Modernize supply management
The Trans Pacific Partnership, or TPP talks, is a major opportunity for Canada to participate fully in the world’s fastest growing economic region. But reaching a deal is hampered by Canada’s short-sighted defence of our supply management system, which controls the production, import and sale of poultry and dairy products.
Canada is the last major country in the world with quota production still in place for products like milk. New Zealand led the way and ended dairy supply management in the 1980s. The member states of the European Union ended 30 years of milk quotas on March 31 of this year, in the express belief that, free from constraints, their dairy farmers will be better positioned to exploit growing export demand for their products.
Defenders of supply management give many reasons why the status quo should hold in Canada, and call on the government not to “give away the family farm” to get a TPP deal. (Though the family dairy farm has become very much a myth, with 125,000 disappearing since 1961, leaving only 12,000 in 2014 and many corporate owned.)
Canada’s 90,000-plus restaurants, caterers, pubs and other food service establishments have a vested interest in a strong, vibrant Canadian agricultural sector.
We annually buy some $5 billion in supply management products (dairy, chicken, eggs) alone. In many ways, we are the research and development arm of Canadian food and agriculture, working with farmers and processors to bring new menu items to market.
Think chicken wings, smoothies or egg breakfast sandwiches: these were all introduced to consumers at restaurants, and have served to drive demand for Canada’s high-quality dairy and poultry products. We want to do more, but the exorbitant price of these products often makes it economically unviable.
Restaurants Canada has long called for supply management to be modernized, and be more responsive to providing the products our members want, at prices that are fair to farmers, consumers and our industry.
More than 90 per cent of Canadian farmers operate outside of supply management, and many are well on their way to developing important export markets. To encourage their success, our association calls on the government to fully participate at the TPP table, for the greater good of Canadian agriculture, business and the country as a whole. The 10 per cent of farmers who benefit from supply management should not hold back the 90 per cent of Canadian farmers who want more access to global markets. Of equal importance, the supply managed farm groups will be left behind if they aren’t part of a TPP deal.
Approval of the TPP could be the sorely-needed catalyst to bring Canada’s dairy and chicken industries into the 21st century, displacing current complacency and driving a renewed sense of innovation, efficiency and desire for growth.
Both industries have been stagnant for some time, with only minor, if any, per capita consumption growth among Canadian consumers. Likewise, sales are stagnant in the Canadian restaurant industry, with dairy items in particular, dropping off the menu.
A reason for this is not hard to find: Canadian chicken and dairy prices are among the highest in the world. Both consumers and our industry pay a high price for supply management. One estimate holds Canadian families, rich and poor, pay $311 a year in higher dairy and poultry prices because of supply management. In the restaurant industry, a slice of cheddar cheese for a burger in the U.S. might cost 7 cents, while the same slice of cheese costs 28 cents in Canada. The TPP offers the opportunity to closely consider the continued relevance of supply management and, we would advocate, begin to move these industries to a more rational economic basis.
The New York Times predicts one of the clearest winners of the Trans-Pacific Partnership agreement will be American agriculture.
Just like domestic wine and grain growers before them, Restaurants Canada is confident that by focusing on the products they make best, and introducing new ones in response to export opportunities, Canadian dairy and chicken producers can compete and flourish in a global trade environment.
90 per cent of Canadian farmers operate outside of supply management