Canada's Supply Management

A nation's food security is vital, and efforts by a national government to support primary agricultural producers seems a reasonable and prudent course of action.  Guaranteeing farmers a decent living through supply management to ensure that the country has a stable and reliable source of food makes good sense.  And when supply management through federal government controls became the norm, it aided small family farms to ensure they could continue to operate successfully and that Canada could be reliant upon them.

A new survey and internal analysis done by Agriculture Canada, however, illustrates a changing world.  The good intentions that led to supply management and guaranteed incomes for small family farms has evolved into a wholesale loss of small family farms and the growth of large commercial operations.  High-priced operations owned by large companies.  So it hardly seems reasonable, that under those circumstances, Canadians are subsidizing the bottom line, through high prices resulting from supply management, for large industrial corporations.

It wasn't that the government was as much interested in tracking what is happening with the supply management system so long in place.  More that they were testing the waters because of an aspiration to enter into negotiations to join the free trade negotiations for the Trans-Pacific Partnership.  Countries like New Zealand, Australia and the United States have been openly and forcefully critical of Canada's supply management, although most countries including them, do subsidize farm products.

The most heavily protected farm zones are dairy, poultry and egg sectors.  Canadians pay quite a bit more for those food categories than say, do Americans for the same products.  And this is all due to the supply management system.  "The original intent of supply management was to protect family farms, but the intent and outcome are just worlds apart", explained the managing director of the Ottawa-based think tank, the Macdonald-Laurier Institute.

"We've seen the emergence of a quite privileged and very small class of farmers who have this special legal right to control the supply of what they produce, and therefore maintain a high price at the expense of consumers."  According to their figures, dairy farms have dropped in number by 90% since the system was first inaugurated.  Now, large producers have an incentive to acquire quotas and have in many instances taken over from the small family farm.

A lot of concentrated lobbying takes place to put pressure on politicians to support the existing system.  That it has created a strong dairy, poultry and egg production network is a plus for the country, and obviates the need for government to apply subsidies common elsewhere.  On the other hand, the issue is now complicated from the time supply management was meant to benefit the family farm and the Canadian consumer. 

Large corporations should not be able to qualify; the quota system should ideally apply only to small family farms, because large corporations do very well on their own, they've no need to be shielded from competition.  On the other hand the Dairy Farmers of Canada claim that 99% of dairy farms remain family-owned and operated "even the larger ones".

Something isn't computing properly here.  83% of poultry producers, 73% of dairy producers and 46% of egg producers have farms valued at $250,000 or more.  Only 30% of all farms across the country, inclusive of those three sectors are valued over $250,000.  58% of poultry, 42% of dairy and 33% of egg farms are owned by companies, compared with 21% for all farms across Canada.

Because of our Canadian climate it is more costly to produce milk in Canada, about double what it costs in Australia and New Zealand.  Agriculture Canada should be putting their bureaucratic bright heads together to properly analyze these sometimes-contradictory figures and come to a reasonable working conclusion of what might work better to the advantage of small farms and the public.

X-out the corporations, they can look to their own resources.