Dairy subsidies support rich farmers, hurt poor Canadians the most

Facts matter. No special interest group funds our work on supply management. We recommend public policy directions that are non-partisan, nonideological, based on evidence.

On the other hand, the dairy lobby is one of Canada’s richest and most powerful. It spends more than $100 million every year on lobbying and marketing — aimed at politicians, the public, trade negotiators, and, most frustratingly, farmers. The myths they tell have their own farmers scared, the public inured to exorbitant dairy prices, and politicians completely cowed.

But where does all that money come from? Average Canadian families who pay almost $600 more per year for basic nutrition than they should.

Farming can indeed be hard work, but so is teaching, mining, nursing, construction and many other Canadian jobs.

Why then, should dairy producers — not even 6 per cent of Canadian farmers — each be worth, according to Statistics Canada on average, net, so including all debt, almost $5 million dollars?

I don’t know too many millionaire teachers, miners, nurses or cement-mixers.

Meanwhile, NAFTA talks are stalled and we have tariffs on steel, aluminum and soon, cars. And while dairy is a huge irritant for Donald Trump, we continue to defend it, sacrificing in the process many of our other economic sectors. Every Canadian who works in the auto sector; in a steel mill or aluminum plant; or in any factory that manufactures goods using steel or aluminum — should be furious as the Canadian government continues to defend supply management, purely for domestic politics. Breaking some myths: “Supply management systems provide high quality, locally produced food at stable, reasonable prices for consumers.” This is not due to supply manage- ment — the same is true for our locally produced beef, corn, pork, grain, pulses, none of which get this rich protection.

“We can’t compete with the heavily subsidized U.S. dairy producers.” Recently, the U.S. has dramatically reduced its own subsidization of dairy. According to the OECD’s 2017 market price support estimates for milk, Canada’s dairy subsidy is seven times greater than in the U.S. The difference is that in Canada, it is paid for directly by consumers — with studies showing that it hurts poorest Canadians (often singleparent families with small children) the most.

“The U.S. maintains a large surplus in dairy trade with Canada.” The amount of dairy traded between the two countries is tiny compared to overall production.

“Supply management ‘protects’ the family farm.” This is sheer nonsense. In Canada, the rate of consolidation has actually been higher in the supply-managed dairy, poultry and egg sectors, than in most other agricultural sectors. Whereas in the 1970s there were approximately 145,000 dairy producers, today there are close to 9,000.

Recent scare tactics include noting that “Wisconsin lost 500 dairy farms in 2017 and we don’t want that to happen here.” Wisconsin and Canada have about the same number of dairy farms — and Canada has also “lost” on average about 500 dairy operations, per year, for the last three years. Same level of consolidation as Wisconsin. Except there aren’t fewer cows or less production. It’s not a “loss” of a farm, it’s that someone decides to sell to someone else who is consolidating.

“Without supply management we’ll get U.S. milk produced with growth hormones.” For the recent CETA trade deal with the Europe, Europe insisted that beef coming from Canada be hormonefree. There is no reason why Canada cannot do the same for U.S. milk.

“There are no export opportunities, the global milk market is suffering a major glut.” As with all commodities, global prices fluctuate. And dairy exports are already rising again. Australia’s exports are up 14 per cent from last year. U.S. exports increased fourfold in only a decade.

We should dismantle supply management — not because Trump says so, but because it’s in Canada’s best interests. (Only because of Trump, right now would be a good time.)

Fair compensation, for sure. Financial transition assistance, of course. Ensuring a level playing field with the U.S. dairy producers, absolutely. But for the sake of the rest of Canada’s economy, now is the time to finally do what’s right.

We should dismantle supply management — not because Trump says so, but because it’s in Canada’s best interests.