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BRITISH COLUMBIA MARKETING BOARD ANNUAL REPORT 1981 British Columbia. Legislative Assembly 1983

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 THE BRITISH COLUMBIA
MARKETING BOARD
ANNUAL REPORT
1981
 British Columbia Cataloguing in Publication Data
British Columbia Marketing Board.
Annual report. — 1976-
Issued 'by: 1976-1979» Ministry of Agriculture;
1980-   , Ministry of Agriculture and Food.
ISSN 0702-0821 = Annual report - British Columbia
Marketing Board
1. British Columbia Marketing Board - Periodicals.
2. Food industry and trade - British Columbia -
Periodicals.  I. British Columbia. Ministry of
Agriculture.  II. British Columbia. Ministry of
Agriculture and Food.
HD901U.C33B76        35it.711'0082'33
 I—
To the Honourable
Henry P. Bell-Irving,
D.S.O.,O.B.E.,E.D.,
Lieutenant Governor of the Province
of British Columbia
May it please Your Honour:
I have the honour to submit for your consideration the Annual Report of the British
Columbia Marketing Board for the year
1981.
CH/iRLES E. EMERY
Chairman
  1981 ANNUAL REPORT
BRITISH COLUMBIA MARKETING BOARD
r The British Columbia Marketing Board
Lmmenced 1981 with C. E. Emery,
llairman, Mrs. E. M. Brun, N. C. Taylor
id M. Hunter as members continuing to
•;rve their appointed term. Mr. Robert
reynolds of Delta, B.C. was appointed for
I term of three years replacing A. E.
Iflesbrecht.
For the Provincial Board, 1981 was a
jery active year in which an above average
lumber of appeals were heard. It was also
Iwear which required considerably more
jnpervisory involvement on matters related
) federal-provincial responsibilities in
dministering the National Egg and
bultry Plans.
In early February, the Board heard the
lirst of several appeals by chicken growers
IBnatters related to the quota policy of
ie British Columbia Chicken Marketing
loard. In this case, the producer argued
lat the B.C. Chicken Marketing Board
i ad a responsibility to advise him of an
upending change in quota regulations
uring a time in which he was purchasing
[Broiler production unit. Since the
ppellant had only an agreement for sale
nd was neither the owner of the farm nor
registered grower at the designated time
\w issuance of increased secondary quota,
e was considered ineligible by the
roicken Marketing Board and did not
eceive additional quota.
The Board's decision on this appeal was
hat it should fail on the grounds that the
ppellant was not, on the date of the quota
egulation, either the owner of the farm or
registered grower and that the respondent
lid not owe a duty to the appellant to
inform him of the impending regulation.
■The administering of B.C. Chicken
Krketing Board quota policy was
ippealed by a roaster grower who alleged
hat he was not fairly treated as the result
of the Chicken Marketing Board
implementing the recommendations of the
British Columbia Broiler Enquiry
Committee. This committee had identified
discrepancies in the allotment of quota,
and consequent profits, to the roaster
growers when Compared to former roaster
growers that were converted to broiler
quota in the past. As a result the
committee strongly supported the concept
that the roaster industry be maintained and
that the Chicken Marketing Board, as soon
as the marketplace permits, establish
parity by issuing additional quota, based
on annual poundage, to all roaster growers
who were registered growers on or before
September 1, 1978.
The Board examined all aspects of the
appeal, in particular the recommendations
of the enquiry committee, and concluded
that since the appellant was not a
registered grower on September 1, 1978,
as called for in the regulation, he did not
qualify for additional roaster quota and the
appeal was denied.
The pricing mechanisms used for farm-
gate pricing of eggs in Canada has
received considerable attention by many
sectors over the years. In early spring, the
Board met with a consultant hired by the
National Farm Products Marketing Council
and discussed potential areas of
improvement in the national egg-pricing
system. The marketplace, the processor,
the producer and the supervisory agencies
impose many constraints on a revision of
the national egg-pricing system. Success
in refining the pricing system will require
input and compromise by all parties
concerned.
The Board, through an appeal launched
by a turkey grower, was required to
determine if the minimum quota level set
by the British Columbia Turkey Marketing
 Board was appropriate. In this appeal, a
turkey producer had applied to transfer
136,500 pounds of turkey quota to a
farmer who held no turkey quota and was
denied the transfer by the Turkey
Marketing Board. In his argument the
appellant indicated that the transferee of
the quota in question was a viable
economic unit to which the turkey quota
could be transferred and that it would be
operating on the same location as an
existing farming enterprise. The producer
also argued that the operation was of a size
that could be added to, as conditions
permitted, and could eventually become a
fully-fledged turkey farm which would
allow the son an opportunity to become
established as a farmer. The Board
determined that the appeal should be
allowed and the quota should be
transferred. In its judgment the Board
found the transferee to be a viable
economic unit.
The British Columbia Turkey Marketing
Board decided to appeal this decision of
the Board, arguing that it had erred in
allowing the transfer of quota. Since the
regular members of the Board had heard
the original appeal, W. Wood, F. Beeson
and D. Shroeter were appointed as
members to hear the appeal of the Board's
decision. The appellant argued that the
Board had erred in allowing the transfer of
quota since the Turkey Marketing Board
general orders require quota only to be
transferred with the sale of the turkey
production unit. The Turkey Marketing
Board also argued that the breaking of
quota into smaller production units would
not encourage economies of scale and may
result in many part-time turkey producers.
It also claimed that the authority of the
Turkey Board on quota matters was
undermined by the Provincial Board
decision.
The British Columbia Turkey Marketing
Board appeal failed and the decision of the
Board dated April 22, 1981, in which it
instnicted the Turkey Marketing Board to
accommodate the transfer, was upheld. In
reaching this decision, the Board found th.
respondent to be proposing a reasonablH
course of action and that he stood a verjjl
good chance of strengthening the farming
unit and making it into a viable
agricultural operation.
The Board found, with respect to the
grounds for appeal, that although the
transferee must also be the owner of thel:
production unit, the appellant had made ,,
exceptions to the order in more than one.
instance. On appeal, the Board has power
to confer or vary any order, decision, or
determination of the Turkey Marketing 1
Board. With regard to the economies of
scale needed to operate a viable economic
unit, the Board was of the opinion that
efficient and competitive turkey production
is possible over a wide range of operatiflB
scales and conditions. The Board found
the appellant's policy regarding quota   j
allocation to production units was far too,'
restrictive. Finally, the Board has been I
delegated the authority to supervise the j
Turkey Marketing Board on quota matteS
and has the power to overrule the Turk&jjj
Marketing Board decisions.
The B.C. Chicken Marketing Board!
quota regulations implemented in response
to recommendations made by the British
Columbia Broiler Enquiry Committee   ;
served as the basis for two additional
producer appeals.
In the first appeal, the producer
contended that he and others were growing
roasters under permit at the effective date
of the regulation and therefore were being
discriminated against by not being granted
additional quota as were the registered 1
growers. He also claimed the order should
have become effective on the date it was
issued and not made retroactive to a date
some 20 months prior to its issuance. The
appellant argued such a thing had not been
done before and created a dangerous
precedent.
The Chicken Marketing Board argueH
that the appeal was against a regulation™
 I
ffch was properly enacted and which had
ime about as a result of a
| commendation of an enquiry committee
Inch had been set up to attempt to solve
ll id compensate for inequities which
■ffiurred in the industry in the past. While
Bffiitting that it was the first time it had
lade a regulation retroactive, the
I spondent stated it had no alternative but
■feet September 1, 1978 as the effective
L ite. That was the last date upon which a
lajor quota regulation was passed and was
pso the date recommended by the enquiry
Immittee, which had the support of a
p rge majority of producers in the industry.
f The Board concluded that since the
Reliant was not a registered grower on
e date called for in the regulation, he did
)t qualify for additional roaster quota and
§ appeal failed. In coming to this
jxision the Board acknowledged the
Importance of consistency and adhering to
jites of qualification related to quota
bsuance.
] In the second appeal of Chicken
I ISrketing Board quota regulations, the
I Ijpducer argued that he should qualify for
iditional roaster quota as he was a
■gistered roaster grower on the qualifying
ite contained in the regulation. The
oard determined that the terms of
[Klification, namely being a registered
naster grower both on or before the
salification date and on the date of
|isuance of the quota regulation, were
ffisistent with the recommendations of
Benquiry committee. The appeal failed.
The B.C. Poultry Processors'
Iffiociation appealed the B.C. Chicken
flarketing Board's pricing order increasing
:ie producer price for chicken early in
Irani. The processors were concerned that
live prices were allowed to rise beyond
Iffionable levels, chicken imports from
ther provinces and increased competition
om red meats would cause chicken
IJEentories to build at the processors'
gnts. The processors urged the Chicken
e larketing Board to carefully consider
i larket conditions when increasing the
price, and it stressed the importance of
good communications between processors
and the Chicken Marketing Board, if the
needs of the marketplace are to be met.
The Chicken Marketing Board, as
respondent, presented a comprehensive
brief including pricing criteria for the B.C.
chicken market, price levels in other
provinces and their relationship to the
B.C. chicken price, and a statement of
their intent to keep the frozen chicken
inventories in British Columbia to
manageable limits. Specifics of the
Federal-Provincial Agreement with respect
to the establishment of a comprehensive
chicken marketing program in Canada
with emphasis on cost-of-production
calculations and provincial chicken pricing
were also presented.
The Board decided that the price
increase issued by the Chicken Board
should be allowed to stand. The Board
stated, however, that it deplored the lack of
communication and consultation between
the Chicken Board and processors prior to
the issuance of the pricing order. It stated
that the Chicken Board must become more
sensitive to the position of the processors
and retailers in setting the price.
Subsequent to this appeal, the B.C.
Chicken Marketing Board and the B.C.
Poultry Processors' Association took steps
to improve communication which resulted
in an industry approach to meet the needs
of the marketplace.
The Western Food Processors'
Association appealed specific sections of
the B.C. Vegetable Marketing
Commission order which set the procedure
for setting prices of regulated products for
processing or manufacture. In its
argument, the appellant placed emphasis
on the need to maintain a relationship that
would permit both the processing industry
and the growers to obtain a share of the
market. It also emphasized the need to
have negotiations on an equal and fan-
footing with both parties. The appellant
further stated that the newly-instituted
price-setting procedure would upset the
 negotiating balance and may result in the
commission setting terms and prices in
isolation from the marketplace. The
position of the processors was that
arbitration is an essential part of price-
setting and the Board should disallow the
Vegetable Marketing Commission's order
enacting a new pricing system.
The Vegetable Commission argued the
negotiating system was breaking down and
that in an effort to streamline the
negotiating process it instituted a new
procedure. The order being appealed
included a mediation process which only
considered outstanding issues if
negotiation was unable to reach a
unanimous agreement. The Commission
also argued that the new system provided
continuity in the price-setting process, a
shortcoming under the old system. It said
that upon reviewing the summary of the
mediator the Commission would set the
price.
After assessing all the evidence
presented and closely reviewing the
negotiating process, the Board determined
that the appeal should fail and the order
was upheld. In making this decision, the
Board determined the Commission had
been delegated the power to fix prices at
which the regulated product may be
bought and sold in the province. In
addition, the Board ordered the
Commission to amend its order under
appeal to include provision for the
communication of the mediator's report
and recommendations to both parties at the
time he reports to the Commission. In
making their judgment, the Board
recognized the considerable effort the
appellant and the respondent put forth to
develop a price-setting mechanism
responsive to the marketplace and one
which also affords ample opportunity for
dialogue.
Throughout the year, the Board devoted.
considerable time to supervisory
responsibilities related to three national
marketing plans. The increasing demand. I
for poultry and eggs in British Columbia
resulting from increased population andM
increased per capita consumption created
problems with the existing rigid quota 1
policies established for national agenciS
The Board supported the position of the
four western provincial egg marketing I
boards in their request for a quota
allocation system which would recognizW
the increased demand and sales in the I
west. Support for increased egg producm!
in British Columbia was based on the 1
principle of comparative advantage on a
sound commercial basis which would I
acknowledge the rapidly increasing costffl
transporting products from other areas of
Canada.
During the year, the supervisory
responsibilities of the Board were called
upon to assist in resolving minor confliW
and to provide an industry-wide point of
view for approaching agricultural
marketing problems. In this regard, the
Board met with individual producers, ]
producer associations, marketing boards
and commissions, industry consultants^
processors, financial institutions and   1
retailers to ensure that the needs of thel
total food system receive proper
consideration. Board members believeoH
the improved dialogue and communica^ffl
established during 1981 will provide a 1
solid base on which the agricultural
community can grow in the future.
Throughout the year, the Board
members strove to carry out their duties in
a fair and equitable manner as well as to
set a positive tone for the orderly
development of the food industry during '
difficult economic times.

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