Sacred cow: Local dairy farmers argue that supply management

Feds assure dairy will be protected

Trade talks: Canada called on to end supply management.

Despite pressures from trading partners, Okanagan MP Colin Mayes says the Canadian government will continue to defend its supply management systems for dairy, poultry and eggs.

Speculation on the fate of the nation’s supply management systems arose following the recent APEC meeting in Hawaii, where Prime Minister Stephen Harper announced Canada wanted in on talks relating to the Trans-Pacific Partnership free trade agreement, stating all issues would be on the table for negotiation.

Potential trade partners, particularly New Zealand, were quick to target Canada’s supply management system that protects thousands of dairy, poultry/egg farmers  through high tariffs, and the allocation of quotas that meet local consumer needs.

New Zealand’s trade minister Tim Grosser has gone as far to say Canada’s entry into the trade talks could depend on whether the country agrees to eliminate tariffs and get rid of supply management.

Canada is facing similar pressure in trade talks with the European Union. And even pundits at home have jumped onboard, criticizing the 40-year old supply management system as protectionist, while arguing it discourages foreign competition, that the high cost of obtaining quota is prohibitive, and that dairy and egg prices are artificially high.

Despite these criticisms, Okanagan-Shuswap MP Colin Mayes says the federal government has been defending supply management in all its trade negotiations and will continue to do so.

“I know Canadians would like to see a free market system, and see what they think are better prices for dairy and poultry and that, but the fact is, if we were to subsidize… to the level that the Americans and Europeans subsidize their agricultural industry, we would have to put out $80 billion a year, just so our farmers can be competitive,” says Mayes, noting there differences in Canada’s economy, such as fuel tax, that add to the cost of farmers bringing product to market.  “So we need to ensure, through the supply management system, that they can be competitive.”

Sicamous dairy producer, Chris Dewitt, is supportive of the supply management system. He says it creates stability in the market while enabling producers like himself to meet the needs of the domestic population and make a living, without having to go to the government asking for a hand-out. He says that without supply management, there would be a tendency for farmers to produce more milk to make more money. The result of this can be an excess supply that doesn’t benefit the consumer, but devastates the farmer. Examples of this, says Dewitt, have been seen in Europe and the U.S., where farmers have wound up in debt and subsequently gone out of business.

“That’s kind of why we like supply management. It’s expensive to get into a supply managed industry, that’s a downside,” says Dewitt. “But, other than that, once you’re in it and you’re established a bit and work at it, you can make a living. You don’t have to worry about the price of milk so much because it’s set by the government.”

On the processing side of things, Jake Dewitt, Chris’ brother, doesn’t see any benefit to moving away from supply management. He says the current system guarantees he’ll have access to milk as needed. This, Jake says, is because the system is able to predict years ahead of time what the need will be, without having to be concerned with fluctuations caused by imports or having to export.

“So they have a steady demand and a steady supply and everybody benefits from that because, don’t kid yourself, everybody who does not have supply management, they subsidize their farmers,” says Dewitt. “And whether it comes out of the consumer’s pocket, or the government pocket, it comes out of the people’s pocket one way or another.”

Jake speculates that without supply management, smaller operations such as his own would disappear, leaving dairy to the large conglomerates.

“You’re not going to have little guys like me doing it because I simply couldn’t compete,” says Jake. “People have got to decide what they want. Do they want their stuff produced locally by people they know, or do they not care?”

Dairy Aisle

The mixed messages regarding trade talks and supply management have not affected Lorne Hunter’s confidence that the federal government will continue to support the quota-based system. A director with the BC Milk Producers Association, Hunter said he has seen the issue come up in past trade talks, but says the Canadian government has been very clear in its support for supply management.

“It’s an agriculture policy that has great benefits for farmers, consumers and processors,” says Hunter. “It is unique to Canada, but it’s unique because it works.”

Chris Dewitt points out that the majority of quota, about 45 per cent, is in Quebec and Ontario.

“So I think it would be a stretch for me to see the federal government get rid of supply management in dairy because I think the Quebec guys would just raise hell,” says Dewitt.

 

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