A novice bureaucrat (and future PM) on supply management

Here’s a stray bit of commentary from the distant past to mull over along with the news that the Harper government just might be willing to consider reforming Canada’s politically sacrosanct, economically dubious protection of poultry and dairy farmers:

“Price support is only a means; the end we seek should be a livable income for every citizen. And as a means, price support cannot be used systematically; for it naturally tends to prevent equilibrium of demand and supply.”

That’s from the six-page memo “On Price Support for Commodity Surpluses,” written by very junior civil servant named Pierre Trudeau in 1949, when he was briefly assistant to Gordon Robertson, the head of the Privy Council Office’s economics division. His sensible advice on the economics of agricultural and fisheries is quoted in the new biography Trudeau Transformed: The Shaping of a Statesman, 1944-1965 by Max and Monique Nemni.

Unfortunately, Trudeau didn’t get rid of marketing boards during his long run as prime minister. Neither has any of his successors. The potential for change now comes because the federal government is, reportedly, willing to put supply management on the table if that’s what it takes to be seriously considered for membership in the Trans-Pacific Partnership trade agreement.

For Andrew Coyne’s forceful argument against the existing system of marketing boards, which forces Canadian consumers to pay inflated prices for basic food like eggs and milk, here’s the link to his Maclean’s story from this past August.




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A novice bureaucrat (and future PM) on supply management

  1. “Unfortunately, Trudeau didn’t get rid of marketing boards during his long run as prime minister.”

    Trudeau was a fascist, why would he get rid of marketing boards?

    In fact, when Nemmis write about Trudeau’s time as PM I am sure they will mention that it was Eugene Whelan, Trudeau’s Minister of Ag, who introduced supply mgmt in the 1970s because there was too much food and Libs wanted less. 

    My understanding is that many/most countries have subsidies for agri sector but Canada is unique in how we choose to do it. No other country, or at least ones we would want to emulate, has supply management system like Canada’s.

    Dairy Production: The Costs Of Supply Management In Canada:

    “New Zealand provides an excellent example of deregulation in the domestic agricultural
    market. In 1984, the New Zealand government eliminated nearly all agricultural subsidies, which went as high as 40% of farmers’ incomes. This was followed by deregulation of the domestic market, with elimination of the legal monopoly protection enjoyed by the various marketing boards ….  reform of the agriculture sector resulted in a significant return to organic farming and to a more diversified product range, with stronger export capability at world prices.”

    http://www.iedm.org/files/fev05_en.pdf

    • “Trudeau was a fascist…”

      Tony, dear, is it possible for you to put forward an argument without lobbing grenades like that?

      • Trudeau was proud of his left wing beliefs, he didn’t try to hide them.  If not fascist, what should we call Trudeau? 

        The Nemnis’ book, a model of scholarly rigour and research, reveals that as a youth and young man in the 1930s and early 1940s, Trudeau was no champion of democracy and individual freedoms. He was instead an ardent Quebec nationalist who, during the worst of the war years, admired fascist dictators, regarded reports of Nazi atrocities as British propaganda, plotted treason against the Canadian state and actively promoted a revolution to establish an independent Quebec solely for Catholic French Canadians.

        http://www.canada.com/ottawacitizen/news/citizensweekly/story.html?id=e72eeda6-6d2f-4586-8f28-822719408b23

        October Crisis:

        CBC Reporter: ”Sir what is it with all these men with guns around here?”

        Trudeau: ” There’s a lot of bleeding hearts around who don’t like to see people with helmets and guns. All I can say is ‘go ahead and bleed’ but it’s more important to keep law and order in this society than to be worried about weak-kneed people who don’t like the looks of…”

        Reporter: “At what cost? How far would you go? To what extent?”

        Trudeau: “Well, just watch me.”
        http://www.cbc.ca/history/EPISCONTENTSE1EP16CH1PA4LE.html

        • Tony, what do you do all day? How can you claim to be a decent conservative and yet spend so much time here as to appear to not have a job?

        • You’re smart enough to make your point without using nasty words. You’re better than that. I know you are. 

          • I doubt it. Tony has the certainty disease. Probably all absolutistists have it. Bertrand Russell pretty well thought it a primary failing of western civilisation – the desire to be dogmatically certain. To judge others with absolute assurance. Much easier of course when you just ignore context
            The only known cure for people like Tony is to climb down out of they’re playpen and try it for themselves ; see how tough it is to stiil have principles and yet still be an effective politician who still knows how to act on them. No, Tony’d rather sit up in his high chair and fling his food around.

          • “To judge others with absolute assurance. ”

            The irony here is really killing me.

          • Welcome back Gaunilion. I see you started off by missing the point… you think i’m wrong? You clearly haven’t read enough of Tony’s tiresome bilge. I thought you were rather attached to the principle of passing judgement where it is called for?

    • Don’t forget to use “Nazi” or “Commie Pinko”. BTW, they are political opposites.

      • “…. they are political opposites.”

        National Review ~ Are Conservatives Nuts? 

        Ever since Theodor Adorno came out with his scandalously flawed Authoritarian Personality in 1950, liberal and leftist social scientists have been trying to diagnose conservatism as a psychological defect or sickness. 

        Adorno and his colleagues argued that conservatism was little more than a “pre-fascist” “personality type.” According to this school, sympathy for communism was an indication of openness and healthy idealism. Opposition to communism was a symptom of your more deep-seated pathologies and fascist tendencies. 

        According to Adorno, subjects who saw Nazism and Stalinism as similar phenomena were demonstrating their “idiocy” and “irrationality.” 

        http://old.nationalreview.com/goldberg/goldberg200603220735.asp

        • That’s ridiculous – liberals have been hating tories and vice vesa way before Adorno brought his admittedly loopy theory out from under his bed.

  2. Price support for commodity surpluses is what the US does right now.  Whenever milk product prices fall below what the dairy farmers need just to break even, the government steps in and buys at a slightly higher price (Wonder where all that powdered milk for famine relief comes from?).  That money comes from taxes collected that could have been spent on other things rather than agriculture subsidies.  At least our current supply mangement is reasonably transparent. 
     
    I don’t know what the answer is, but we should take a hard look at New Zealand and Australia as they are having their own problems – monopolies, duopolies, prices wars, mega-farms, foreign ownership (Fonterra is setting up huge dairy farms in China)
     
     
    http://www.nzherald.co.nz/fonterra-co-operative-group/news/article.cfm?o_id=298&objectid=10744794
     
    http://www.theage.com.au/business/everyones-milking-it-for-all-its-worth-20110308-1bmk7.html 

    • Isn’t that an argument for only carefully negotiating away our system? 

  3. It is a total myth that Canadian milk has priced itself out of the market. When all support provided to US and European dairy farmers is totalled up, supply management turns out to be very competitive. In fact, it is an excellent system that produces high quality milk at reasonable cost, while permitting farmers, who work 365 days of the year, a living wage! Unlike the US and the European Union, Canada does not subsidize dairy farmers. The situation has become so bad in the US that in 2010, dairy farmers received subsidies of $4 billion, a huge amount of cash. That comes directly from taxpayers. So they pay twice – once at the supermarket and again through taxes. It seems that American farmers can’t produce unless they get massive subsidies from government. Supply management also provides Canada with dairy security and is a sustainable system, ensuring that small villages in the countryside remain viable. 

    There is now talk that the NZ system is unsustainable as it moves into climatically unsuitable zones and adopts the attributes of industrial agriculture, leaving behind the sustainable  family farm.  As well, NZ operates a single desk system, like our old Wheat Board before its demise was announced. About 95% of dairy farmers in NZ sell to Fonterra, their massive co-op, which then finds markets around the world for NZ dairy products. Presently, milk prices are higher in NZ than in Canada because global prices for dairy are high. The New Zealand government views milk as a commodity, much like Canadians see copper or oil, and domestic prices in that country reflect the state of the global market. We see that with oil in Canada. In NZ, because global prices are now quite robust, so milk prices are higher for them than for Canadians. Surely we don’t want that.

    Neoliberal ideology is the only reason I can see as to why some critics want to get rid of supply management. The system works extremely well and provides a great product at a price Canadians can afford. It also includes the farmer in the mix, unlike other regimes. However, as those neoliberal critics complain, supply management thumbs its nose at “the market.” But what has the market brought us? Financial collapse and on-going depression? Instead of letting food speculators or huge American and European agrifood enterprises set our prices, we do it ourselves to ensure that all interests are represented. And if you think that prices for Canadian dairy products would fall if we got rid of supply management, I think you are very mistaken. Talk to Ontario’s pig farmers, who lost $40 per animal shipped following the 2008 collapse of pork prices. They never went down at the supermarket.

    • Yeah  that happened with beef too around the time of mad cow – farmers lost their shirts out west – why is that? Greedy middle men or what?

    • What a pile of rubbish.  The only myth here is the one you attempt to propagate.

      Canada’s marketing boards exist for only a slice of the farming community. And the price of milk, eggs and cheese are pretty high in Canada, compared to places like say, London or Amsterdam.

      A dairy farmer in Canada with a 100 cow quota is worth $2.5 million even without the land and equipment taken into account. There are dairy farmers in the Netherlands with herds 10 times that size and they are still just dairy farmers.

      And please drop the nonsense about safety and quality. Have you ever been to a cheese shop in Europe? Or paid for imported cheese in Canada?

  4. “That’s from the six-page memo “On Price Support for Commodity Surpluses,”

    What was the complete context of that quote JG? Was Trudeau only talking about limited price support for commodity surpluses? It sounds like it. Wonder why he allowed it too take on a life of its own – presumably it became a political issue later on, one he culdn’t easily ignore. 

    • You know, you might be right about the limited context. I’m afraid I just have that short quote. I happened to be reading the new Trudeau book (review to appear in a coming issue of Maclean’s) and happened upon this bit just as the issue of supply management surfaced in the news. Posted on it as a curiosity only. Although, if you’re broadly interested in Trudeau’s early economic policy ideas, the Nemnis’ have done a great deal of thorough research.  

      • Thx for replying. The sheer scale of Trudeau’s fingerprints on the subsequent life of this country is quite simply astonishing.

        I look forward to reading the Nemnis’ book.[ being a bit of a Trudeaphile myself as distinct from a died in the wool Liberal]
        Just finished RG’s last act. Quite fascinating.
        Do you by any chance have any idea or info relating to the ’71 Victoria conference; the one where according to Mulroney Trudeau offered distinct society status to Quebec, which made Trudeau an utter hypocrite [.according to Brian] when you consider Trudeau’s objections to Meech? I haven’t had any luck trying to find an authorative opinion on this…but then i’m not much of a reseacher.
        Cheers. 

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