Canada restores stability in New Brunswick's poultry market

Nine months ago, 250,000 chickens began crossing New Brunswick borders to be processed in Quebec. One hundred and sixty-five New Brunswick jobs went with the chickens. The events that led up to the erosion of the province's poultry processing sector points to a situation that is far more than a commercial dispute between Groupe Westco and Nadeau Poultry; rather it's all about what's gone wrong with the poultry supply management system in New Brunswick.

Treating this matter as a purely commercial dispute and leaving the outcome to a quasi-free market system would be precedent-setting with far-reaching negative implications for farmers, processors, and consumers alike - here in New Brunswick and across the country. Unregulated markets have historically not been kind to farmers. Thus, national supply management systems are intended to protect the interest of family farms. However, the need to protect the interests of other stakeholders in the supply chain and of consumers was also recognised in legislation that called for a "strong, efficient and competitive production and marketing industry for the regulated product" and a system that worked in the "balanced interests of producers, industry stakeholders and consumers."

In New Brunswick, a key link in the supply management chain was broken when the Chicken Farmers of New Brunswick (CFNB), the body mandated to manage the system in the province, allowed one entity, Groupe Westco, to gain control over almost 80% of the chickens raised in New Brunswick. No other province in the country allows such a level of market dominance of a regulated product. It prevents a stable supply to competitors such as Nadeau, and opens up the door for monopolistic and predatory practices.

The impact of the Westco/Nadeau issue has supply management experts concerned beyond New Brunswick's borders. The ongoing feud, according to some industry experts, is threatening the stability of the entire supply management system in Central and Eastern Canada. If one company is allowed to defy the principles of supply management, this signals a threat to stability of supply for all independent processors, a situation that can cause a cascade effect throughout the system resulting in shortages of processed chicken for markets, inability for processors to supply long-term customers and, inevitably, increased cost to consumers.

While the CFNB is responsible for administration of the Provincial Chicken Marketing Plan, it receives that authority from provincial legislation. In the interest of sound policy management, the government would be justified in replacing the current dysfunctional system. After all, self-sufficiency rests on the province's ability to add value to its resources rather than continue to ship raw product beyond its border.