The supply management system under which the Ontario chicken industry operates promotes the production and consumption of safe and healthy locally grown chicken. This system has been effective in ensuring the supply of fresh chicken matches consumer demand and that chicken farmers receive a fair price for their product. Ontarians widely support this system that promotes Ontario food production, supports Ontario farmers and contributes to the provincial economy without the need for government subsidies.
Chicken Farmers of Ontario provides innovative and entrepreneurial leadership to the supply management system that includes a number of agricultural products such as chicken, dairy, eggs and turkey. Supply management is a Canadian economic system that matches domestic production to domestic consumer demand. The system helps ensure that Canadians have access to a stable supply of high quality locally grown chicken at a fair price. It is a system that works for all Canadians.
The Three Pillars of an Effective Supply Management System
Supply management is supported by both federal and provincial legislation. Its orderly marketing system is built on three foundational support pillars: a production planning pillar, an import controls pillar, and a producer pricing pillar.
1. Production Planning Pillar
Under supply management chicken farmers are committed to planned production levels to provide Canadian consumers with a safe and reliable source of chicken in sufficient quantity to meet the changing needs of the market. Having an orderly planned system in which production is calibrated to demand ensures that farmers and consumers are not subject to the boom and bust cycles which characterized the pre-supply management era.
2. Import Control Pillar
Under supply management Canada places a cap on the amount of chicken that can be imported into Canada duty free. Beyond this base amount, effective tariffs rates are used to ensure that import levels are predictable and can be factored into production planning. Despite these import controls Canada remains one of the largest importers of chicken in the world.
3. Producer Pricing Pillar
Canadian farmers through their provincial marketing boards collectively negotiate minimum farmgate price for their production based on the fluctuating costs of production and a fair return to the farmer. Farmers do not set wholesale or retail prices for chicken.
Benefits of Supply Management
- Supply management ensures that Canadian consumers have access to high quality, domestically produced, safe poultry and dairy products that are among the least expensive in the world
- Supply management supports and provides significant economic benefits to an extensive supply chain of competitive domestic industries from feed producers to processors across Canada
- Supply management allows farmers to remain self-sufficient and profitable without relying on the government and taxpayer for support and subsidy programs.