March 13, 2017

Supply management: This sacred cow in Canadian politics must be debated

Holly NicholasRebel Commentator Holly Nicholas
 

Supply management has become a hot topic in Canada ever since conservative leadership hopefuls started making it a point of argument during the leadership race, with Maxime Bernier proposing to abolish it completely. 

It’s a pretty broad topic, but the basics are that production is met with consumption and imports and exports are taken into account in order to ensure that shortages and surpluses aren’t a problem.

Producers pay thousands of dollars for permits and quotas in order to be able to operate and those permits are limited.

So because permits are limited, that also means that supply is limited and some say that leads to higher prices.

That’s one side of the story, but others say that Canada’s pricing is competitive.

There are also duties imposed on foreign dairy products. It’s like a protectionist measure to keep foreign products out of the Canadian market.

There are also tariff rate quotas to factor in and when products being imported are over the limit, higher access commitment fees have to be paid.

Overall, anything the government has its hands in is bad news simply because it usually involves protectionist policy, which usually favours one entity over another and in the case of supply management, the consumer seems to be left out.

It means less choice for consumers because trade is limited and it means higher costs for consumers due to having to pay for common floor prices set by boards and farmers.

Comments
You must be logged in to comment. Click here to log in.
commented 2017-03-14 07:39:39 -0400
“but if you were selling your used car and you have two days to sell it and only two guys to posibely sell it to, you know what your chance of getting a fair price is going to be…:

Well, one of those buyers is certainly going to think he got a fair price. You see, BART, your own comment is a shining example of the weak spot in all the arguments to retain S-M: the utter absence of any concern for the buyers.
commented 2017-03-14 02:08:57 -0400
Good point about Australia.
commented 2017-03-14 01:57:14 -0400
Bart Huisman the Wheat Board comparison is spot on, it is the same thing.
commented 2017-03-14 00:57:52 -0400
Comparing the dairy industry to CWB does not make sense, or any other business, I used to be in the dairy business, and part of supply management.Now I am in the beef business, and I wouldn,t want to see supply management in this type of farming,I,m not sure,I would want to see it in other types of farming either, but if you were selling your used car and you have two days to sell it and only two guys to posibely sell it to, you know what your chance of getting a fair price is going to be
commented 2017-03-13 18:52:43 -0400
Bart apply that logic to liquor sales, the cost and convenience in Ontario is ridiculous. ALCB stores here were average at best when they operated and it was much easier for minors to buy booze from them. I used to buy beer when i was 14 from the ALCB stores.
commented 2017-03-13 18:50:23 -0400
Bart Huisman you are very wrong. Government does not run things worth a damn and they pass the cost onto the producer. Farmers did better after the CWB was not mandatory , in fact the CWB ruined many farms and chased people away from it so that only large operations could make it. Exactly the opposite of what you are claiming.
commented 2017-03-13 16:27:10 -0400
“If you want to destroy a viable industry, you take away supply management,…”

Really, BART? Then, tell me this, are there any “viable” industries that are NOT supply managed? And further, would any other industry that depended on a rigged system for its continued existence also meet your definition of viable?
commented 2017-03-13 15:48:50 -0400
If you compare milk prices across the world, you should take the price the farmer gets, there is a big difference in mark up once it leaves the farm. If you want to destroy a viable industry, you take away supply management,just look at Holland, milk prices dropped like a rock. The Goverment intervened ,and offered to buy out a few hundred dairy farmers, they had those signed up within 24 hours. Dairy is very regulated in Canada,more so than some other countries, and it has a disadvantage in climate,compared to the USA or New Zeeland. When you have a product to sell, that has to be gone of the farm in two days, and you are lucky enough to have more than one buyer, you know what kind of bargaining position you are in. With dairy processing plants owned by a few companies, and spread out, dairy farmers would be in trouble
commented 2017-03-13 14:35:34 -0400
This seems to be a fight primarily between Bernier and Blaney. I would tend to side with Bernier, but not a top issue as far as determining who I would like to be the leader of the Conservative Party.