Skip to main content

MEI

DonateDonateFacebookTwitterLinkedIn
MEI in the Media

Op-eds

3 April 2018April 3, 2018

Maple Syrup Production: Quebec Is Losing Ground

www.iedm.org, p. web

Maple Syrup Production: Quebec Is Losing Ground

Op-ed published exclusively on our website.

Sadly, the current sugar shack season is almost over already. But like many other past seasons, 2018 had its share of controversies, with stories about seizures of syrup from producers making headlines in Quebec. The rules that apply to the province’s maple syrup producers are very restrictive, which result, notably, in stimulating the growth of their competitors in neighbouring provinces and U.S. states.

In Quebec, the marketing of maple syrup is highly controlled. It is the Quebec Federation of Maple Syrup Producers (or FPAQ, its French acronym) that determines marketing and production conditions. In other words, you may own your land, but what comes out of the trees on that land is not entirely yours, but also in a sense the property of the federation.

The FPAQ is the exclusive sales agent for bulk sales, which represent 85% of annual maple syrup production. Producers must therefore go through the Federation or through a few authorized vendors to sell their product in containers of more than five litres, usually in barrels.

This Federation also sets prices for bulk sales, and producers are paid in full only when a full year of production has been sold. The last time a harvest was completely sold was back in 2009, which means that subsequent deliveries have still not been paid in full.

Moreover, since 2004, maple syrup producers must also abide by a quota system that allocates a certain level of production to each of them, which limits entrepreneurship and innovation even more. Maple syrup producers who opt to sell through an intermediary like a grocery store or a restaurant (around 5% of production) must also respect their quotas, regardless of the demand for their products, even if this means turning clients away. Only direct sales to consumers are exempt from these constraints, as long as containers do not exceed five litres.

Unsurprisingly, several producers look to sell their syrup without going through the FPAQ in order to be paid immediately and in full, but also to avoid fees, penalties, and production constraints. Those who are caught breaking the rules are subject to searches, seizures, and penalties of up to several hundreds of thousands of dollars.

A System That Helps Competitors

As calculated by my colleague Alexandre Moreau in his recent publication, based on official sources, since the introduction of production quotas in 2004, the number of maple trees harvested in Quebec has increased by only 17%, while it has almost doubled (+89%) in the United States. Quebec actually experienced the slowest growth in total maple syrup production in all of North America during this period. The two American states with the most production, Vermont and New York, experienced three or four times the growth that Quebec did.

This strong growth enjoyed by our neighbours had a sizable impact on Quebec’s share of global production. This share, which had increased constantly since the mid-1970s, began to fall at precisely the moment when production quotas were put in place, in 2004. It has thus gone from a peak of 82% in 2003 down to 72% in 2017. If we continue with the same model, this trend will not change.

While the Quebec Federation of Maple Syrup Producers comes down hard on producers that try to get free of its grip, and discourages others from producing more, those that are located outside the province of Quebec take advantage of price stability and an open market to take market share away from Quebec producers. As my colleague Mr. Moreau wrote, it’s time to give Quebec producers back their freedom to produce and sell their maple syrup without having to submit to the federation’s dictates. Otherwise, their share of the global market will likely continue to fall.

Jasmin Guénette is Vice President of Operations at the Montreal Economic Institute. The views reflected in this op-ed are his own.

____________________
Read more articles on the themes of Agriculture and Regulations.


EMAIL FACEBOOK TWITTER LINKEDIN

910 Peel Street, Suite 600
Montreal (Quebec) H3C 2H8
Canada


Telephone: 514-273-0969
E-mail: commentaires@iedm.org

to the top of the page

© IEDM 2019