Why supply management may finally be doomed

Some have claimed supply management was established as a social contract between farmers and consumers. Our heavily criticized quota regime to support the dairy, egg and poultry industries in Canada was set up decades ago to protect strategic agricultural sectors by implementing high tariffs on imports. Farmers produce what we need and import little from abroad — simple.

There is nothing like it in the Northern Hemisphere — at least not anymore, since Europe got rid of its system back in 2015. But if there indeed ever was a social contract, it may need to be re-drafted as NAFTA negotiations begin.

According to a recent Angus Reid poll, barely four per cent of Canadians can adequately describe what supply management really is. Worse, 52 per cent of Canadians believe beef is supply managed, when it is not. What is more, 51 per cent of Canadians believe milk is not supply managed, when dairy represents about 80 per cent of the system.

Dairy Farmers of Canada has published several polls over the years showing Canadians are supportive of the system. But most of us are simply clueless about the mechanics behind supply management.

As a result, supply management has become a sort of political mirage. Most holding public office have told us it is good for us and for our economy, without fully explaining the rationale. Few politicians have sought to demonstrate the indirect costs of hanging on to such a system: lost opportunities, lack of innovation to support trade with other counties, and so forth. In dairy, the system operates in obscurity with decisions made by dairy farmers, for dairy farmers. Canadians comply with this system, without knowing all the facts. Other than Conservative MP Maxime Bernier, who paid the price for doing so, nobody has questioned the logic.

With Health Canada sending signals that it wants its next food guide to encourage Canadians to adopt a plant-based diet, the writing seems to be on the proverbial wall.

With the support of sound research over the years, we know that inciting adults to drink milk is just not on anymore. While science has evolved, the dairy industry has not, and Ottawa knows it. The Canadian dairy sector has survived in spite of itself. It doesn’t want to compete because it has never had to. As borders around the world were opening, dairy farmers were divorcing themselves from the Canadian population, using rhetoric and condemning anyone displaying discontent for the system.

It appears some dairy groups are even disallowing research to be conducted by any researchers who may think differently. This attitude of “the system’s great and leave us alone” just doesn’t cut it anymore.

We saw the president of the United States acknowledging this issue back in April. Since then, messages from the United States have been mixed, and the Trudeau government seems to be preparing for several scenarios.

It has appointed an advisory committee that includes members from all political spectrums. For agriculture, a few key appointments were made without favouring one side or the other.

Consumers implicitly trust farmers, so why doubt them now? But with NAFTA discussions about to start, stakes appear much higher. Some are starting to wonder if compromising the future of many economic sectors in order to safeguard supply management is worth it. According to the same Angus Reid poll, most Canadians are willing to sacrifice supply management to get a good deal with the U.S. and Mexico. This spells trouble for dairy farmers.

Dairies in Canada are holding their collective breath. Let’s hope NAFTA 2.0 will be kind to them, despite their decades-long intentional inertia.

Sylvain Charlebois is dean of the faculty of management and professor in food distribution and policy at Dalhousie University.