Maple syrup: Quebec night to its producers and encourages its competitors

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Alexandre Moreau

Friday, 9 march 2018 15:30

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Friday, 9 march 2018 15:30

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Each new season of the sugars brings a lot of controversies, as the stories of seizures of syrup producers make headlines. The rules that apply to individual maple producers of Quebec are very binding for these, in addition to stimulating the growth of competitors in neighbouring provinces and States.

The influence of the FPAQ

In Quebec, the marketing of maple syrup is highly regulated. It is the Federation of Quebec maple syrup producers (FPAQ), which decides the conditions of marketing and production, and it has the power to oblige producers to comply.

The FPAQ is the sales agent exclusively for the sale in bulk, which represents 85% of the annual production of maple syrup. Producers must, therefore, pass by the Federation or by a few vendors allowed to sell their production in containers larger than five litres, most of the time in barrels.

It also fixed the price for the bulk sale, and the producers are paid pro rata of the annual production sold. The last harvest completely sold dates back to 2009, so that the subsequent deliveries have not been paid in full. Fee-to-market of 5 % are deducted from the amount paid to the producers.

In addition, since 2004, the maple producers must submit to a quota system which assigns to each a quota of production. It is possible to produce more, but these additional volumes will be paid only if the producer will harvest less than the quota, and always according to the percentage of the annual sales. Excess production could take years to be paid.

The maple producers who opt to sell through an intermediary such as a grocery store or a restaurant (about 5 % of production) also need to meet their quota of production, regardless of demand for their products, even to refuse customers and to accumulate surpluses. Only the direct sale to consumers is allowed without these constraints, provided that the container does not exceed five litres.

Not surprisingly, many maple producers looking to sell their syrup without passing by the FPAQ, to be paid immediately and in full, but also to avoid the fees, penalties and constraints of production. Those who are caught are subject to searches, seizures and penalties that can reach several hundreds of thousands of dollars.

A system that gives an advantage to the competitors of the Quebec

Since the introduction of production quotas in 2004, the number of taps operating in Quebec increased by only 17 %, while it approximately doubled (+89 %) in the United States. Quebec has in fact experienced the lowest growth of the total production of maple syrup in North America during this same period. The two States in the u.s. the most important in terms of production, that is the Vermont and New York, have experienced a growth of three to four times higher than that of Québec.

This strong growth in our neighbouring countries has had a significant impact on the share of global production held by the government of Quebec. This share increased constantly since the mid-1970s, began to decline precisely at the time of the establishment of production quotas, in 2004. It went from a peak of 82 % in 2003 to 72 % in 2017.

Besides, even if québec’s exports have strongly increased in the last fifteen years, from 176 to 362 million $, import quebec maple syrup, they have reached $ 20 million in 2016, nearly all from the United States. The american producers have doubled their exports thanks to the quebec market since the introduction of the quota system.

While the FPAQ picking on the producers who are trying to break free of his grip and that it discourages others to produce more, those who are located outside of the province benefit from price stability and a free market to steal market share to producers in quebec. It is imperative to give back to the quebec farmers ‘ freedom to produce and sell their maple syrup without having to submit to the dictates of the FPAQ. Otherwise, their share of the world market will probably continue to decrease.