PEI Eggs: Part of a Regional Game of Chicken

I have been trying to understand the decision taken by PEI egg producers to lobby for a severe restriction on the number of hens which can be kept in production on small farms like ours in eastern PEI. I've noticed that the issue has stirred serious conversations across the province. And in fact, this is part of a larger conversation about food production which is now taking place across the continent.  

As I posted on Rob Paterson's blog, voters in the State of California passed Proposition 2 over the objection of California's Egg Producers, which hold 20 million hens producing 5 billion eggs per year. 

From Wikipedia:

Proposition 2 was a California ballot proposition in that state's general election on November 4, 2008. It passed with 63% of the votes in favor and 37% against. Submitted to the Secretary of State as the Prevention of Farm Animal Cruelty Act, the initiative's name (as with others such as Proposition 8) was amended to officially be known as the Standards for Confining Farm Animals initiative. The official title of the statute enacted by the proposition is the Prevention of Farm Animal Cruelty Act.

I learned today that Canada has managed to stave off a cross border flood of cheap eggs in part by using regional quotas to ensure Canadian production. So it seems to me that the issue in PEI isn't really about dangerous organic eggs or nightmare factory farms. It's about the current supply management system and the possibility that it may no longer support "small" commercial operations in the province.
 
I reached that conclusion when I looked beyond PEI. There is a regional chicken war in eastern Canada. Read more in The New Brunswick Business Journal article titled:

The Trouble With Processing Chicken

Industry: The feud between New Brunswick supplier and processor is threatening the stability of the supply-management system for poultry in Central and Eastern Canada

The Canadian Competition Tribunal, in ruling on the Nadeau case last year, examined the chicken industry's supply management system and declared "the poultry sector is likely the most highly regulated industry in the Canadian economy."

Under the supply-management system, provinces are assigned quotas by a national body and then provincial marketing boards set quotas for individual producers in their boundaries. The provincial boards also set minimum prices within each province.

Quotas can be expensive. The quota cost for an average-size chicken farm in Canada in 2007 climbed to $2.25 million, according to the competition tribunal.

The quotas are enforced by provincial marketing board bureaucrats, or "the chicken police," to employ the term used by people such as Patrick Langston, a small chicken producer near Navan, Ont.

There is so much paperwork involved in the whole process that processors are sometimes reluctant to deal with small producers, says Langston. Only deals with the big guys, apparently, make the onerous paperwork worthwhile. The squeeze on small producers gets even tighter as companies, such as Westco, become more vertically integrated, aiming to control every aspect of the industry from hatcheries to processing or, in the industry parlance, from egg-to-plate.

In the big picture, the PEI Egg Board represents "small producers" who are caught in the squeeze.  The big producers would be happy to see them pushed out.  Sound familiar? It looks to me as though the system designed to support local production is failing.