“Supply management largely meets its stated goal of improving producer incomes,” says Glen Hodgson, senior vice president and chief economist at the independent applied research organisation. “But it also prevents milk producers from capitalising on opportunities in global markets, while thwarting Canada’s international trade objectives and reducing competitiveness and innovation.”
Most Canadians are unaware of the elaborate behind-the-scenes machinations involved in the dairy supply management system. Since the 1970s, agencies under government authority have set the prices that farmers receive for their milk, and limited production through quotas to match anticipated Canadian demand for milk, cheese, butter and other dairy products at those prices. To maintain high farmer milk prices and not undercut Canadian production, most dairy imports are restricted by tariffs of between 200 and 300%.
The report – Making Milk: The Practices, Players, and Pressures Behind Dairy Supply Management – finds that the system:
The supply management system has other effects: distributing benefits unfairly, as buyers of dairy products pay more and effectively subsidise dairy producers; becoming a dairy producer is difficult, since it costs about $28,000 just to buy the right to sell the milk of roughly one cow; and reducing the international competitiveness of many dairy processors.
This study forms part of the ‘CanCompete’ project – a three-year Conference Board programme of research and dialogue designed to help leading decision makers advance Canada on a path of national competitiveness.
Source: Conference Board of Canada
© FoodBev Media Ltd 2024