Sup­ply man­age­ment com­ing to end?

Cana­dian con­sumers have NAFTA 2.0, Trump to thank for de­crease in price of dairy prod­ucts

The Guardian (Charlottetown) - - OPINION - BY SYL­VAIN CHARLEBOIS

HAL­I­FAX — Canada’s sup­ply man­age­ment sys­tem is a text­book case for food sovereignty. But the so­cial con­tract the sys­tem rep­re­sents may need to be re­drafted as we head to­ward North Amer­i­can Free Trade Agree­ment (NAFTA) rene­go­ti­a­tions.

Sup­ply man­age­ment is a so­cial con­tract be­tween farm­ers and con­sumers. Canada’s heav­ily-crit­i­cized quota regime for the dairy, egg and poul­try in­dus­tries was set up decades ago to pro­tect strate­gic agri­cul­tural sec­tors by im­ple­ment­ing high tar­iffs on im­ports. Farm­ers pro­duce what the do­mes­tic mar­ket needs and we im­port very lit­tle.

There’s noth­ing like it else­where in the North­ern Hemi­sphere, since Europe got rid of its sys­tem in 2015.

How­ever, a re­cent An­gus Reid poll found that barely four per cent of Cana­di­ans sur­veyed can ad­e­quately de­scribe sup­ply man­age­ment.

Worse, 52 per cent of re­spon­dents be­lieve beef is sup­ply man­aged. It isn’t.

And 51 per cent of re­spon­dents be­lieve milk is not sup­ply man­aged when in fact dairy rep­re­sents about 80 per cent of the en­tire sys­tem. (Dairy Farm­ers of Canada, ar­guably the strong­est lobby group in the coun­try, has pub­lished sev­eral polls over the years show­ing that Cana­di­ans in fact sup­port the sys­tem.)

Given its com­plex­ity, just one thing seems cer­tain: most Cana­di­ans are clue­less about sup­ply man­age­ment me­chan­ics.

As a re­sult, sup­ply man­age­ment has be­come a po­lit­i­cal mi­rage. Most politi­cians have told us it’s good for us and our econ­omy, with­out fully ex­plain­ing the ra­tio­nale. Only a few politi­cians have sought to demon­strate the in­di­rect costs of main­tain­ing the sys­tem: lost op­por­tu­ni­ties and lack of in­no­va­tion to sup­port trade with other coun­tries.

The dairy sup­ply man­age­ment sys­tem op­er­ates in a vac­uum. De­ci­sions are made by dairy farm­ers for dairy farm­ers. Mean­while, Cana­di­ans com­ply with the sys­tem with­out know­ing all the facts. Other than former Con­ser­va­tive lead­er­ship con­tender Maxime Bernier, no na­tional leader has dared ques­tion the logic — and Bernier likely lost votes for his stand.

Now, Health Canada is send­ing sig­nals that it wants its next food guide to en­cour­age Cana­di­ans to adopt a plant-based diet. So the writ­ing for sup­ply man­age­ment, and the food in­dus­tries it props up, seems to be on the wall. Years of sound re­search shows that adults don’t need to drink milk. While science has evolved, the dairy in­dus­try has not and Ot­tawa knows it.

Canada’s dairy sec­tor has sur­vived in spite of it­self.

It doesn’t want to think about milk in a dif­fer­ent light. It doesn’t want to com­pete be­cause it has never re­ally had to. As bor­ders around the world were open­ing, dairy farm­ers’ rhetoric con­demned any­one who was dis­con­tented with our pro­tec­tion­ist sys­tem. Some dairy groups have even re­fused to talk to re­searchers who may think dif­fer­ently about sup­ply man­age­ment. That’s plain ridicu­lous. The at­ti­tude that “the sys­tem’s great, leave us alone,” just doesn’t cut it any­more.

De­spite our gen­eral ig­no­rance about sup­ply man­age­ment, Cana­di­ans have never dis­cussed the is­sue as much as we have lately. We even saw U.S. Pres­i­dent Don­ald Trump ac­knowl­edge its ex­is­tence in April, in dairy-friendly Wis­con­sin. Since then, mes­sages on the sub­ject from the United States have been mixed.

The Cana­dian gov­ern­ment is pre­par­ing for sev­eral NAFTA ne­go­ti­at­ing sce­nar­ios, with an ad­vi­sory com­mit­tee that in­cludes mem­bers from all po­lit­i­cal spec­trums. A few key agri­cul­tural ap­point­ments sug­gest no par­tic­u­lar bias.

Con­sumers im­plic­itly trust farm­ers, so why doubt them now? But with NAFTA dis­cus­sions about to start Aug. 16, stakes ap­pear to be much higher for all of us. In NAFTA 2.0, is it worth com­pro­mis­ing the fu­ture of many eco­nomic sec­tors in or­der to safe­guard sup­ply man­age­ment?

Ac­cord­ing to An­gus Reid, most Cana­di­ans polled would sac­ri­fice sup­ply man­age­ment to get a good broader deal with the Amer­i­cans and Mex­i­cans. This spells trou­ble for dairy farm­ers.

By stand­ing firm for the sta­tus quo, the Cana­dian dairy in­dus­try has no other op­tion but to hold its breath dur­ing ne­go­ti­a­tions. That’s not very strate­gic.

They can only hope NAFTA 2.0 will be kind to them, de­spite their decades-long in­ten­tional in­er­tia. Syl­vain Charlebois is Se­nior Fel­low with the At­lantic In­sti­tute for Mar­ket Stud­ies, dean of the Fac­ulty of Man­age­ment and a pro­fes­sor in the Fac­ulty of Agri­cul­ture at Dal­housie Uni­ver­sity

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