by KRISTIAN PARTINGTON
A recent study of the performance of value chains suggests difference in attitude within various aspects of the agriculture value chain can impede success, said Martin Gooch, director of the Value Chain Management Centre at the George Morris Centre in Guelph.
Last week, the centre released a case study examining the performance of value chains within Canada's veal industry. A major focus centred on the system in Quebec versus Ontario and Gooch said the findings were striking. Despite a $30 million investment in income stabilization in Quebec, for example, researchers found that Quebec's value chain, at least in the veal industry, performs quite poorly when compared to Ontario's.
“We never expected that finding,” said Gooch. “So we went into analyzing the chain looking to identify how it could improve by first looking at what consumers are after, then using that as the framework for how we analyzed the chain's performance.”
Different levels of the chain, from producers to processors and retailers, aren't cooperating effectively in their quest to attract the attention of consumers, he said. When one level of the chain is subsidized, some businesses in that level will choose to do the bare minimum in order to get by. The performance of the entire chain is adversely affected as a result, he said.
“It goes back to attitude,” he said. There are producers in Quebec who are making good money. “There's also, obviously, producers in Quebec who are sitting back and they are allowing the system to subsidize them for doing a poor job.”
If support systems and legislation aren't more carefully thought out in all jurisdictions, said Gooch, then it creates an environment where “the people that have the most motivation, ability and desire to succeed are limited in the benefits that they could accrue by the people we are subsidizing.”
Every part of the chain must work towards the most efficient and effective delivery of a final product that meets the needs and desires of the consumer, he said.
“Every farmer is the CEO of their business and they need to think like a CEO,” said Gooch. He suggests as one recommendation that public funds be used to educate various players in the agriculture value chain instead of leaning entirely upon subsidies. BF
Comments
This should be a warning to all those that want a guaranteed cost of production. Yea it's great to be guaranteed that profit, but at what cost to the competiveness of that particular industry? Unless you have huge tariff walls like SM, then why would the GM Center be surprised at what they found out? What does this say about the competiveness of SM. Oh yes....I already answered that question, with a tariff wall you don't need to be competitive.
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