Defend, reduce or scrap

The government was fairly adamant yesterday that it would defend supply management. Steven Chase imagines how they might reduce tariffs without abandoning the system entirely. Stephen Gordon considers how difficult it would be to scrap it.

The ideal solution to the problem would be to invent a time machine, go back to the 1970s, and tell policy makers what a terrible mistake they were about to make. Sadly, this is not possible. So how can we reduce dairy prices without ruining present-day dairy farmers who bought their quotas in good faith? One option — as described in this CD Howe proposal — would be to slowly increase the number of quotas over a long period of time, so that they gradually lose their value. When they are essentially worthless, there would be little loss in abolishing them.