Should we revisit our Dairy Supply Management System?

[Merry]

After reading the following article, and many others on the same subject, I'm leaning towards supporting the elimination (or at least the revision) of our current Dairy Supply Management System.

Supply-managed foods cost 36 million of us hundreds of dollars a year in exchange for keeping a few thousand landowners in traditional, often literally inherited jobs.

http://nationalpost.com/opinion/colby-c ... iry-strife

We all know that we pay far more for dairy products than our neighbours to the south. And I read somewhere that the average Canadian dairy farmer makes about 60% more than most Canadians. So, even if we do continue with the Supply Management Program, maybe it should be a little less generous? After all, why should Dairy Farmers be subsidized to the point where they make so much more than the average Canadian?

I use the word "subsidize" because Supply Management IS a form of subsidization. We, the people, subsidize the Dairy Farmers by paying more than we should for our Dairy Products.

If it can be proven that such subsidization is necessary in order to prevent our Dairy Farmers going out of business, that's one thing. But keeping the subsidies so high that these folks make a living that is well in excess of those paying the subsidy, is entirely another.

At the very least, it's time for a review of the system and probably a complete overhaul.

[Omnitheo]

Here was the article I referenced in the other Dairy thread (in which the OP used a trump quote for the title to try to steer in a Trudeau bashing direction).

https://www.theguardian.com/world/comme ... -trade-war

It appears that our Supply Management system is the envy of the dairy industry, and farmers in the US would prefer it over their current system. Despite Bernier's objections, all national parties in Canada support it, as does 75% of the population. Canadians don't seem to mind paying a bit more for dairy knowing that it is free of hormones, and generally of better quality.

It is true that it is a form of subsidy, however it is more a consumer's choice subsidy, as nobody is being forced to buy dairy products. Vs the US system where the government subsidizes farmers through taxes collected from all citizens.

[Merry]

Interesting article on the subject in the "Sun"

Supply management limits production on dairy, eggs and poultry.

Defenders of the system say it keeps markets from getting saturated, keeps prices stable and ensures a steady income for farmers.

In other words, it is price fixing.

It can easily be compared to the scandal grocery stores got themselves embroiled in after they got caught fixing bread prices.

Why do we think price fixing by grocery stores is bad, but just fine when it’s done by the government and farmers?

http://torontosun.com/opinion/columnist ... s-the-poor

[Merry]

It is true that it is a form of subsidy, however it is more a consumer's choice subsidy, as nobody is being forced to buy dairy products. Vs the US system where the government subsidizes farmers through taxes collected from all citizens.

As I pointed out in my earlier post, maybe some type of subsidy is necessary in order to avoid putting our dairy farmers out of business. But as the article you cited points out, current subsidies allow our dairy farmers to make 60% more than most of those paying the subsidy.

Canadian dairy farmers enjoy incomes 60% above average in the country.

Surely the Supply Management system should be revisited to correct this injustice? Why should we all pay such a large subsidy in order to give Dairy Farmers such a high income? It doesn't make any sense.

If the Government doesn't want to eliminate the subsidy, it should at least reduce it to bring Dairy Farmer's incomes more in line with those who are footing the bill.

[CapitalB]

Canadian dairy farmers enjoy incomes 60% above average in the country.

If the Government doesn't want to eliminate the subsidy, it should at least reduce it to bring Dairy Farmer's incomes more in line with those who are footing the bill.

That puts their income between 60,000 (individual median income +60%) and 112000 (median family income +60%). Which while its more than I make I wouldn't consider that really out of line for what they do. Its a lot of work, with a lot of hours put in, and a lot of risk of product loss.

[Merry]

Here's the REAL reason all our Political Parties don't want to dismantle the Supply Management System

any attempt to dismantle the dairy system would create a political uproar, particularly in the Liberal heartland of Ontario and Quebec, where most producers are located.

https://www.huffingtonpost.ca/2018/06/1 ... _23455888/

[Merry]

That puts their income between 60,000 (individual median income +60%) and 112000 (median family income +60%). Which while its more than I make I wouldn't consider that really out of line for what they do. Its a lot of work, with a lot of hours put in, and a lot of risk of product loss.

I don't really care how much the Dairy Farmers make - they can make double that for all I care, so long as I'm not subsiding their income.

If we (the consumer) are subsidizing their income, then it ought not to be to a level that is so much higher than most of us. After all, they CHOOSE to be in the profession they're in, and can choose a different one if it doesn't pay them as much as they'd like. It isn't right to expect the rest of us to subsidize their chosen lifestyle.

I'm sure there are a lot of people who would love to live in Kelowna, but can't afford to. Would you support the Canadian Public subsidizing such folks just so they can afford to live here? No you wouldn't. So what's the difference?

[kgcayenne]

Let's leave things alone. I avoid American dairy products for reasons that are damn good ones:

https://www.dairynutrition.ca/scientifi ... adian-milk

Highlights
Canadian milk is safe and ethically produced:
The use of artificial growth hormones (e.g., rbST) is not permitted in Canada.
Measures are taken to prevent antibiotics from entering the Canadian milk supply.
Programs to monitor milk quality and animal welfare have been established in the dairy industry.

Animal welfare
At the farm level, animal welfare can be assessed by input measures (e.g., feed, bedding, staff training) and output measures (e.g., milk production, health, fertility) that can be quantified and scored by trained observers. An on-farm animal care assessment program for the dairy industry is currently being developed to add input and output animal welfare measures to the existing CQM Best Management Practices.
With all these measures and practices in place, Canadians can be confident that milk produced in Canada is of the highest quality.

Canadian Quality Milk program
The Canadian Quality Milk program (CQM), approved by the Canadian Food Inspection Agency, requires farmers to create their own on-site safety protocols and standard operating procedures. The CQM program comprises eight Best Management Practices that dairy farmers must meet (see Table). All are inspected when the validator audits the farm.
Facets of the CQM Best Management Practice
1. Dairy facilities, pesticides and nutrient management
2. Feed
3. Animal health and biosecurity
4. Medicines and chemicals used on livestock
5. Milking management
6. Facility and equipment sanitation
7. Use of water for cleaning milk contact surfaces
8. Staff training and communication

The less American dairy in our food supply, the better. It's bad enough that anything made with grain grown in the US is sprayed with glyphosate right before harvest to dry and speed-mature it for higher yield and easier harvest.

[Merry]

Canada’s agricultural supply management system produces some startling numbers. Consider the following, for example:

Our import duty on butter is almost 300 per cent.

In 2015, the average Canadian dairy farm had a net worth of about $4-million, according to the Canada West Foundation.

And according to one study by a group of University of Manitoba researchers, the average Canadian household with kids spends nearly $600 more on dairy and poultry products than its American equivalent, for the same amount of food.

If that constellation of figures seems to yield a picture of government allowing an industry to get rich on the backs of consumers, it’s because that is exactly what’s happening. Production quotas, fixed prices and high tariffs provide steady profits for producers of poultry, eggs and milk at a steep cost to people who buy groceries.

Economic liberals – along with virtually everyone who has studied the issue – have been calling for the abolition or dramatic reform of supply management for years.

https://www.theglobeandmail.com/opinion ... it-fairly/

[CapitalB]

That puts their income between 60,000 (individual median income +60%) and 112000 (median family income +60%). Which while its more than I make I wouldn't consider that really out of line for what they do. Its a lot of work, with a lot of hours put in, and a lot of risk of product loss.

I don't really care how much the Dairy Farmers make - they can make double that for all I care, so long as I'm not subsiding their income.

Hey if we're going to stop subsidizing things people rely upon there are way better places to start than dairy. Say the oil sector, I'd rather not be propping that fossil up with my tax dollars.

[kgcayenne]

...the average Canadian household with kids spends nearly $600 more on dairy and poultry products than its American equivalent, for the same amount of food.

It might be the same quantity of food, but it's *bleep* poor quality in the US --processed products, not food.

[GordonH]

Dairy farmers are not the cash cow, it has & alway will be the middle man who gets largest share of the money.

Like every other food producer in this country they are at bottom of money chain (I can only speak of family farm, not the industrial farms).

Back when I was involved in the dairy farm, farmers were paid based on the quota they had (also interesting enough pay was based per/pound.... at grocery store milk is sold by the litre).

Now if a farmer sent above their quota, they would be penalized.
Oddly enough if the sent below their quota they would also be penalized.
Here is the absolutely craziest thing, if caught dumping guess what... you got it they would be penalized.

My parents got out of the dairy farming because of all the BS.

[Jflem1983]

Thank u Merry. I agree with u as always. Well said.

It is literally a dairy mafia in Canada. I do not buy a lot of dairy so i could care less. However i buy other goods. That are now gonna cost more due to Trudeaus tariffs. While Trump is a big jerk for imposing tariff on steel and aluminum. It is only effecting people in America.

Only a liberal could think it is somehow good to be in a trade war with USA to protect a few hundred dairy farms.

[Merry]

Consider the following (my bold)

The Canadian system of supply management imposes monopoly-like prices on consumers, while limiting the entry of new farmers and foreign products. This private taxation is regressive, meaning that low-income Canadians are disproportionately
affected when purchasing staples such as milk or eggs.

Add the cost of

chicken, and turkey, and a family of four annually pays hundreds of dollars more than they would under a liberalized regime. The system also makes imported cheese expensive, imposing additional costs on consumers who prefer foreign products

Supply management involves additional forms of private taxation. For small businesses and entrepreneurs, government-mandated cartels impose a capital investment burden on new farmers looking to enter the trade. In 2009, the
average dairy farm required $2 million worth of quota (besides the cost of cows and a farm) for a viable operation (Goldfarb 2009, ii). Meanwhile, incumbent dairy farmers enjoy the second-highest profit margins of all farmers – over 25 percent in 2011 – and poultry and egg farmers also do well, with a margin of about 15 percent. By comparison, the average Canadian business has a profit margin of about 8 percent.

Supply management has international consequences for Canada, slowing the negotiation of trade agreements such as the Trans-Pacific Partnership. It also reduces economic opportunities for farmers in developing countries (Boyer and Charlebois 2007, 1–2). According to the World Economic Forum’s 2012-2013 Global Competitiveness Report, Canada ranked 41st globally in the cost of its agricultural policy, below countries such as New Zealand and Australia, both of which have abolished their agricultural supply
management regimes (Hall Findlay 2012, 15–20).

https://www.cdhowe.org/sites/default/fi ... _382_0.pdf

[Merry]

...the average Canadian household with kids spends nearly $600 more on dairy and poultry products than its American equivalent, for the same amount of food.

It might be the same quantity of food, but it's *bleep* poor quality in the US --processed products, not food.

I'm sure we could regulate what goes into our milk, as opposed to continuing to support a system that keeps prices unnecessarily high in order to provide a small percentage of Canadians with an above average income.

whopping import tariffs (i.e., taxes) designed to keep competition low and food prices high. Such tariffs rarely garner much public ire because, unlike the GST or HST, tariffs are not visible on your bill at the till.

Consider some hidden tariffs on imported dairy products: Yogurt, 238 per cent; milk, 241 per cent; cheese, 246 per cent; skim milk powder, 270 per cent; ice cream, 277 per cent, and butter, 299 per cent.

Sure, as part of the planned Canada-European Union free trade agreement, the government signalled its intent to let in more tariff-free cheese from Europe. But this is hardly a dramatic reform; poorer consumers are not likely to buy imported specialty cheese from Paris, though this could change if the doors to imports were thrown wide-open and dairy prices dropped.

The more necessary but ignored reform in the dairy sector is to allow open competition across the Canada-U.S. border, and in fact between provinces. Right now, even internal entry into the dairy market is restricted and quotas on supply are imposed through the Canadian Dairy Commission, a Crown corporation which chairs the Canadian Milk Supply Management Committee. The latter body has the power to set restrictive quotas on dairy production.

Such power to ban new entrants and to restrict supply exists only due to federal legislation passed in 1966 to allow for such cartel-like powers. To wit, it is not as if there is some constitutional right to a cartel in cheese and milk.

https://www.fraserinstitute.org/article ... taxes-food