At the invitation of the House of Commons Standing Committee on Agriculture and Agri-Food (AGRI), TFC Chair, Mark Davies, and Executive Director, Phil Boyd, appeared before the Committee on November 22nd  with regard to the group’s study on Growing Forward 2.
 
Witnesses were asked to address the agri-food sector’s policy needs under the “Competitive Enterprises” pillar of the Growing Forward agriculture policy framework. Measures implemented under this pillar are aimed at enhancing farmers’ business skills and strategies, but also at addressing issues that affect the competitiveness of Canadian farmers.
 
TFC’s written submission to the Committee can be seen below. A recorded webcast of the meeting is also available at www.parl.gc.ca.  
 
Growing Forward 2 will take effect on April 1, 2013, the day after the current Growing Forward policy agreement expires.
 
 
 Brief to the House of Commons
Standing Committee on Agriculture and Agri-Food
 
Submitted by
Turkey Farmers of Canada
 
 
November 22, 2011
 
 
introduction
 
Turkey Farmers of Canada (TFC) has represented Canada’s registered turkey farmers for over 35 years. The Agency is entirely funded by levies, remitted by turkey farmers on each kilogram of turkey marketed.
 
Our 11-member Board of Directors is comprised of eight farmer-elected representatives, two appointed primary processing sector members and one appointed member from the further processing sector.
 
The make-up of the Board underscores a basic reality of modern agriculture: without a value-chain approach to indentify and capitalize on market opportunities, the performance of any industry will suffer.
 

OUR MISSION:

To develop and strengthen the Canadian turkey market through an effective supply management system that stimulates growth and profitability for economic stakeholders.

This for us is “Job 1”. We have a uniquley Canadian marketing system, well supported, and well equipped to be foundational for development of competitiveness by individual farms and firms – enterprises. 

our primary objectives (FROM s. 21 OF THE FARM PRODUCTS AGENCIES ACT [FPAA]):

1.       To promote a strong, efficient and competitive production and marketing industry; and,
2.       Have due regard to the interests of producers and consumers of turkey. 

 Industry Statistics

Number of producers:  548
2010 Production: 158 million kg
2010 Exports: 23 million kg
2010 Farm Gate Value: $322 million
2010 Retail Sales: $415.7 million
 
 
TFC’s role in Fostering Competitiveness in the Canadian Turkey Industry
 
Our role as a national organization is to create a platform where individual enterprises, from the farm throughout the value chain, can continue to develop their own competitive edge in the domestic market. In many ways, TFC - with its obligations and responsibilities under the FPAA - is a facilitator for enterprises within the turkey sector, playing a key role in how challenges and opportunities are addressed.
 
In that context, our role in fostering competitiveness in the turkey industry is focused on a number of priorities:
 
1.       On-Farm Food Safety
2.       Flock Care
3.       Disease Surveillance and Compensation
4.       Scientific Research
5.       Market Research
6.       Promotion Activities
7.       Market Segmentation
 
 
1.     On-Farm Food Safety
 
TFC On-Farm Food Safety Program©
 
With support from Agriculture and Agri-Food Canada (AAFC), Turkey Farmers of Canada has developed the TFC On-Farm Food Safety Program© (OFFSP), an auditable national program that incorporates bio-security protocols and detailed on-farm record keeping to reduce and control potential food-safety hazards on-farm. The Program and its Management System have passed technical review by the Canadian Food Inspection Agency (CFIA).
 
By providing proactive management of potential on-farm food safety risks, the TFC OFFSP helps to:
 
·         ensure that Canadian turkey farmers are prepared to meet the requirements of down-stream sectors in the food production and distribution chain;
·         offer increased protection of human health, and ;
·         reduce the risk of a potential animal disease outbreak.
 
As of this month, 86.6% of registered turkey farmers have received on-farm technical assistance or completed “mock audits” for the OFFSP, while 67.5% of all growers are formally certified under the program.
 
Continued funding for the ongoing maintenance and continuous improvement of industry on-farm food safety programs is recommended to ensure that producers can best maintain the safety of Canadian food through risk prevention on the farm.
 

2.     Flock Care

Canadian turkey farmers have long been committed to providing wholesome and safe food to consumers in a way that ensures the humane care and treatment of their birds.
 
TFC Flock Care Program©
 
Turkey Farmers of Canada’s Flock Care Program (FCP) is an auditable national program that provides turkey farmers with measures to ensure the proper handling and care of their birds.
 
Based on the Canadian Recommended Code of Practice for the Safe Care and Handling of Farm Animals: Chickens, Turkeys and Breeders from Hatchery to Processing Plant, as well as other international programs and standards, the FCP requires detailed on-farm record-keeping and documentation, and complements the animal care-related measures covered by the TFC On-Farm Food Safety Program.
 
Poultry Code of Practice Review
 
Following a request from the Turkey Farmers of Canada (TFC), Chicken Farmers of Canada (CFC), Canadian Hatching Egg Producers (CHEP) and Canadian Poultry and Egg Processors Council (CPEPC), the National Farm Animal Care Council (NFACC) has commenced a review and update of the Code of Practice for chickens, turkeys and breeders, which was last revised in 2003.
 
In order to be effective, the Codes of Practice must be reviewed regularly and revised as production and management systems evolve.
 
Revisions to the Codes of Practice are supported by funding received from Agriculture and Agri‐Food Canada’s Agri-Flexibility program. The maintenance of this funding is critically important for the ongoing practical relevance of the Codes.
 

3.     Disease Surveillance and Compensation

Canadian Notifiable Avian Influenza Surveillance System (CanNAISS)
 
Canadian turkey farmers participate in the Canadian Notifiable Avian Influenza Surveillance System, a joint initiative of government, industry, and Canadian farmers to prevent, detect, minimize, and eliminate the presence of notifiable avian influenza in Canada's domestic poultry flocks. The program is a very important component in the management of foreign animal disease.
 
Run by the Canadian Food Inspection Agency (CFIA), CanNAISS was designed to meet current disease guidelines from the World Organisation for Animal Health (OIE) as well as trade requirements from importing countries. 
 
Compensation
 
New compensation maximums, payable to owners of birds ordered destroyed under the authority of the Health of Animals Act, were announced in March 2011. These revised figures better reflect the market values of birds and represent the culmination of extensive consultation between industry stakeholders and government. Good progress has also been made on market value assessments.
 
Adequate compensation is considered a critical component in both effective disease surveillance and pre-emptive cull programs, where the ultimate goal is to contain a disease before it spreads and save all partners – governments, the public and industry – the cost of managing a full disease outbreak.
 
The means for calculating payouts to individuals must be transparent and reflect the market value of the birds at the time of the ordered cull.
 
Compensation maximums must be reviewed on a regular basis by the Canadian Food Inspection Agency (CFIA) to ensure they are fair and will adequately cover legitimate costs in the event of an ordered cull.
 

4.     Scientific Research

Agriculture and the food system have changed rapidly over the past 10 to 15 years, and it is unlikely that the economic and socio-ecominc drivers behind this pace of change will decline.

Poultry industry research is a vital factor for the Canadian turkey sector in terms of productivity, economics, competitiveness, food quality assurance and general societal concerns about poultry farming and food production (ie. environment, bird care, food safety).

In terms of productivity, it takes 30% less feed today to produce the same amount of turkey meat compared to 30 years ago. This is the direct result of improvements along the supply chain, from enhanced feeding programs and formulations, to management practices on-farm.

Through research, Turkey Farmers of Canada seeks to keep pace with ongoing competitive changes in the Canadian marketplace, maintain the expectations of the Canadian consumer through innovation and excellence in turkey production, and provide a high-quality and healthy product to consumers.  

Efficiency Gains in Turkey Production

Innovation in turkey production has led to a number of important efficiency gains and helped to moderate price increases for Canadian turkey.

Technological advances in breeding, feed formulation and management practices have reduced the amount of time that a turkey spends in the barn, which has lowered other production costs such as labour, energy and the capitalized costs of buildings and equipment.

Productivity improvements have also reduced the environmental impact of livestock production.

Improved feed conversions have reduced the amount of land and inputs that are required for crop production and the amount of manure that must be handled. In turn, greenhouse gas emissions, and pressure to convert wilderness to farmland have also been reduced.

TFC Research Strategy

In 2010, the TFC Research Committee conducted an environmental scan to assess the strengths, weaknesses, opportunities and threats presented to turkey research in Canada. Referencing this information, a formal TFC Research Strategy was drafted and approved by the TFC Board of Directors in May 2011.

TFC’s Research Strategy lays out a viable research program specific to the needs of the Canadian turkey industry, from the hatchery to final product, which keeps pace with ongoing changes on-farm and in the marketplace to ensure continued innovation and competitiveness.

The development of the TFC Research Strategy is complimentary to, and partially the result of, work and support from the Canadian Poultry Research Council (CPRC). This national organization, established in 2001 by the five national poultry groups, is devoted to addressing national poultry industry priorities, including:

  • Reducing human health risks from entering the poultry value chain.
  • Continuing to promote the prudent use of antimicrobials and increasing the use of antimicrobial alternatives.
  • Enhancing existing and develop new production systems and strategies to further improve the well being of Canada’s poultry flocks.
  • Developing functional and value-added products which enhance the health and well-being of Canadians and meet niche market demands.
Committee members had the opportunity to hear from CPRC Chair, Jacob Middelkamp, and Executive Director, Bruce Roberts, on November 3rd, in the context of the Committee’s study on Growing Forward 2 (Science and Innovation).
 
Poultry Science Cluster
 
In the fall of 2010, the Federal Government committed to invest up to $1.8 million dollars in poultry industry research through the Canadian Poultry Research Council’s (CPRC) Poultry Science Cluster initiative.
 
The funds allocated by the Government have helped to increase Canada’s capacity for poultry research and assisted turkey farmers in addressing priorities and challenges by promoting innovation and fostering national coordination among scientists.
 
The Cluster involves 20 scientists from four universities, AAFC and Canadian Food Inspection Agency locations, the Vaccine and Infectious Disease Organization (VIDO) in Saskatoon and The National Centre for Foreign Animal Disease (NCFAD) in Winnipeg.
 
Industry needs the support of government programs to achieve the significant societal benefits that poultry research and innovation bring to Canadians. We recommend that Growing Forward 2 commit sufficient funds to poultry research and innovation to maintain and enhance the capacity of the present system. Programs must recognize the structure of the value chain so that all parts, from primary research to application, are sufficiently funded.
 
To be a world leader Canada must have world class research facilities and clearly identified objectives. Industry cannot do it alone - government must be involved financially and in capacity building at an institutional level (e.g. science cluster). 
 
 
5.     Market Research
 
One of the five key elements of Turkey Farmers of Canada’s ongoing Business Plan is to probe opportunities and the development of our sector’s value-chain within the context of the TFC mandate and our role in the industry. By addressing challenges and creating stronger production and marketing relationships, we hope to generate and nurture opportunities at both farm and firm level.
 
TFC Turkey Market Development Committee
 
TFC has identified the need for a Turkey Market Development Committee and is in the process of developing the Terms of Reference for this Committee, which is expected to begin full operation in early 2012. Committee members will include producers, processors, representatives from the Canadian Restaurant & Foodservices Association and the Retail Council of Canada, as well as a Canadian Registered Dietitian and even a Canadian foodie and/or chef.  
 
The Committee will work toward creating opportunities for our farms and firms by encouraging the consumption of turkey, researching the needs and wants of consumers and foodservice outlets, influencing the retail sector to increase turkey representation in-store, and making recommendations to the TFC Board.
 
Turkey Nutrient Value Study
 
In 2008, a comprehensive turkey nutrient value analysis was jointly undertaken by TFC and Health Canada. At that time, the nutrition information for turkey meat on Health Canada’s Canadian Nutrient File (CNF) was primarily out-of-date and sourced from the United States.
 
Following the completion of the laboratory analysis in the fall of 2009, the new turkey nutrient data was posted to the CNF in October 2010. This updated information is representative of the current offerings in the Canadian marketplace, and is frequently referenced by nutritionists, dietitians, Provincial Commodity Boards, Health Canada and industry stakeholders. 
 
Focus group sessions were held in order to gain better understanding of turkey usage, and barriers to use, and also to gain insight into how turkey can best be positioned to communicate a nutrition message to consumers.
 
Marketing and promotion, including access to market information, is not inexpensive. Government expenditures in this area are not considered trade distorting and therefore constitute an area where a transparent and easily accessible program could be enhanced (e.g. matching funds).
 
6.     Promotion Activities
 
The most valuable market for Canadian turkey farmers is the domestic market. Over the last 18 years, the industry has seen the retail market share for further processed products increase from 15% to 22% in volume. More importantly though, in terms of value, sales of further processed products have increased from 33% of sales dollars in 1993 to 56% in 2010.
 
Canadians have repeatedly said that they want Canadian-produced food and that they support Canadian farmers. In many surveys over the years, they say we should produce enough Canadian food to satisfy our needs, that food produced in Canada is a lot or somewhat better than food produced elsewhere, and that they trust Canadian farmers.
 
Domestic Branding
 
Having been involved in the consultative process with staff from Agriculture and Agri-Food Canada, the Turkey Farmers of Canada have long been aware of the Canada Branding initiative which aims to clearly define Canada as a brand, and highlight the benefits and attributes inherent with products of the Canadian agriculture industry.
 
As of this month, our Agency has received approval to use the Canada Brand identification in web and email communications to generically promote Canadian turkey and the Canadian turkey industry. The Canada branding identification is now in place in our email signatures and on TFC’s bilingual website, which targets Canadian consumers.
 
The application process for this was well-ordered and efficient. 
 
Part III Agency
 
Promotion programs or generic marketing initiatives provide the industry at large with the means to inform consumers about the benefits of turkey meat consumption (e.g. health benefits, nutrition information, taste, quality and other intrinsic characteristics). These programs are paid for by farmers through levies or “check-offs” on their production.
 
Part 3 of the Farm Products Agencies Act (FPAA) allows for the establishment of promotion and research agencies, under which national research and promotion programs can be developed and funded.
 
In 2002, Canada established the first such agency – the Canadian Beef Cattle Research Market Development and Promotion Agency. This could be of benefit to the turkey industry as well, as like cattle, it would allow for the extension of the levy paid by Canadian farmers to include imported products. Such a levy on imports would represent a new revenue stream and ensure imports contribute their fair share to such generic activities. TFC is currently pursuing this matter with the Farm Products Council of Canada.
 
TFC, which is a Part 2 Agency under the Farm Products Agencies Act, will be pursuing the authority to apply a check-off to imports, but without having to create a separate governance and administrative structure. A favourable interpretation from the Department of Agriculture and the Farm Products Council of Canada (FPCC) that a Part 3 agency can be incorporated into a Part 2 agency is required in this regard.
 
 
7.     Market Segmentation
 
Market segmentation is an economic concept that in simplest terms means developing a commercial advantage through product differentiation. If done correctly, market segmentation and product differentiation allows the industry to divide end users into groups so that supply and demand and the price relationship of both are in equilibrium.
 
TFC allocates several classes of quota that are end-use based. The Agency’s Primary and Multiplier breeder quotas are established to cover the marketing of mature turkey meat domestically, but the intent is to ensure that these two segments of the industry, which have a significant export dimension for breeding stock (e.g. eggs and poults), which are not import controlled, can expand or contract in correlation with the international market.
 
On the domestic side, the Agency allocates quota for whole turkeys which are primarily marketed and consumed during the festive seasons (e.g. Thanksgiving, Christmas and Easter), and are fairly stable markets. The further processing segment, which encompasses raw cut-up parts, deli meats, roasts, niche products, etc., is allocated based on individual processor requests. This market driven approach to allocation is required to service what is seen as the highest value market segment of the industry and that holds the most promise for growth in the coming years.
 
 
Conclusion
 
As Committee members are well aware, the next decade will bring challenges, but also opportunities for the Canadian agriculture and agri-food industry. 
 
As consumers’ tastes change and the demand for more specialty products grows, market segmentation and product differentiation provide opportunities to maximize sales if we can outrace our competitors to deliver these products to the market place. This means having timely information on consumer trends. This brings us full circle to the concepts of value-chain, market research, promotion, food safety, animal care and scientific research addressed elsewhere in this presentation and the role of government in those areas.