Let him have it

The Amherst News - - COMMUNITY - Frank Likely Frank Likely is a re­tired Angli­can min­is­ter liv­ing in Springhill.

U.S. Pres­i­dent Don­ald Trump says he wants free trade with no tar­iffs, du­ties or sub­si­dies. I think we should give it to him. We could even give up sup­ply man­age­ment to sweeten the deal.

Trump has con­stantly be­rated Canada for our sup­ply man­age­ment sys­tem cov­er­ing dairy prod­ucts and has threat­ened to pull out of NAFTA un­less we scrap it un­der any new deal.

“Free, fair, and re­cip­ro­cal trade” is his mantra.

Canada has so far con­tin­ued to in­sist sup­ply man­ager has to re­main, but per­haps it is time to re­con­sider this po­si­tion in ex­change for the United States re­mov­ing all sub­si­dies it of­fers to its farm in­dus­try. Each five years the Amer­i­can govern­ment has re­newed what it calls a farm bill which pro­vides as­sis­tance to var­i­ous sec­tors of the agri­cul­tural in­dus­try to prop up un­prof­itable ar­eas. These sup­ports in­clude such things as crop in­sur­ance, sub­si­dized ir­ri­ga­tion, and crop pur­chases to take ex­cess off the mar­ket.

In the last Farm Bill, which was ap­proved in 2015, these mea­sures pro­vided in ex­cess of $20 bil­lion alone in direct and in­di­rect sub­si­dies to the Amer­i­can dairy sec­tor. A com­pre­hen­sive re­port com­pleted ear­lier this year says these sub­si­dies ac­counted for 73 per cent of re­turns to dairy farm­ers. Even with such mas­sive sub­si­dies, Amer­i­can dairy farm­ers have lost money ev­ery year from 2005 to 2016 which is the last year for which data is avail­able.

By con­trast, the sup­ply man­age­ment sys­tem in Canada cost about $5.5 bil­lion per year, which amounts to about $450 per year per house­hold. We pay these costs in higher prod­uct costs due to the lim­ited sup­ply.

I’m not overly con­cerned that Amer­i­can dairy pro­duc­ers will over­whelm an open mar­ket be­cause I’m not sure how many of them could sur­vive when they can’t even make money with govern­ment sub­si­dies cov­er­ing al­most three-quar­ters of their costs.

Best be care­ful what you wish for Mr. Pres­i­dent.

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