able to adjust production, that does not entirely alleviate the stresses on farmers and processors during this time. Some processing plants may have to reduce their slaughter and processing volumes of chicken owing to physical distancing requirements, employee absenteeism and complete shutdown to isolate workers and deep clean facilities for longer periods of time.
Processors are working closely with one another and with farmers to redirect birds if and when needed, as was the case in early April in Ontario and in early May in British Columbia. However, there are limits to the number of birds that can be processed by other plants if a plant significantly reduces its activity or is completely shut down. This reduced throughput and risk of plant shutdowns significantly increases the risk of farmers having to depopulate flocks.
Farmers do not take depopulation lightly. In addition to impacting the food supply of Canadians, depopulation means a loss of the flocks farmers have spent time, money and energy raising. It also means a financial loss.
In the event that processors do not have the capacity to process chickens, farmers will have to work quickly with their processors to determine next steps, and at this point in time, they do not have government assurance that the live price of the birds will be covered.
Based on the government's announcement, our understanding is that AgriRecovery will cover up to 90% of the costs of depopulation. This does not address the value of the flocks being depopulated, the administrative burden on the farmer or the lobbying of provincial governments to provide their portion of business risk management funding.
Throughout numerous conversations with government officials, we have reminded them that, under the Health of Animals Act, depopulation is supported in instances of disease. We are well aware that the act was specifically designed to cope with animal disease, but we believe what the sector is experiencing now—with processing capacity, depopulation and the overall impact on operations—follows the intent of the act and has the same consequences for farmers.
We are disappointed that the government has not looked to this well-functioning model to support the chicken sector in the event that depopulation is necessary.
While the business risk management suite of programs is designed to address fluctuations in income to support farmers in times of need, it does not work for chicken farmers in cases—