COLUMN

Chicken wars in the Great White North

Farm marketing boards are mini-cartels that dampen competition and discourage small new farmers with expansion plans

DIANE FRANCIS January 9 1989
COLUMN

Chicken wars in the Great White North

Farm marketing boards are mini-cartels that dampen competition and discourage small new farmers with expansion plans

DIANE FRANCIS January 9 1989

Chicken wars in the Great White North

COLUMN

Farm marketing boards are mini-cartels that dampen competition and discourage small new farmers with expansion plans

DIANE FRANCIS

Leo and Penny Trottier have spent more than $20,000 fighting for the right to raise chickens legally on their tiny farm in remote Nakina, in the northwest corner of Ontario. The Ontario Chicken Producers Marketing Board has refused permission for the Trottiers to raise chickens. Their story illustrates the tyranny of marketing boards, which function as mini-cartels within our economy. Such boards limit the supply of commodities by issuing quotas to approved farmers. The quotas keep prices artificially high and insulate farmers from the competition of the marketplace. The original purpose of such boards was to subsidize vulnerable family farms. They were created in most provinces in the 1960s and 1970s and offered a guaranteed price for chickens, turkeys, eggs and dairy products. Ironically, the restrictions on competition have resulted in huge rewards for established farmers and have made entry by new, smaller farmers difficult. As a result, a policy that was first designed to encourage family farming now makes it impossible for small producers like the Trottiers to break in.

“It should be an open marketplace,” said a defiant Penny Trottier, 33, who has been fighting the provincial agencies that implement Ontario marketing board rules since 1986. She added: “Reports done by both levels of government all say that the original purpose of supply management can be deemed a design failure because it prevents anybody from getting in. It takes away the freedom of enterprise, the freedom to risk. I just wish I had the money to challenge marketing boards under the charter of rights. It’s wrong.”

But William Doyle, general manager for the Ontario chicken board, says that without marketing boards, commodity prices would be on a roller-coaster ride and only huge corporations would be in the business, as is the case south of the border. But the Trottiers’ sad tale illustrates how the system victimizes farmers too. They have joined the ranks of a farmers’ minirevolt, centred in British Columbia, where

those who have been shut out of quotas are fighting back. The Trottiers are raising and selling chickens, despite being told by the Ontario chicken marketing board in Burlington, Ont., that they are not permitted to do so. The board has the power to fine them, but has not yet done so. Said Penny: “You could say we are farming illegally.”

Marketing boards also victimize consumers. A study by the Economic Council of Canada last November estimated that the overpayment for dairy products alone takes $1 billion a year out of the hides of consumers. According to a 1987 study by Prof. Wayne Thirsk of Ontario’s University of Waterloo, “In the case of eggs, turkeys and chickens, Canadian prices have risen sharply relative to U.S. price levels, eliminating earlier export capabilities.” In 1987, one dozen Grade A large eggs cost $1.45 in Canada, but only $1.29 (Cdn.) in the United States. Chicken breasts cost $3.09 a pound in Canada compared with $1.99 (Cdn.) a pound in America. The Trottiers’ battle began in 1986 when Penny saw an advertisement that said the Ontario chicken marketing board had quotas available for “new entrants.” She applied for a quota, and then the fun began. The application pitted the Trottiers not only against

the power of a marketing board but also created a clash between provincial bureaucracies. In essence, her battle shows that the Ontario chicken marketing board is on a collision course with other avowed government goals, including regional development and industrial diversification in remote areas.

The Trottiers have been farming their 52 acres of land since 1980. Her husband works full time as a tree-cutter, and Penny’s chicken operation supplements the family income. In addition to raising birds, the Trottiers planned to build a poultry-processing operation to serve the northwestern region. Said Penny: “We did our studies and came up with this operation. We figured the spin-offs from a processing plant would be great and open doors for other farmers who wanted to raise chickens, turkey, geese, whatever.”

The couple met with marketing board and provincial ministry of agriculture officials in Toronto, who insisted that they prove the economic viability of their processing plant. The ministries of agriculture and northern development then paid for a $120,000 study, which concluded that the project was not viable.

But then Penny Trottier convinced them that the study might be wrong, and the ministry of agriculture commissioned a second report. It contradicted the first report. As a result, northern development officials agreed to pay the Trottiers’ legal fees to appeal their case to a farm products tribunal. At the tribunal, the Ontario chicken marketing board suggested that raising birds of different ages, as they proposed, would increase the likelihood of disease spreading. Said Penny: “We hired an engineering firm in Guelph, drew up plans based on an existing Nova Scotia operation where this was done, and they couldn’t argue anymore. The poultry specialist said no problem, but the tribunal said that it could not judge the matter because it was not within its jurisdiction.”

The Trottiers appealed in 1987 to Ontario Agriculture Minister John Riddell. Recalled Penny: “His answer was that the tribunal acted properly in refusing to rule because it was not in its jurisdiction, then said he could not believe there was no chicken quota in the North.” In December, 1987, Riddell announced that a study would be conducted by a Northern Ontario committee and a group of consultants. Penny was asked to participate. The study concluded that raising and processing chickens would not be commercially viable in the North. Said Trottier: “I was upset.”

After two years of the runaround, she has applied for venture capital funding from another provincial agency, the Northern Ontario Heritage Board, designed to encourage northern industry. Meanwhile, this fall, the Ontario chicken marketing board said that it “eased” its quota entry rules by allowing farmers to buy quotas without also having to buy the farm itself. Said Penny Trottier: “It would cost $600,000 just to buy the quotas alone. We simply want the right to compete, and this system doesn’t allow it. We want the right to fail, or succeed.”