Co-operator Germany April 2018

4242 COOPERATOR.COOP – APRIL 2018 PHOTO : NICOLAS MESLY 4242 COOPERATOR.COOP – APRIL 2018 The Comprehensive Economic and Trade Agreement (CETA) between Canada and the European Union, in force since 21 Sep - September 2017, allows the export of 75 000 metric tonnes (tm) of pork meat to the European Union. But the Old Continent is already self-sufficient at 115 %. And Canadian exports invite at the time the towel burns between France and Germany. French producers do not jump off with joy at the idea of seeing 75 000 tm of Canadian pork meat landed in Europe.

A sentiment expressed by Philippe Bizien, president of the Regional Porcine Committee of Brittany, and Jacques Crolais, director of the Union des groupes de producteurs de caréde de Bretagne, met last September at the press room of the international exhibition SPACE in Rennes (France). It is that the European market for pork meat is saturated. And Brittany, epicentre of French production with its 6500 breeders and 14 million pigs produced per year, has difficulty remaining in the water. "We will not wage war for 75,000 mt: this is barely 3% of the market", tempère Guillaume Roué, president of the International Meat Office and president of the cooperative Prestor pig breeders.

NICOLAS TEXT MESLY L-EUROPE DOES NOT SURE THE CANADIAN PORC'S ARRIVAL Do Canadian pork have a chance to penetrate the European fortress? However, the latter adds a shade: "If it is 75 000 tonnes of jam - good, it will disrupt the European ham market, and especially France, a major consumer."The expert argues that an agreement will have to be reached between the commercial players of CETA to balance exports of carcasses, so as not to bet just on ham. SOCIAL DUMPING If in the Hexagon many minds are on the wrong side, it is that French producers consider that they are facing unfair competition within Europe, especially from Germany, which has become the continent's swine superpower (with Spain, recently).

Germany would have built its empire exponentially, especially from the 2000s, thanks to the "relocation" labour force, i.e. imported from Romania or Poland and paid for the wage that is going on in the country of origin. A phenomenon called "social dumping." "The efficiency of German slaughterhouses rests on access to labour from the countries of the East, paid two to three times less than in France," believes Jacques Crolais. The hourly wage of a worker in a French slaughterhouse is d'envi - ron 15 euros (22.50 CAD), including the RED GUILLAUM The access of Canadian pork to the European market will be a battle of cuts, the ham of which will be excluded, believes Guillaume Roué, president of the International Meat Office.

The wage gap between Cooperl Arc Atlantic, the largest producer of French pigs, and German slaughterhouses is 30 million euros (C$45 million) per year, he says. "We have made two complaints to the European Commission since 2011 to have a directive on detached labour adopted. We are pleased - let us mention that our president, Emmanuel Macron, took this file with his body," adds the director general of the union Culture meat, Mathieu Pecqueur, who represents the Collective Against Social Dumping in Europe.

According to him, the French president raised several times the issue of equal pay for equal work in a given place with the German Chancellor Angela Merkel. Despite the difficult re-election of the leader last September, the process has borne fruit in part, "pending our competitors find other schemes". GERMAN RESPONSE "It is true that we have already employed labour relocated in the past, but this is no longer the case", reply in interview André Vielstädte, head of public relations at Tönnies, met at the company's ultramodern head office in Rheda, Germany.

On this site, the German pig industry's goliath has killed seven million pigs a year, almost the equivalent of all Quebec production. It has more than 1000 cuts per carcass, passed on the German market first, then European, then Chinese. Some 6,500 employees run this highly mechanized slaughterhouse, out of the company's 12,000 workers. A real United Nations headquarters, where 82 different nationalities are associated.

According to André Vielstädte, German slaughterhouses offered a minimum wage to all their employees, including posted workers, from 2013. This was formalized in 2015 at €8.50 per hour (CAD $12.75) by the government of "Mutti", a nickname affectionately given to Chancellor Angela Merkel, which means "mom". This salary has just been increased to €9 per hour (CAD $13.50) in 2017. As for CETA, "we welcome open-arm competition," says Jacqueline Nowack, Export Director at Tönnies.

Germany imports industrial meat (of convenience) and specific meat."In her view, to break through this market, Canadian exporters will have to be imaginative. It states that even if German pork is more expensive, Germans are proud of their schnitzel (pork scallop), as well as Leica cameras or Mercedes-Benz cars. AGRICULTURAL AFFAIRS ABATTOIR TÖNNIES COUPLE LINE The use of detached labour would largely explain how Germany became the European pig superpower.

Over the past 25 years, Tönnies has invested €650 million (CAD $970 million) on its headquarters in Rheda. L-company has killed 20% of pigs produced in Germany. Four percent of its production is organic pork, making it the biggest player in this niche. RATES D-APPROVISION IN PORCINE MEAT IN THE WORLD (% IN 2016) (Source: USDA, Eurostat, customs and national sources) CANADA 223% BRAZIL 129 % USA 119 % EU 115 % BIELORUSIA VIET-NAM 101 % RUSSIA 90 %UKRAINE 109 % CHINA + HK 93 % MEXICO 61 % CHILE 135 % JAPAN 49% TAIWAN 90 % KOREA SOUTH 67 % PHILLIPINE 89% AUSTRALIA 89 % · Surplus countries ■ Deficit countries Germany Spain France Poland Denmark Italy Netherlands Belgium United Kingdom Austria Hungary Portugal Romania Ireland Sweden R.

Czech 24.2% 17.0% 8.6% 8.3% 7.0% 6.5% 6.3% 4.9% 3.9% 2.3% 1.8% 1.6% 1.4% 1.2% 1.0% 1.0% PORCIN MEAT ABATTAGE IN CERTAIN EU COUNTRIES In % of the EU, in 2015 (Source: Vincent Chatellier, INRA) PHOTO: ERIC THIJSSEN PHOTO: NICOLAS MESLY

To end this universal consumer personality disorder, the Tierwohl Initiative (literally, "Animal Well-being Initiative") was launched in 2015. It took four years to negotiate intensely between the nine main supermarket chains (which control 83% of the German food market), slaughterhouses (about 100) and agricultural producers to give birth to the project. With an annual budget of $127.5 million, the organisation is financed from the sale of meat, i.e. CA6¢ per kilo of meat sold.

In 2015, 3,500 producers made animal welfare projects on the farm. By the end of 2017, some 6,000 producers had access to this fund to improve animal welfare by 26 million pigs (23% of the market) and nearly 500 million chickens and turkeys (60% of the market). In 2018, the Tierwohl Initiative budget has been inflated to $195 million per year for the next three years. The fund is used to finance animal welfare projects, which are higher than the criteria of the already strict German law.

For example, a producer whose project aims to give 10 or 20% more space to a 110 kg pig, with a premium of litter or hay for fodder, is eligible. On average, the projects funded by the fund amount to $37,500 for farms that can vary in size from 12 to 10,000 animals. "We are not aiming to compete with existing niche contract specifications, but to raise the animal welfare standards of the entire industry," explains Patrick Klein. Tierwohl Initiative projects are awarded and audited by an independent team of experts.

For the audit, two annual visits are planned: one with a 24-hour advance announcement, to give time to prepare the necessary documents (e.g., a record of the use of antibiotics); the other with a surprise visit, "to create consumer confidence in the system". Since 2015, some 13,000 audits have been carried out, and 270 breeders have had to solve minor problems. However, one producer whose animals are suffering (e.g., without access to clean water) would be immediately removed from the Tierwohl Initiative programme and forced to repay the aid received – "what has not yet happened", says Patrick Klein.

Among the Tierwohl Initiative projects planned this year, there is the launch of a logo in spring, at the request of consumers, to indicate the program on meat packages. "We are also planning on developing an animal welfare index," continues Patrick Klein. The task is enormous, as millions of data (weight, animal constitution, liver, lung condition, etc.) must be processed and information is not standardized from one slaughterhouse to another. In 2019, we also intend to launch a "innovation support programme" for producers, who will receive a cash prize for any invention that could improve the welfare of their pigs or poultry.

German consumers pay for animal welfare MARTIN DIEDAM Martin Diedam has a 300-fold fattening maternity with his father and mother, close to the head office of Tönnies. The family business will benefit from an investment of 250,000 euros (375,000 CAD) from the slaughterhouse. It will finance a pilot project in a maternity of 50 sows, in order to develop animal immunity and reduce the use of antibiotics. This investment is on the margins of the Tierwohl Initiative. 4444 COOPERATOR.COOP – APRIL 2018 4545 COOPERATOR.COOP – APRIL 2018 PHOTO : ERIC THIJSSEN PHOTO : NICOLAS MESLY AGRICOLES AFFAIRS Imagine ...ta firm, your establishment You have undertaken a farm transfer or establishment of an agricultural business in recent years?

Take your dream even further! Sign up by consulting www.lacoop.coop/petf or your cooperative! Deadline for participation: 4 May 2018 110527_02-18 In the wake of the Chernobyl disasters and especially Fukushima, German Chancellor Angela Merkel decided to wean the Germans from nuclear energy. Today, almost a third of the electricity produced to heat German households and companies comes from renewable energy.

And farmers are contributing. The country currently has more than 7,000 biodigesters, which produce almost 7% of green electricity."Investing in a biodigester ensures a steady income for 20 years and can compensate for the risks of the pork price cycle," explains Erik Thijssen, a Dutch pig producer based in Germany since 2009. "The price of kilowatthours sold to electricity grids is around 7 cents (C$10.5¢), he explains.

But, in his opinion, for a biodigester to be profitable, it is necessary to own the land, not to rent it, in order to produce its cereals. Because the pig manure alone is not a good fuel."The biodigester works like the stomach of a cow," says Erik Thijssen. "To produce methane, it is necessary to feed it with corn or other cereals."

More than four million hectares are sown with small yellow grains to feed biodigestors, which feeds the debate "oil for food" and the debate on reducing biodiversity – the monoculture of corn associated with, among other things, the reduction of the bee population. The social pressure is enormous in terms of animal welfare, and it fears that the new German coalition government will further tighten the rules of the game for pig producers. 7000 biodigestors to wean nuclear energy L-ALLEMAIN ATTEINT 30% D-ELECTRICITY RENEWABLE IN 2016 Mix of raw electricity production Source: Energy Solution 647.1 TWhh in 2015 Eolien 13.3% Lignite 24.0% Biomass 6.8% Photovoltaic 5.9% Hydroelectricity 3.0% Nuclear 14.1% Anthracite 18.2% Biowaste 0.9% Natural gas 8.8% Petroleum 0.8% Other 4.0% Renewable energy 30% ERIC THIJSSEN from East Germany to the Netherlands to the cause of the sinking of the country.

This 55-year-old producer has a 1,600-year-old sow farm, sells piglets with a weight of 25 kg and has a pig-house with a fattening of 2000 places. PHOTO: GRACIOUSTY OF TÖNNIES PHOTO: PATRICK PALMER For 10 years, in the 23,800 pig farms in Germany, the number of sows has decreased by 23%, to stabilize at about 2 million animals, while the number of pigs slaughtered has remained almost stable at nearly 60 million animals. "It is less burdensome to fatten pigs than to take care of a maternity," explains Ulrich Pohlschneider, responsible for marketing at the Association of Pig Producers of Germany (ISN).

The abandonment of the breeder-finisher model in favour of finishing in this country is due to several factors: the rearing of sows in groups, the abandonment of the calving cages, the prohibition of cutting tails and the prohibition of castration without anesthesia (as of 2019) – all that contributes to increasing the costs of breeding. There is no vertical integration to the American in Germany. Producers are independent and can sell their animals on the weight-carcase basis to slaughterhouses through several channels (brokers, cooperatives or producer associations).

L-ISN operates an Internet auction twice a week, based on several principles: anonymity, insolvency insurance, and a standard transaction cost per pig sold that is close to CA$7 (€4.6). According to Ulrich Pohlschneider, German pig producers face enormous challenges: lack of recovery, high labour costs and, above all, enormous social pressure for animal welfare (primarily, animal housing), which increases production costs.

If the cost per kilo of pork produced in Germany is one of the lowest in Europe, it is 20 to 40% higher than the cost of the United States, Canada or Brazil, due to the price of animals and food. Pigs producer in Germany: a high-voltage profession GREEN FOR CANADIAN PORC IN EUROPE "Most of our plants are licensed, and our Canadian exporters are ready to conquer the European market," explains Martin Lavoie, President and CEO of Canada Porc International. "The Comprehensive Economic and Trade Agreement, in force since September last, allows the gradual export of pork meat without tariffs over a six-year period, up to a maximum of 75,000 mt, for a total access of approximately 80,000 mt.

Ractopamine, a legal substance in Canada, is not an issue, because Canadian farmers voluntarily avoid using it to meet the requirements of importing countries that prohibit its use, including Europe. ABBATOIR TÖNNIES L