Costs higher to dismantle supply management
supply management continues to be a stumbling block at negotiations between Canada and the u.s. over a new north american free trade deal.
supply management is an awkward name for the quota system that governs the production and sale of milk and its byproducts plus eggs, chickens and turkeys in Canada.
it sets a price for producers, ensures oversupply won’t flood markets and drive prices and quality down, and generally manages production.
because it introduces stability, the system helps ensure a future that allows producers to plan and grow.
in a free-wheeling system without any controls, producers are allowed, if not encouraged, to become their own worst enemies by overproducing until their neighbours are driven out of business.
that’s the situation in which american producers, without a quota system, find themselves.
u.s. president donald trump has railed against the Canadian quota system as it applies to dairy products. unfortunately, the pumpkin patch president has the same depth of understanding of dairy production and trade as he has of leading a country.
the situation is about much more than “levelling the playing field,” as trump says.
For example, the u.s. claims to embrace the free market, yet heavily subsidizes its dairy industry.
many urban commentators long ago decided the quota system keeps consumer prices artificially high and therefore it should be scrapped. that, of course, is a superficial view.
author John ralston saul, quoted in ontario Farmer, has taken off urban glasses and come out in favour of the system, saying “a lot of american dairy farmers would like to have the Canadian system.”
out in the boonies, the quota system has a huge impact on communities. businesses that serve the farm industry, whether with feed, equipment or services, can survive and thrive only if the sector is successful.
another broader view of the community was expressed by a reader whose family runs a dairy farm in south central ontario. she works in a major agricultural organization based in ottawa.
she wrote, “We are active community volunteers and sustainability is at the heart of our farm …
“i am worried that our farms and those of my friends will be forever and drastically changed if our supply management system is ceded in these negotiations.
“i have travelled and spoken with farmers around the world and none can say they have benefited from quota dismantlement.”
the reluctance of governments in Canada to dig into agriculture and rural life with a view to protecting and maintaining the sector may be partly to blame.
When the ontario government decimated the horse race industry there was a naïve belief that only “rich” horse owners would be hurt. but for every one of those, there were 100 — from stall muckers to hay merchants — dependent on the industry.
governments have been ignoring the basics about rural life throughout the last century and will continue to do so. at their peril.