called for an end to the quota system. Quebec’s Agricul- tural Minister Pierre Paradis stated in a reported earlier this year the government-sanctioned cartel stabilized prices through quotas. However the report noted the system imposed on tappers a “heavy, inflexible handicap to the province’s performance.” This sense of injustice forced some farmers to sell their product on the black market. In 2012 a theft of nearly 6 million pounds worth $18 million was discovered missing from the maple syrup strategic reserve warehouse in Quebec. The theft was blamed on frustrated produc- ers missing out on sales. In his report Paradis said some farmers acknowledged feeling harassed by the Federation. After a formal request from producers last year to the province’s agricultural marketing board, decision was made to let the cartel increase quotas as it deems neces- sary. Simon Trepanier, Executive Director of the Federa- tion of Quebec Maple Syrup Producers, said the quota increase makes the system more flexible and should limit black market sales. Trepanier added “if we allow produc- ers to add more taps and sell inside here, they will not be interested in selling on the black market.” The Federation emerged as the main sales outlet for maple-syrup in 2002. They meet annually to set bulk prices. When syrup goes unsold it is sent to the strategic reserve in Laurierville, Quebec which is the scene of the large theft in 2012. A lot of growers have been unhappy with the program over the years but a majority continue to support the cartel.
the production quotas may not work the way farmers think. Dempsey feels that if the Federation does not focus on looking for additional new marketing for their product that the additional syrup will end up in the strategic reserve. Other producers feel the same way as Dempsey, stated that finding new markets, although difficult, is essential to the Federation and the industry. Dempsey added “with the increased production of New York, Vermont, New Hampshire, and Maine, they’re going to be buying less and less, and if we can find dif- ferent markets in different countries it’s a frustration. I think most people would rather have the money than the inventory.”
Jim Dempsey is a smaller producer from Inverness, Quebec who says he is concerned that loosening
Industry experts say that demand for the sweet and tasty syrup used both naturally and in many other products will soon correct any problems that over production will have on price. Supply and Demand is a simple theory, if you supply more that what the market demands, you will have to find ways increase demand, if not one of two things happen, either you decrease price or production.
37
SEPTEMBER 2016 • SPOTLIGHT ON BUSINESS
Made with FlippingBook - Online magazine maker