Monday, October 7, 2013

IREP Chicken Cheating by the Chicken Mafia

Canada's Chicken Imports viaTariff Rate Quota (TRQ) and
Import to Re-export (IREP)
Canadian chicken processors are addicted to cheating through IREP (Import to Re-export). 

The graph at right shows that from 1995 to 2012, the Tariff Rate Quota (TRQ)  for chicken has increased by 50% in 20 years.

TRQ is the amount of chicken that must be allowed to enter Canada under World Trade Organization (WTO) agreements, or the Free Trade Agreement between USA and Canada.  Generally, TRQ is 7.5% of the previous years' domestic production of chicken.

Most of the TRQ growth occurred from 1995 to 2005, and has been somewhat stable since then.

It's quite a different story for IREP.  Now here is a growth industry for chicken!  From a mere 1,000 metric tonnes in 1995, it has grown to as high as 82,000 metric tonnes in 2008.  That's a growth of 8,200% in 25 years.

IREP is defined as importing foreign chicken into Canada so that it can be processed or value-added operations performed, and then re-exporting that chicken out of Canada to the same or a different foreign country from which it originated.  It used to be mainly imported from USA (69%), but Brazil (29.4% in 2012) has become #1 exporter of chicken into Canada during 2013. The other exporters of chicken into Canada are Thailand, Chile, and Israel.

Chicken Farmers of Canada ("CFC") is supposed to be auditing compliance to IREP rules.  For example, the IREP imported chicken must be re-exported within three months of its import, at least in theory.  What actually happens is a totally different story.

All that CFC will say about this chronic IREP cheating is (see page 20):
"This program continues to be contentious and CFC and CPEPC have worked closely with DFAIT to tighten the rules and controls of the program.  Stricter regulations are anticipated in 2013."
CPEPC is the Canadian Poultry and Egg Processors Council, an industry association representing processors, packagers and distributors of chicken and turkey meat, graders and further processors of eggs, and hatcheries in Canada.  Their 30 chicken processors handle about 90% of the chicken processed in Canada.  See, the Chicken Mafia is everywhere.

DFAIT is the Federal Government's Dept. of Foreign Affairs, Trade, & Development.  DFAIT sets the rules on chicken imports into Canada; but is another lap dog of the Chicken Mafia.

Until the new rules come out, the cheating continues.  The multi-national processors cheat and gain illegal and immoral profits at the expense of Canadians.  Since the CFC and CPEPC are all in the Chicken Mafia, the new rules are sure to be delayed till well past the promised 2013 delivery date.  When it eventually comes out, you can bet that there will be numerous loop holes in the new rules, perhaps even bigger and better loop holes than the current rules, all designed to ensure the screwing of Canadians by the Chicken Mafia will continue as before.  The fox is in charge of the hen house.

So why import this chicken if your are going to just re-export it again?  Why not just use Canadian chicken?

The reason to import is that Canadian chicken is too expensive.  It's all right to force Canadians to buy the high priced Canadian chicken, but an exporter could go bankrupt trying to use the solid gold Canadian chicken.

Note that the world is not clamoring to buy Canadian chicken at any price.  Canadian chicken is OK, but nobody will pay a premium for it, as it's virtually the same as US chicken, and the chicken produced in many other countries; in spite of the arrogant opinions, assumptions, and propaganda of the Canadian Chicken Mafia.

Since chicken from the USA is just as high quality as Canadian chicken, but the US chicken is 1/3 the price of Canadian chicken, you would have to be nuts to use Canadian chicken unless you were forced to do so.  Of course, the Chicken Mafia forces everybody else to buy Canadian chicken, but they're not about to force themselves to do likewise.  Everybody is treated equal by the Chicken Mafia, but they treat themselves more equal than others.  Why does that sound so familiar?

Are there other reasons that IREP is such a booming business?

Of course!  In a previous Blog posting, we discussed the Magical Trucks of Chicken
that disappeared while still in Canada, then ghost images of that Canadian truck full of chicken magically appear across international borders.  We also discussed how "spent chicken" can be exported from a foreign country, but it magically becomes "plump roasting chickens" when they magically appear inside Canada.  Those Chicken Mafia boys are certainly entertaining Canadians with their parlor tricks; great for kids birthday parties too.

If you have a chicken processing plant in Ontario, you might not have enough work to keep your people and machinery fully employed, as there is a shortage of chicken in Ontario.

For example, Quebec and New Brunswick are importing Ontario chicken, and there is insufficient chicken supply left in Ontario to serve the kosher and Hong Kong dressed chicken markets (20.760 million kg. of chicken was imported to Ontario in 2012, but there was 30.753 million kg. of Ontario-grown chicken that was exported out of Ontario to other provinces, for a net loss of 9.993 million kg. of chicken in 2012).

The inter-provincial transfers are a problem, but Ontario is assaulted and insulted on a monthly basis as other Provinces vote against Ontario each quota period at the Board meetings of CFC to deny Ontario more chicken supply.

Negotiations for Differential Growth (ie. a fair sharing of the growing chicken market amongst all of the Chicken Mafia) have been going on for decades with no success.  Alberta is so upset, they gave notice that they will be abandoning CFC and the Federal-Provincial Chicken Agreement as of Dec. 31, 2013.  Alberta wants increased market share as their population increases, but the agreement says it must be divided up based on relative productivity (ie. $ per kg of chicken produced, so those who produce the cheapest chicken get to sell more of it), so that things keep getting better for the consumer.  However, what really occurs is that CFC gives everybody an equal % increase in the growing market, regardless of population increases, or the cost advantage; which is contrary to the rules.

To sum it all up, you can't get it more screwed up if you tried.

How are we going to get this pile of worms untangled so that it serves the greater good of Canadians, rather than serving the greedy hedonistic excesses of the Chicken Mafia?

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