Agricultural Marketing Board

Agricultural Marketing Board

An Agricultural Marketing Board is a statutory body which acts as a compulsory marketing agent, performing or controlling one or more of the functions of marketing on behalf of producers of specific agricultural commodities. Boards may be established and operated under either provincial or federal governments legislation, depending on whether the products they market or regulate are produced and sold within a province (intraprovincially) or are sold interprovincially or to export markets. Some boards are subject to the jurisdiction of both levels of government. There are currently more than 80 agricultural marketing boards in Canada. Marketing boards operate in every province and regulate a wide variety of agricultural products.

The first boards developed from farmers' efforts to gain market power through joint action and as a reaction to unstable farm prices and incomes. Early efforts to organize co-operative agricultural marketing ventures grew into attempts by some producers' groups to achieve compulsory, centralized marketing through boards. Disruption of marketing channels during and after the First World War led to centralized grain handling and marketing by temporary government agencies from 1917 to 1920. However, the first Canadian producer-controlled agricultural marketing boards were introduced in BC in the late 1920s.

In 1931 the Supreme Court of Canada found that the legislation under which these early producer marketing boards were established infringed upon the authority of the federal government in interprovincial trade, and that the boards constituted an indirect tax. Pressure for national legislation permitting establishment of marketing boards increased as farm prices and incomes fell during the Great Depression of the 1930s. Initially, federal legislation for this purpose was passed in 1934, but was also found to be unconstitutional because it interfered with the authority of the provinces in intraprovincial trade. Subsequent provincial and federal legislation recognized the respective jurisdictions of the two levels of government.

Provincial Marketing Acts

Provincial marketing acts generally establish supervisory boards or councils which develop provincial commodity marketing plans and oversee the introduction and operation of boards and commissions which administer these plans. Directors of marketing councils are government appointed, but board directors are commonly elected by producers. Commodity marketing plans are implemented following a favourable vote by producers. Under the Agricultural Products Marketing Act of 1949 the federal government can authorize boards established under provincial marketing Acts to regulate interprovincial and export sales.

Conflicts arising from efforts by some provincial supply-management boards to control inflows of products from other provinces contributed to passage of the Farm Products Marketing Agencies Act in 1972. This Act provided for the establishment of the supervisory National Farm Products Marketing Council (now called the National Farm Products Council), for the development of national or regional marketing plans, and establishment and operation of national marketing agencies or boards. By 1986 national agencies for eggs, turkeys, broiler hatching eggs were operating supply-management plans in conjunction with the provincial boards for these commodities. National agricultural marketing institutions acting under separate legislation include the Canadian Wheat Board (CWB), a marketing agency for major prairie grains which has been in operation since 1935, and the Canadian Dairy Commission, established in 1966, which, together with provincial milk boards, administers the national dairy supply-management program for milk.

There is much variation in the legislatively-sanctioned powers held and exercised by different boards and the activities they undertake. The major objectives of marketing boards are to enhance producers' prices and incomes, while reducing price variability. Some boards are also concerned that access to market opportunities be shared equitably among producers. Boards are empowered to enforce compliance with the marketing regulations they administer and may have power to license processors and handlers of the product they regulate.

Boards usually have powers to conduct or sponsor research, information or product promotion activities, and most are empowered to purchase and sell the product they regulate. Some are specified as the sole buyer from producers and the sole seller on their behalf. For example, the CWB is the sole seller for domestic human consumption and in export markets of prairie wheat and barley (these activities for barley have been debated).Some boards manage the sales systems for the product they regulate (some hog/pork boards), and may pool producer prices or market return by grade of product (CWB, some hog/pork boards and some vegetable boards). Some boards have the power to schedule producers' deliveries to the marketing system through delivery quotas or contracts. The CWB has performed this activity. Some marketing boards negotiate prices and other terms of sale with processors or handlers (some of the boards for vegetable and fruits).

The strongest marketing powers held by boards are those to determine prices, when enforced by the power to apply supply-controlling quotas. These limit entry of new producers and restrict the amount of the product produced or marketed. The use of these pricing- and supply-control mechanisms by provincial and national boards, backed up by tariff-rate import quotas for poultry and dairy products, has been criticised. Advocates note that these programs have reduced variability in farm prices and increased producers' incomes; critics say the programs have contributed to increased food prices, high quota values, and economic inefficiencies in production and marketing. Boards which do not possess or exercise supply-control powers have created less controversy.