There is a lot of spin from think tanks these days being spotlighted in the news suggesting that Canada needs to give up its orderly marketing tools such as our Supply Management (SM) system for dairy, poultry and eggs.
A lot of effort is going into convincing us that these ‘oppressive- government-run-collective-marketing-systems’ stifle competition, hamper trade negotiations and victimize consumers with higher prices. I think we need to take great care and look at the facts as well as the systems in other countries before throwing out a system that has worked well for both farmers and consumers.
The three pillars of supply management - import controls, production planning, and producer pricing - allow farmers to earn back their cost of production along with a reasonable income directly from the marketplace without having to rely on government support programs. Compare that with the U.S. where the government just spent $300 million to buy up chicken so the severely struggling chicken industry could stay afloat and are considering doing so again.
Even so, that didn’t keep three major processors from going bankrupt this year. Everyone is cutting each other’s throat to try and keep going and that is why the prices are so low. Is that the kind of competition we want for our farmers? At least in Canada we only have to pay once for our chicken and not again at tax time.
Given the number of trade agreements we have signed on to while maintaining our SM system, I would argue that as long as Canada stands strong in keeping it off the table, this should not be any more of a sticking point in trade agreements than it has been in the past. However, now that the Conservative government is illegally legislating away the Canadian Wheat Board, another great Canadian marketing institution, my worry is that SM will be isolated and it will become even harder to stand against the forces that are aligning to get rid of it.
According to a recent article in the Western Producer the price of a two litre bottle of milk was $3.15 in Canada, $2.40 in Los Angeles and $3.73 in New Zealand (NZ), begging the question - why is there a 55.4% price discrepancy between the US and NZ where there is no SM, with NZ significantly higher than Canada? Doesn’t this suggest there are other factors involved and there is no guarantee Canadians would pay less if SM disappeared tomorrow. After all, our farmers only make 21 cents on that $2.25 glass of restaurant milk.
US dairy farmers have been devastated by low milk prices and are quitting in droves. A NZ consumer survey reported that 79% of New Zealanders wanted a government inquiry into high milk pricing practices. In Australia a Senate enquiry slammed the impact that the two major supermarkets were having on their dairy industry recommending a close eye be kept out for possible misuses of market power on pricing practices. Should we sacrifice our marketing structure that provides us good quality food at reasonable prices and keeps farmers farming only to face a similar uncertain future?
As with the Canadian Wheat Board, SM is an orderly market system that plays a substantial role in maintaining our country’s food sovereignty and security at no cost to the taxpayer. In a world rife with economic collapse and market upheaval we should think very carefully before falling for spin that only presents part of the picture and would undermine a stable system that works for Canadians.
Alex Atamanenko, MP
BC Southern Interior