Why supply management works and why Canada should keep it!

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The deal is underway. The federal government announced last week that Canada has been accepted into the Trans-Pacific Partnership (TPP). Prime Minister Stephen Harper has failed to divulge if this means that the supply management system of the dairy and poultry industry is on the chopping block. Meanwhile farmers and farm organizations across the country, including the National Farmers Union in New Brunswick (NFU in NB), are speaking out.

“Supply management is the system we use here in Canada to make sure that there is always enough for Canadian consumers, and so we don’t end up dumping excess production down the drain,” said Randall Affleck, NFU Regional Coordinator and Maritime dairy farmer. “It is set up to make sure that we farmers are paid a price that covers our cost of production. By controlling imports through tariffs, supply management keeps foreign companies from dumping their surplus in our market. It’s a win, win, win situation. The government is right to keep it off the table at trade negotiations. I hope they stick to their guns,” he added.

Processors are also provided with stability and predictability of supply and price.

Supply managed sectors are distributed across the country, with farms and processing jobs located in each province. Without supply management, taxpayers would end up paying twice for their poultry and dairy products – at the store and through increased government Business Risk Management program costs.

“With supply management we don’t need farm safety net programs that are triggered by market volatility, programs which are essential to the survival of non-supply managed farms,” Affleck explained. “In a completely deregulated dairy market, subsidies would be required, or else family farms like mine would struggle to survive if our market were flooded with cheap imports from US and New Zealand companies trying to get rid of their surplus.”

The Canadian Restaurant and Foodservice Association recently launched a campaign declaring that consumers would have to pay less for milk and dairy if only supply management was dismantled. Meanwhile, out of a $2 glass of milk sold in a restaurant, the Canadian dairy farmer’s share is only 21¢. For a typical cheese pizza sold for $18.50, on average only 69¢ goes to the farmer. Who’s getting the better deal, the farmer or the restaurant owner?

Under supply management, restaurants have the opportunity to guarantee a high quality product to their customers. If Canadians want to continue to enjoy their familiar high quality milk, dairy products, poultry and eggs, then supply management needs to be maintained.

Supply management has resulted in a stable farm sector nationwide for four decades. The amount farmers invest in quota is a measure of the viability and profitability of efficient family farms in Canada. If the family farm is no longer profitable, Canadian dairy sector will soon resemble that of the US, where large operations milk 15,000 cows daily and 1,000 to 5,000 cow herds are common.

“In the province of New Brunswick there are 214 dairy farmers registered with Dairy Farmers of NB, and 50 producers involved in raising poultry and egg production (Statistics Canada 2011 Agriculture Census),” explains Mel Jellett, Executive Director of the NFU in NB. “And each of these producers will be adversely affected if supply management is jeopardized in the process of signing the TPP.” The NFU in NB feels that the supply management is a system that works. Its demise would be a sour deal for farmers and consumers alike.

(NFU in New Brunswick)

 

Organizations: NFU, Canadian Restaurant and Foodservice Association, Statistics Canada 2011 Agriculture Census

Geographic location: Canada, New Brunswick, US New Zealand

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  • Amy
    June 28, 2012 - 21:25

    Well Said!! Keep Supply Management!!