Agriculture committee  Nine years ago, in a report, and then again three years ago, the oversight agency that is supposed to be monitoring this identified differential growths—differing growths by region in Canada—as a major problem that needed to be addressed, as well as the allocation process. We're having a very hard time.

Agriculture committee  Yes.

Agriculture committee  No. The quota is traded on a secondary market, and most farmers end up getting loans from Farm Credit Canada to finance those quotas. So it's a one-time purchase for the right to produce chicken. When the price for quotas spikes or drops, that doesn't affect the price of the chicken that's produced.

Agriculture committee  I think we've been pretty clear. We think the problem lies within supply management.

Agriculture committee  We're currently experiencing situations where suppliers are capping the amount of a specific type of chicken that can be bought by many of the restaurants in our industry. It's changing from region to region. At one point in time, a cap will be introduced. This is because the processors are not able to get the product they need from the growers in a timely fashion.

Agriculture committee  As we said, within the system we're now allowed to allocate a special increase in production for a province if there's a special event. For example, during the Olympics, B.C. was allowed to grow more chicken because there was a special event. So special allocation adjustments happen, but every province has to agree on that.

Agriculture committee  We're not specialists on international agricultural policy, but what I can tell you is that in Canada, while we don't have the figures of how many cheques the government is cutting to dairy producers, the OECD has calculated that on average it costs each Canadian consumer $70 per year more in dairy costs because of supply management than if we didn't have it.

Agriculture committee  There definitely is a consumer demand for some pieces being grown larger. We see that in grocery stores. We also know that the very system that sets the prices drives production in that direction. To give you a bit of an example—and it's not just Kentucky Fried Chicken—most of the national chains that have chicken as their primary ingredient, and I'm sure you can list a few off the top of your head, have spec.

Agriculture committee  I think for a number of brands they've chosen to go with the Canadian produce, Canadian meats, Canadian products. They have communicated that very well to consumers, and consumers are willing to pay an appropriate price for that. In lots of situations that's worked very, very well.

Agriculture committee  People are eating out less, but the thing that is—

Agriculture committee  Well—

Agriculture committee  Yes.

Agriculture committee  When the reason that a product costs less in a grocery store is that a government policy allows them to buy their input costs at a lower price, that's very frustrating for us. That is really at the heart of it. We believe in fair competition. We compete against items bought in grocery stores every single day.

Agriculture committee  I don't think anyone could give you the perfect solution, and we don't think we have a silver bullet. What we're saying.... I started this off at the very beginning realizing that supply management is very controversial. I have had meetings with members of Parliament who cover their ears and walk out of the room when I bring up the problems we have with supply management.

Agriculture committee  The solution to that is to allow what's called differential growth. It means some provinces' allocation and production of chicken grows more quickly than other provinces', based on their population. Right now, that's something we're trying to work on with chicken farmers in Canada, but the way the structure is set up, each region gets to hold on to its amounts and can refuse to accept any change to the system.