Poultry and egg producers got what they were looking for last week when the federal government announced investment funding to compensate for market losses due to the Comprehensive and Progressive agreement for Trans-Pacific Partnership (CPTPP) deal.
The dairy and feather supply-managed sectors have been promised compensation in exchange for increased international access to Canadian markets. Dairy began receiving compensation last year, while poultry sectors only last week learned the details about what they might receive. The gross amount, $691 million paid over a decade, was announced at the end of November.
While the devil may be in the details, the government is an angel investor for the nation’s 4,800 chicken, turkey and egg producers.
Dairy producers received direct payments to compensate for the potential loss in quota value and for having to compete with processors from abroad.
Canada’s 10,000 or so dairy farmers are receiving about $1.75 billion over four years for the Canada-European Union Comprehensive Economic and Trade Agreement (CETA) and the CPTPP. That arrangement began paying out in 2020 and continues this year as producers are receiving cash payments of $468 million. This year and next it will be $469 million and in 2022 and 2023 it will be another $468 million.
Poultry producers’ ask, at least for the CPTPP, was for investments in their farms to make them more financially and environmentally sustainable. Though it took longer for government to announce, poultry’s piece was more complicated than dairy due to the investment parts of the compensation puzzle.
The bulk of the money, $630 million, is designed to help poultry and egg farmers modernize their operations and improve competitiveness, as well as meet new market demands. With new competition coming from regions with lower cost of production, Canadian farmers will likely look to bolster their sustainability and made-in-Canada reputation by improving barns and bird housing to meet consumer expectations.
By differentiating themselves from international competitors and their bulk commodity foods, domestic consumers can select potentially higher-priced products that fit their budgets and tastes.
Money will also be used to improve Canadian poultry product marketing, which was another strategic request on the part of producers.
Farmers older than 35 will see 70 percent of their new farm investments matched, while younger producers get 85 percent. It’s a strategy to provide entry for the next generation of poultry and egg producers, who additionally have more time to accumulate returns on those investments, making them even more attractive. That helps maintain the value of farms by creating future demand for quota and market share. Further, it stabilizes the processing sector by ensuring supply.
Paying the compensation over a decade should give farmers the opportunity to set some wheels in motion for intergenerational transfer and farm development. In that way, it focuses on the creation of future opportunities rather than on payments for immediate needs.
Now we await the plan for government compensation to supply management regarding the Canada-United States-Mexico trade deal for both dairy and the feather sectors. Will it be more strategic thinking? Or cash deals?
Karen Briere, Bruce Dyck, Barb Glen and Mike Raine collaborate in the writing of Western Producer editorials.