Feb. 24, 2011, N.B. – The Alward government has rejected a proposed solution that would stabilize New Brunswick's dysfunctional poultry supply management system, says Nadeau Poultry General Manager Yves Landry.
Feb. 24, 2011 – SAINT-FRANÇOIS-DE-MADAWASKA, NB – The Alward government has rejected a proposed solution that would stabilize New Brunswick's dysfunctional poultry supply management system. The government's lack of action represents continued mismanagement and abdication of its legislative responsibility, says Nadeau Poultry General Manager Yves Landry.
The government's refusal to implement a solution, he says, has resulted in the loss of over 160 jobs, and economic devastation in the small community of Saint-François-de-Madawaska, where Nadeau Poultry has been a major employer for more than 50 years.
Landry says that previous New Brunswick governments have turned a blind eye as limits were removed on the amount of the province's chicken production quota that could be held by any single producer. Historically, a producer was restricted from controlling more than ten per cent of the product. Groupe Westco, says Landry, has built a production cartel that today controls almost 80 per cent of the commodity, a level of control unprecedented in Canada.
"We urged the government to take action and implement any number of possible stabilizing solutions. Without a remedy, it was clear that the province's poultry supply management system would no longer function. If the spirit and intent of the legislation were monitored and regulated as it is in other provinces in Canada, the current situation would never have occurred," says Landry.
Since September 2009, Groupe Westco has diverted the chickens it now controls to its partner Olymel in Quebec for processing. "After ignoring the issue while it was happening, the government now continues to sidestep it and refuses to intervene, says Landry. "By doing so, they are in fact rewarding Westco's very questionable business practices in attempting to starve Nadeau of chickens. Not to mention Groupe Westco's total disregard for the devastating economic and human toll on a small community where so many jobs have been lost."
New Brunswick should look to other provinces for examples of what should happen here, says CEO Maple Lodge Farms Michael Burrows. "Different provinces use different tools to ensure supply management remains stable and that the interests of all stakeholders are protected," he says. Burrows pointed to Manitoba as an example: "Despite appeals to the Manitoba Minister of Agriculture, Groupe Westco was not allowed to exceed the regulated quota limits." In British Columbia, not unlike the situation in New Brunswick, a producer entered the processing sector as well. However, British Columbia had plant supply allocation, he added, and that maintained stability.
Nadeau Poultry invested millions in a state-of-the art plant in 2002 when the original plant was destroyed by fire. In addition to its long time commitment to the community, Nadeau rebuilt based on the expectation of a stable supply of product as guaranteed in supply management, says Burrows. "Instead, we're scrambling for product, depending temporarily on chickens from Nova Scotia to keep as many employees as possible on the job." But that supply will soon end, he says, with the construction of a new processing facility scheduled to open in 2012. Sourcing chickens from Ontario or Quebec is also challenged by moratoriums on the export of chickens in those provinces as a means to protect their own processors.
The government is ducking its responsibility when it describes the breakdown of the system as simply a "commercial dispute," Burrows says. "It's a supply management failure and the government is responsible for fixing it. You would be hard pressed to find anyone knowledgeable about the system who would not agree that a producer should not be able to destroy or force the sale of a private commercial processing business by using the regulatory protection of supply management."
Former Federal Agriculture Minister Lyle VanClief says national supply management representatives and others are watching the New Brunswick situation with concern. Canada, he pointed out, decided in the 1970s that certain products would be governed by a supply management system as a means of protecting the country's food security and accessibility.
The resulting interlocking federal and provincial legislation governing the system has resulted in a legal framework that assumes ongoing dialogue, he explained. "But, when one partner stops talking, it doesn't work. And that's what has happened – New Brunswick has "stopped talking," says VanClief. Specifically, he added, the need for a continuous flow of product to processors is not being recognized or ensured in New Brunswick,
thus jeopardizing the province's opportunity for a strong, efficient and competitive industry – not just a wealthy producer sector."
The solution recently rejected by the New Brunswick government, says Burrows would involve the establishment of the New Brunswick Chicken Marketing Agency, which would deal solely with the marketing of broiler chickens past the farm gate and would allocate live chicken supply to processors both within and outside New Brunswick.
This is known as single desk selling. The current regulatory bodies would retain all other powers within their current mandate. "The establishment of this single desk selling for poultry and equipping it with the appropriate authority, such as what New Brunswick already has for turkey, will ensure adequate supply of New Brunswick grown chickens to New Brunswick processors," says Burrows.
It will also, he says, maximize employment opportunities in the chicken processing industry, and encourage a strong, efficient, competitive chicken processing industry in New Brunswick. This approach exists today in New Brunswick's milk marketing system.
The beauty of the proposed approach is that it allows fair treatment for all processors in the province." For example, the chickens would be equally divided if Westco were to build a new plant," says Burrows. "It's a fair and equitable solution that would restore stability in the province's poultry supply management system."
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