Milk management fee

by Aaron Wherry

Barrie McKenna explores the government’s attempt to support both the free market (when it comes to the Canadian Wheat Board) and supply management (when it comes to dairy farmers).

If open markets are so clearly in the best interests of grain farmers in Western Canada, why aren’t they also good for the dairy farmers of Quebec and Ontario? The answer, of course, is politics in a country where rural areas are still overly represented in the House of Commons. Supply management has become a proxy for rural entitlement and protection of family farms – a message that helped the Conservatives to a sweep outside the major cities in Southern Ontario in the May election. And by retaining the regime, Mr. Harper presumably calculates he will keep those seats four years from now.

There is no sound economic or policy rationale for keeping supply management. The government is sacrificing the interests of 34 million Canadians for the sake of fewer than 15,000 dairy and poultry farmers … Every year the distortions caused by the system grow larger. Canadians may not realize it when they go to the grocery store, but they’re paying twice the world average for dairy products – and up to three times what Americans pay. That’s a hidden $3-billion a year tax on all of us.




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Milk management fee

  1. Quite true….and the only reason it occurs is because of vote-buying.

    ‘rural areas are still overly represented in the House of Commons’…even though farmers are now only 2% of the population.

    ‘There is no sound economic or policy rationale for keeping supply management.’…for anybody.

  2. I-Can’t-Believe-It’s-Not-Hypocrisy

  3. Wherry quoting a position that is fiscally conservative?  Is this April 1?

    • He often quotes positions that are small-c conservative.

      Just usually they involve things like accountability and transparency.

      • Accountability and transparency are neither conservative nor liberal issues, unless for some bizarre reason you wish to suggest only conservatives care about accountability!

        And no, he never quotes positions that are small-c conservative, at least he didn’t until today.

        • Bull. He frequently quotes younger Stephen Harper, etc.

          • Bull. He quotes Harper not to advocate Harper’s positions, nor any other conservative position at all.

  4. There are problems with supply management – but there are many problems with not having it. Certainly, any intelligent society will ask why we set up a policy and identify a replacement policy that is better for all parties, before just being rid of it. 

    The statistics show us that  Canadians pay a smaller percentage of their
    income on food than anyone else. That’s small comfort to low income
    Canadians who struggle to pay every bill, but compared to Europeans, and
    certainly Asians, Canadians get a pretty good deal.

    Yes Canadian do pay more than Americans for  milk and dairy products
    (the difference varies by location), but there are two important points
    to be made here. One is that Americans pay twice for milk:  once at the
    supermarket checkout, and again as taxpayers through the multi-billion
    dollar  U.S. Farm Bill that sends government support cheques to farmers
    under a variety of programs (these are actual production subsidies for a
    list of grains, feedgrains and oilseeds, not the kind of disaster risk
    management programs in Canada).  Canadians on the other hand just pay
    the once at checkout.

    • On the other hand, at least the US system has the benefit of being more transparent.  If the folks in the US really don’t like what they’re paying in taxes to the milk industry, they can address that directly. How do we in Canada handle it?

  5. Cities Feed Farmers!

    • Finally someone cut down the forest so we could all see that tree.

  6. Within about 5 miles of where I live there are maybe a dozen dairy operations. Most are owned
    and operated by the families of Dutch post-war immigrants who received some government
    assistance decades ago to help with the start up phase. They are currently self sustaining and
    relatively prosperous due to reinvesting of returns in modernization and mechanization. These
    families are very involved in the community and, though more conservative than I would like, are
    respected and valued members that contribute a lot to their neighbours.
    I, for one, am prepared to pay a bit more for milk to support a system that allows for a more
    fully functioning society rather than a factory farming operation somewhere in Missouri.
    Economic efficiency ain’t everything. It’s only one thing.

    • The quota system doesn’t benefit these farmers. The only tenable solution is to buy back the quota at about market rates and liberalize the market. Also, your point might be valid if we weren’t factory farming in Canada. If you want to discourage those practices, lobby for bans or taxes on those activities and set up a compliance scheme. I have no problem requiring all imported milk meet Canada’s food safety standards.

  7. I don’t want to deprive farmers of making a good income – however – up here in the NWT 4litres of milk sets me back $7.25 or so after deposit; and i don’t live in the Arctic – i’m scared to ask what they pay. I have heard nightmare stories of a jar of cheesewiz costing $25 when the govt screwed up by changing its Northern food subsidy programme.[ banning cheesewiz was an attempt to induce healthier eating, but it back fired - people love it - go figure. I thought only liberal govts attempted that kind of social engineering]. Granted transportation costs are high but that doesn’t cover it all. We are only 3 hrs by good highway from High Level AB where the costs are considerably cheaper.[ gas price difference can also run to 30cents a litre...profiteering ??? Who knows the trade barriers between various parts of this country sometimes make me wonder if we are a country or rather a federation of squabbling self interested fiefdoms.]
    High living costs are part and parcel of living in remote parts of the country and higher wages and Nothern living allowances help alot, but honestly $7 milk is a scandal. 

    • So removing subsidies for food is social engineering?

  8. There are a lot of farmers who wouldn’t mind an opening up the of the supply management system, namely those that want a more diverse operation, but can’t sell dairy and poultry without a massive buy in for a quota.

    Supply management is great if you already have a quota, but it sucks if you don’t.  As this article makes clear as well, supply management favours one region of the country (Quebec and Ontario) over the West.

  9. The Current had a segment about this very issue this morning which you can access here: http://www.cbc.ca/thecurrent/episode/2011/10/24/dairy-supply-management/.

    One interesting thing I hadn’t thought of but heard this morning is that the low prices for cheese, for example, in the U.S. are actually paid for twice by American consumers, once at the check-out and again when they pay their taxes which go to huge farm subsidies.

    Gave me something to think about.

  10. Right then.  So we are coming around to understanding the CWB was and is stupid, and dairy supply management should be next in the crosshairs.

    Things really are looking up for our country.

  11. You do realize that there are hardly any farmers left in the US right? Number has dropped by over 80% in the last 20 years. That milk is imported from New Zealand and other places in powder form then water is added, packaged, and sent to the grocery store for you to buy. That’s because the US killed its farming industry with free market. Allowing for cheap dairy products to be shipped in from overseas. The exact same thing is going to happen in Canada. Only the big “farms” will survive. No small farms, just big factory style farms, where all the animals are crowded into barns milked or slaughtered for the cheapest possible amount so as to create a revenue. Enjoy your cheap milk.

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