Agriculture and Agri

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<p>Agriculture and AgriFood Canadawww.agr.gc.ca Skip to content | Skip to institutional links Franais Home Contact Us Help Search canada.gc.caHome &gt; Economic and Market Information &gt; Poultry Marketplace &gt; Profile of the Canadian Egg Industry</p> <p>Producers Agri-Industries International Business Science and Innovation Agri-Environment Poultry and Eggs Industry Profile Market Information Research Trade Legislation Frequently Asked Questions Browse by Type Subjects A-Z Economic and Market Information Programs and Services Publications Newsroom Stay in Touch Email Subscription</p> <p>Poultry MarketplaceProfile of The Canadian Egg Industry Chapter 1: Introduction</p> <p>Index Chapter 1: Introduction o 1.1 Supply management in the egg industry o 1.2 Legislative framework 1.2.1 Farm Products Marketing Agencies Act 1.2.2 Farm Products Council of Canada (FPCC) 1.2.3 Egg Farmers of Canada 1.2.4 Federal-Provincial Agreement (FPA) 1.2.5 Export and Import Permits Act o 1.3 International trade agreements 1.3.1 Canada-United States Free Trade Agreement (FTA) and North American Free Trade Agreement (NAFTA) 1.3.2 General Agreement on Tariffs and Trade (GATT), the Uruguay Round and the World Trade Organization (WTO) Chapter 2 : Global Economic Environment in the Egg for Consumption Sector Chapter 3 : Stucture of the Canadian Egg Industry Chapter 4 : International Trade and Canada Bibliography Schedule A: The Import Control List and Non-Import Control list Tables, Graphs and Charts</p> <p>1.1 Supply management in the egg industryDuring the Great Depression in the 1930s, farmers in Canada faced a constant struggle to maintain, stabilize and increase farm revenue. That struggle led the federal and provincial governments to implement legislation promoting a collective marketing environment for agricultural products while respecting the constitutional jurisdictions of the various levels of government. The modern foundation of the national egg supply management policy dates back to the late 1960s. Over the years, producers banded together to form marketing boards for milk, eggs and chicken. These marketing boards operated under provincial government authority. However, in the 1970s, the limitations of implementing supply management at the provincial level became apparent. The export vocation of some provinces and management of surpluses resulted in trade tensions between the provinces. It quickly became evident to egg producers that there were limits on what supply management could do without coordination by the provinces and the federal government. Box 1. Definition of supply management</p> <p>The agricultural supply management policy in Canada is based on production that is planned to match demand through production quotas, producer pricing that reflects production costs, and control of imports.</p> <p>In 1968, the Canadian Egg Producers Council and the Canadian Federation of Agriculture sponsored the first national conference of egg producers in Canada. It recommended immediately establishing a national agency supported by federal legislation. The federal government of the day initially responded with Bill C-107, a predecessor of todays Farm Products Agencies Act. Bill C-197 was subsequently introduced. Bill C-197 would have enabled a national marketing agency to control the amount of agricultural commodity marketed based on consumer demand through a production quota system and to allocate a portion of the national market to each province. The national agency would also have prohibited production surpluses in one province from being sold in other provinces and would have set the price to producers based on the production costs of a plurality of them. However, the Bill died on the order paper due to opposition from groups who maintained that the Bill did not give agricultural producers enough control over decisions of the national agency. Other groups were also strongly opposed to the principle of government regulation of a segment of the market economy. Ultimately, Bill C-197 was reintroduced as Bill C-176. There was substantial debate and reaction in government and in the agriculture community, and passage was delayed. It was necessary to determine if a majority of farmers producing any given commodity wanted to be headed by a national marketing organization for that commodity. The National Farm Products Marketing Council, now known as the Farm Products Council of Canada, was established by the federal government to pave the way for the creation of the Canadian Egg Marketing Agency. The Farm Products Agencies Act received royal assent in January 1972 together with provincial legislation enabling poultry producers to establish national marketing boards, and supply management emerged on the federal scene. Egg Farmers of Canada came into being in December 1972 and began operating in June 1973. In 2008, the producers organization changed its corporate name from the Canadian Egg Marketing Agency (CEMA) to Egg Producers of Canada (EPC).</p> <p>1.2 Legislative frameworkIn Canada, supply management is governed by provincial and federal legislation as well as federal-provincial agreements. Some provincial and federal initiatives are presented below for reference purposes. The Ontario Egg Producers Marketing Board was established in 1964. In Quebec, a joint marketing plan for egg producers was launched in 1966. In western Canada, in 1967 egg</p> <p>producers in British Columbia came under the British Columbia Egg Marketing Scheme, 1967, while producers in Alberta created their own marketing board in 1968. At the federal level, the enactment of the Farm Products Agencies Act (FPAA) in 1972 signalled the starting point of the model for supply management. Various federal initiatives are presented in the following subsections.</p> <p>1.2.1 Farm Products Marketing Agencies ActThe Farm Products Marketing Agencies Act (1970-71-72, c. 65, s. 1) was enacted in 1972 for poultry to establish the National Farm Products Marketing Council and to authorize the creation of national farm products marketing agencies. The Act was subsequently replaced by the Farm Products Agencies Act (FPAA) (R.S. 1985, c. F-4). With the inception of the FPAA, the Farm Products Council of Canada (FPCC) and national marketing agencies were created. These marketing agencies are assigned authority to implement and administer national marketing plans, allocate quota and market share and generate revenue through levies. The FPCC was then placed in charge of overseeing these agencies and administering FPAA legislation.</p> <p>1.2.2 Farm Products Council of Canada (FPCC)The FPCC reports to the Parliament of Canada through the Minister of Agriculture and AgriFood. Its mission is to promote the efficiency and competitiveness of Canadas agriculture. The FPCC also helps to improve farm-product marketing between Canadian provinces and territories and internationally. In addition, it supervises the operations of four national marketing agencies, including Egg Farmers of Canada. The FPCC is composed of at least three members, and may have up to nine. At least half the Councils members must be agricultural producers. The Councils responsibilities are given below. 1 In its operations, the Council consults the agencies as well as provincial and territorial governments and other branches of the Government of Canada. The Council approves agency orders and regulations. It also hears complaints about agency decisions.</p> <p>1.2.3</p> <p>Egg Farmers of Canada</p> <p>Egg Farmers of Canada is a national marketing agency that manages Canadas supply of eggs for consumption. It estimates the demand required for the table and processing markets in Canada to meet their needs, in partnership with provincial and territorial marketing boards. The agency implements its national quota order upon the FPCCs approval. It allocates this quota among the provincial and territorial boards. These boards then allot quotas to their registered producers. Egg Farmers of Canada was created in1972. It elects a chairperson each year from its 15member Board of Directors. The Board comprises 11 representatives from the provincial and territorial marketing boards, 3 representatives from the Canadian Poultry and Egg Processors Council and 1 representative from the Consumers Association of Canada.</p> <p>1.2.4</p> <p>Federal-Provincial Agreement (FPA)</p> <p>Along with other legislation, the Federal-Provincial Agreement for Eggs is a partnership designed to foster the smooth operation of supply management in the Canadian egg sector. The Federal-Provincial Agreement was adopted in 1976 following negotiations among the provinces to amend the text of the overall agreement of November 20, 1972. The provincial and the federal government signed the agreement, which sets forth the responsibilities and delegation of powers to the provinces, Egg Farmers of Canada and provincial marketing boards. In 2003, the contracting parties agreed that a new federal-provincial agreement was desirable. However, negotiations to reach a new agreement have since come up against a stumbling block. Progress towards an agreement was slowed by a Court challenges mainly due to Saskatchewans disagreement on the proposed method of allocating the overbase allocation. In 2004, Saskatchewan sought judicial review in Federal Court to have the 2004 quota order quashed and to prohibit Egg Farmers of Canada from using factors other than the Federal Provincial Agreements overbase criteria in future quota allocations. The province also sought judicial review of the 2005 quota order on the same grounds.</p> <p>1.2.5</p> <p>2</p> <p>Export and Import Permits Act</p> <p>In Canada, the Export and Import Controls Bureau of the Department of Foreign Affairs and International Trade is responsible for administering the Export and Import Permits Act(EIPA), which gives authority to the Governor in Council to regulate the import and export of designated products. This is an important piece of legislation for commodities under supply management as it provides import control, one of the three pillars of supply management with production control and price setting abilities. Under the EIPA, the Governor in Council may establish the Import Control List (ICL), the Export Control List(ECL), and the Area Control List (ACL). With regard to agricultural products under supply management such as poultry and egg products, the ICL portions of the Act are the most pertinent. Permits are required for the importation of commodities covered by the ICL. The sections of the ICL that pertain to eggs and egg products are outlined in Schedule A.</p> <p>1.3 International trade agreementsThe international trading system changed drastically in the 1980s and 1990s. The implementation of the Canada-United States Free Trade Agreement (CUSTA), the North American Free Trade Agreement (NAFTA) and the outcome of the Uruguay Round negotiations that led to the creation of the World Trade Organization (WTO) affected not only the global economy but also the Canadian supply management policy. This section provides a brief overview of these important international agreements and some of their implications for supply management.</p> <p>1.3.1 Canada-United States Free Trade Agreement (FTA) and North American Free Trade Agreement (NAFTA)The Canada-United States Free Trade Agreement (FTA) was signed in 1988 and implemented in 1989. Under the FTA all tariffs were to be phased out over a 10-year period, from 1988 to 1998. The objective was to create a Canada-U.S. free trade area so trade between the two countries would be uninhibited by border measures, with the exception of</p> <p>certain commodities such as Canadian dairy and poultry imports of which could be controlled under Article XI of the General Agreement on Tariffs and Trade (GATT). In 1994, the FTA agreement was expanded to include Mexico, which led to the creation of the North American Free Trade Agreement (NAFTA). NAFTA called for immediately eliminating duties on half of all U.S. goods shipped to Mexico and gradually phasing out other tariffs over a period of 14 years. NAFTA did not affect the phasing out of tariffs agreed to under the FTA, and that process was completed on January 1, 1998. NAFTAremoved restrictions on many categories of products, protected intellectual property rights and favoured investment. Supplemental agreements were added later to NAFTA to include provisions regarding workers and the environment. Agriculture has been a controversial topic within NAFTA, as it has been with previous and later agreements. Agriculture is the only section of the agreement that was not negotiated trilaterally. Three separate agreements were signed for agriculture, including two bilateral agreements that Canada negotiated with the U.S. and Mexico to preserve border controls for its supply-managed commodities. In the U.S., tariffs remain in place for certain products such as sugar, dairy, peanuts and cotton. On January 1, 2003, the final tariff reduction between Canada and Mexico was completed, except for certain products, including those under supply management.</p> <p>1.3.2 General Agreement on Tariffs and Trade (GATT), the Uruguay Round and the World Trade Organization (WTO)General Agreement on Tariffs and Trade (GATT) history began in 1948 as part of a larger plan for economic recovery after World War II. The countries highly involved in international trade signed an agreement known as the GATT that was developed through a series of eight trade negotiations or rounds (Geneva 1947 to the Uruguay Round, 1986-1994). The GATTs main purpose was to reduce barriers to international trade while allowing a certain level of flexibility so that countries can adopt special measures for certain sectors of their economies. Early GATT rounds provided special treatment for agriculture that virtually absolved agriculture from most disciplines applied to industrial trade. It was only during the Uruguay Round that agriculture was fully integrated into the international trade system. The Uruguay Round commenced in September 1986 and was finalized in December 1993. The intent of the trade round was to expand the jurisdiction of the GATT to new areas such as services, capital, intellectual property and agriculture. With the Uruguay Round, the World Trade Organization (WTO) came into being on January 1, 1995. Under the terms of the Uruguay Round, quotas on agricultural imports had to be converted into TRQs (tariff equivalents) by July 1, 1995, and tariffs reduced over a 6-year period commencing in 1995 by a minimum rate of 15% per product. Overall, tariffs on agricultural goods, including tariff equivalents, had to be lowered by 36% over the 6 years but by a minimum of 15% per tariff line. To fulfill its obligations under theGATT/WTO agreement, the Canadian government replaced its system of import quotas for products under supply management, such as poultry, eggs and dairy products, with tariff rate quotas (TRQs). It was also agreed by the WTO members t...</p>