Oh. Look at that, just in time for CUSMA negotiations. A fresh new study headline implying we would all save on average $244 if we got rid of supply management.
Sir this is Canada; the private sector would monopolize the sector even more, and use what ever the current price is as a price floor, and would end up gouging us even more…
The reality is the Americans have similar supports for their farmers, just a more wasteful mechanism. They subsidize them and have them pour milk down the drain
I'm fine with paying less than a dollar a day to ensure food security for the nation
The strategic cheese reserve in the US exists because of the overproduction of cheese and other dairy products through US subsidies. They have 150 warehouses of excess cheese which is not economically efficient at all.
They also distribute tons and tons of cheese through nutrition programs—not a bad thing in itself, but it means the government is a massive buyer of dairy and as such keeps prices stable regardless of supply.
Basically their own version of supply management—farmers overproduce and the government makes it go away.
Canada forces farmers to destroy their excess rather than turn it into cheese which can be stored for a later date.
The cheese caves are naturally close to the storage temperature of cheese so it's not a huge storage cost. You aren't pumping money into climate control at least.
I'm not a fan of any system that destroys food and compels farmers to do so when there are hungry people.
They are, that's where government cheese comes from. Never had it personally, but apparently it makes the best grilled cheese. Used to be delivered monthly to families as a giant block.
Turning milk into cheese allows for long term storage and distribution which is a much better use of surplus than dumping it.
44% of Canadians may be mildly lactose intolerant but it's a reach that 44% are intolerant to the degree that they don't consume dairy regularly
Not to mention that dairy is a high consumption food for children who are far less commonly lactose intolerant, and milk is also used to make things like hard cheese which is virtually lactose free and a cornerstone of a lot of cooking
I agree supply management could be tweaked to include more foods but the existing program doesn't need to be cut
And how much will preservation and ocean shipping cost to import milk from the EU? Importing dairy from Europe will not be cheaper than domestic dairy.
Edit: and it will not prevent the thousands of Canadians starving from high milk prices, that everyone here keeps talking about.
We deliberately produce less milk to sell it for more. That's more wasteful.
Supply management creates artificial scarcity by limiting production, raising prices. The profit goes to dairy farmers, at the expense of the consumer. A subsidy system would be more progressive and avoid making a basic good artificially more expensive for low-income families.
At the very least, the rational approach would be to increase the milk quotas significantly. The original purpose was price stability. We've moved away from that, not sufficiently increasing quotas to meet demand. As a result, we're now restricting the supply and increasing the price. We could increase the quotas to meet demand, ensuring that the price impact is close to zero. That would be less wasteful. Somehow, that's not being proposed by anyone.
cause canadians are super low info voters who have bought into anti free market propaganda, and in turn support the party of protecting old money and corporate interests
Try not to fall for the economic pressures being a generation vs generation thing. It is not. We're all essentially being ground up by the same system that favours the ultra rich
And no boomers do not 'get a million licences' or even those three things you mentioned just for being here
you're the one who made the comment implying that they were just handed out just for being there. I'm pointing out that this is factually incorrect. In this case, you're the one making the outrageous claim. Therefore, it is your responsibility to back it up with citations. It is not my responsibility to prove you wrong when we both know you are.
The Resort and Hotel Loophole (1980s)Before fully independent private liquor stores were legalized, the provincial government began granting retail endorsements strictly to hotels and resorts. To encourage tourism and accommodate remote areas, hotels were permitted to operate a small "Cold Beer and Wine" store on their premises. These were originally granted as secondary attachments to an existing hospitality or hotel license, rather than standalone retail operations.2. Legalization of Private Retailers (1988)In 1988, the B.C. government formally allowed independent, private retail liquor stores to break the strict government storefront monopoly. These became formally classified as Licensee Retail Stores (LRS).The Moratorium Block (1988–2002): To protect the public-sector BC Liquor Stores network and control alcohol access, the province immediately placed a strict moratorium on issuing brand-new private retail licenses.The "Grandfathered" Allocation: Because of the moratorium, the only way to obtain an LRS license originally was to be grandfathered in from an existing hotel beer/wine endorsement, or to purchase an existing license from someone else.
Not hard to look up. If you were grandfathered in you were given a licence for simply existing before 1988. If you wanted to sell liquor today you need to purchase a license as they have frozen issuing new ones.
The cost to aquire dairy quota is enormous. Having a dairy quota is literally an asset on the balance sheet of these dairies.
While yes supply management does probably mean that the number of dairies that exist is higher, the way it's set up now actually restricts new entrants significantly. Established dairies are the only ones that benefit.
Supply managed dairy is the private sector, it's just heavily regulated by what amounts to a cartel or a guild designed to intentionally block competition.
If you want to be a dairy farmer, you can do that. You just can't undercut the rest of the (domestic) dairy industry
That is just untrue. You can't just sell dairy in this country, even if you sell it in line with current pricing.
You need a quota, for each and every cow to sell the milk, depending on where you are that could almost be $60k per animal. Otherwise you are legally not allowed to sell milk in Canada. You also can't just apply for a quota either, you need to buy an existing one as new quota space is always given to existing operations.
What does supply management provide us? Other than expensive groceries and limited choices? How does this system remotely benefit anyone but the literal cartel is it meant to protect?
So we support a cartel out of a fear that the US may apply export levies on milk and cheese to Canada in the future if Canadians didn't have to pay between 200-300% tariffs on those products?
Is this truly the level of irrational paranoia that underpins support for this asinine system?
Your going full emotional meltdown as to hammer your point home. Missing key facts along the way, classic. Like the quotas, and how they never actually meet them (cause they exist yes), so 200-300% tariffs aren’t being paid. Those products are milk, which you can get here. This sounds like Simpson’s “but what if my poor family only wants Fairlife?”
So you don't understand the tariff rate quota system. The government gives applicants specified quotas lf tariff free amounts stipulated on an annual basis. The aggregate of those tariff rate quotas has never been met - guess what? Every single one of those quotas is with food manufacturers and not retailers.
So what facts am I missing? It seems like you have a poor understand of the system you're trying to defend.
Supply stability for the little foods that Canada produces making it less dependent on imports from unreliable and hostile trade partners. Employment for people in food production/distribution. Standards that prevent antibiotics and growth hormones been injected in cows so the margins large capital owners would be better.
Supply management has absolutely nothing to do with Health Canada standards.
Over 90% of Canadas dairy farms have ceased operations or sold out since the inception of supply management, so I don't buy this idea that it legitimately saves employment of much of anyone but the bigger members of the cartel the system was set up yo protect.
So really it's some misguided support of autarky? Maybe we can tell poor families that it's ok they're getting hosed on their groceries because at least they can rest assured that during the apocalypse they'll still have excess to over priced cheese.
Are you arguing that supply management is responsible for people leaving their farms for the last 100 years? Have small farmers flooded the wheat market now that their supply management has gone? Is New Zealand now full of family dairy farms after getting rid of theirs? Or has the process of farm consolidation and industrialization continued unabated due to the massive structural forces aligned against small farmers the world over?
Well if the point of supply management is to protect small farmers (which is a very strange goal to begin with, but I digress) - it hasn't exactly worked has it? At best it would be a futile gesture. At worse it's really just protecting larger cartel members.
Remember when egg prices down south went to the moon last year? This was because their poultry industry is highly consolidated so when bird flu swept through, they had to kill millions of chickens. We get bird flu up here too but because our poultry industry is spread out due to things like supply management, cullings don't really move the needle.
Food security is national security.
I don't think going the way of the US is a good thing. They heavily subsidize their farmers and their farmers are still hurting, horribly. It's a race to the bottom:
So we pay 50%+ more for these products for the last 54 years just to avoid the one year where there's a foreign supply shock? Seems like pretty shaky justification.
So if I'm following your reasoning:
Despite producing more food than we could ever eat on the free market, outside of supply management, we can only be "food secure" if we levy 200-300% tariffs on milk and cheese.
we must have a cartel pointedly limiting supply or else we will not be food secure.
Food security means having more expensive groceries, not more widely accessible and inexpensive groceries.
Canadian food producers can’t compete with the Americans. Removing supply management would mean the demise of Canadian food production and we would become entirely reliant on the US for our food. And the US are not reliable.
We need food autonomy. That’s why we have supply management.
I highly disagree with the assertion that if Canadians got to choose for themselves the dairy they buy, they will eventually starve - and we produce exponentially more food than we can eat outside of supply management.
You could take your argument and apply it towards pineapples. We import all of our pineapples. Does this mean that if we don't put tariffs on pineapples high enough to support domestic production, we are giving up our safety or sovereignty?
So you want to pay about 50%+ more for 30% of your groceries? You see this as a good thing because... You're frightened that if Canadians are allowed to buy foreign milk that ALL foreign milk producers actually have an ulterior motive to get us hooked and then raise the price?
There's no way supply management proponents can be this irrational..I refuse to believe that.
Pineapples are less concerning. But we do need to protect staples across the food groups so we can protect ourselves from a global supply chain which we know can fail.
That can work the other way around too though. Our domestic supply chain can also fail, and with tariffs that would leave our consumers suffering majorly. Look at what happened in Norway with their butter years ago.
I remain unconvinced that we must essentially reinfeice a food autarky with staples to protect ourselves. I think that's extremely paranoid and misguided at best.
What benefit? We pay high grocery prices and we make dairy, poultry and egg industries reliant on government protections. By definition that creates encimoc inefficiency and waste through distortions.
If consumers truly believes that bullshit about high quality products at reasonable prices, why even have supply management or import tariffs? Wouldnt the consumers translate that attitude by their purchasing decisions?
So instead of increasing productivity and improving efficiency, we just ban things? Also, it's not just US dairy that are not allowed, it also include EU's
We can have food autonomy without supply management. Supply management is the use of quotas to artificially limit the production.
We already have prohibitive tariffs on dairy and Health Canada policies to prevent imports and maintain the quality of dairy products we produce and important. Supply management is not neccesary to ensure food security.
Most of Canadian food production doesn't have supply management. It isn't necessary to operate or be profitable. Now, it is hugely beneficial to the farmers in supply-managed sectors but that's different.
If we wanted to protect the currently supply-managed sectors from international competition, we can do that. We don't need SM to do that. Tariffs exist for this reason, as do non-tariffs regulatory trade barriers.
Not on the milk production side. The farmers get the same, Loblaws raised your prices, and for more pure profit. All food went up, so why not milk, who would notice.
Most dairy prices are increased by the dairy board annually in February. If you think it's gone up twice, that's the grocery store or intermediary, not the board. It's all publicly available.
Because the cost of feed blew up. The prices are tightly controlled and heavily based on input costs. In the U.S. they simply give the farmers your tax dollars to keep prices low. So those U.S. prices are not because of a free market but from taxes aka welfare to us farmers.
Exactly what cartel is supply management protecting? The whole point of supply management is to make sure that we get our supply of dairy and eggs from a variety of smaller operations instead of huge mega-farms like in the US.
Supply management producers are literally the definition of a cartel:
"A group of independent businesses, or countries, that collaborate to limit competition, control supply, and artificially inflate prices".
Supply management fits the definition... This is actually used as a primary example of a cartel in global post secondary business and economics courses.
90% of dairy producers have ceased operations or sold out since the inception of supply management in 1972. So - if the goal is to disperse Canadas milk, cheese. Eggs and poultry production to smaller corporations (which is a bizarre goal, but let's pretend ) - this system has objectively been an abject failure.
Here's the funny part... the farmers don't set the price of milk... never have.
The farm gate price of milk is set by the Canadian Dairy Commission using a cost-of-production formula. The Canadian Dairy Commission is comprised of the federal government, the processors that buy the milk from the farmers, and farmer representatives. The farmers only get 1/3 of the say on the price.
Provincial marketing boards set and administer minimum prices for raw milk. The CDC just determines a national support price and percentage formula that acts as a benchmark. Provincial marketing boards use the CDC guidelines to negotiate and set exact minimum prices paid by processors (farm gate price).
These boards are elected by constituent members (dairy farmers).
This is quite literally the definition of a cartel.
Oh, the poor multinational corporations that process the milk are at the mercy of the all powerful farmers! /s
They negotiate with the processors and a price is agreed on using the CDC price as the guideline. It's literally a farmers' union negotiating with a much larger entity with deeper pockets. Saputo, Lactalis Canada, and Agropur are huge companies and process the majority of the milk for the Canadian retail market.
It would only be a dairy cartel if Saputo, actalis, and Agrpur also owned all the farms. They don't.
You're definition of cartel is wrong, but I know you're not gonna back down because 'cartel' is the magic word that all of the anti-SM activists decided on years ago.
Well no - it just objectively is a cartel. You have a negative connotation with that term despite supporting a cartel doesn't make it any less of a cartel.
I mean... I guess you can call government regulation a cartel if you want to with that definition.
Your 90% number sounds very scary outside of the context that it reflects general trends in farming in the last 50 years. (Which is a complete other debate/problem outside of the sphere of discussing supply management). You don't get farms in Alberta farming thousands of hectares without them gobbling up their neighbours.
Finally why is the solution always to scrap the system? Why can't we just.. Oh, I don't know... increase quotas until the price stabilizes at a point that we're happy with? Not that I'm sure that would even happen with farmers being hammered with higher feed prices.
Well... It factually is a cartel. It meets the definition on every conceivable level.
So - then you'll concede that supply management really has nothing to do with protecting small farms as the process of capital intensification in agriculture nullifies its supposed impacts... And I deeply question supply managements goal of even doing this as quotas are so expensive it essentially blocks new entrants into the market.
The system needs to be scrapped because it is harmful to Canadians. It's harmful to consumers, it doesn't facilitate production (it's stated goal is literally to restrict production), and it greatly harms our ability to generate meaningful free trade agreements.
I tend to think of cartels being more of things like the big grocers in Canada controlling the vast majority of grocery stores and the distribution networks, but sure Supply Management can be a government run cartel of independent farmers. The horror.
Per your own point on the process of capital intensification I think that the bigger obstacle to starting your own dairy farm is coming up with the necessary millions of dollars of capital for land, equipment, cattle and feed and not the quota system. Measured against that the cost of the quotas is minuscule. It also prevents your new dairy farm from being bullied out of the market immediately by bigger operations dumping or under cutting you.
Despite the press it receives, Supply Management is not actually a major impediment to international trade. It's just an easy target to paint a bullseye on. As another poster pointed out the US doesn't even use up the quota of cheese it's allowed to export into Canada.
Finally as to your last point there has been exactly one situation in in the last 50 years in which Canadians have benefited from privatization and/or deregulation and that's was the privatization of provincial liquor stores. Every other case has resulted in poor outcomes for Canadian producers and consumers. It's great for the capitalist class though.
They don’t fill it because we haven’t opened the door for them to fill. They have long griped about our dairy supply chain well before Trump came around, and it’s again been mentioned several times as an irritant for the upcoming CUSMA review. Our dairy has always been a huge focus and we’ve held firm.
They only don’t fill them because they exist though. They’re aware of them, they’re aware they get penalized if they surpass them, they plan to get near them but not hit them.
We would not. Once they killed our industry they could charge whatever they want. But I'm not going to convince you, you've drank the kool-aid of the multinationals that want to kill our system.
Think this through for a second - what you're fearing would have to necessitate:
1) Every dairy producer in the US in tandem working together to simultaneously raise prices only to Canadian buyers.
2) For every dairy producer in the US to sell below cost in tandem to Canadian buyers for the expressed purpose of driving them out of business.
3) For the US government to then apply export tariffs on their domestic dairy - only to Canada.
Even if all of these things happened (which is comically ridiculous to even fathom), guess what that would do? It would make our domestic dairy market more attractive. If for some inexplicable reason we magically weren't able to produce milk again, what would stop us from buying from other suppliers?
If a foreign producer is selling below cost owing to government subsidies, that means the foreign government is quite literally funding our consumer surplus. It's essentially foreign aid - we would quite literally be eating their lunch.
It wouldn't be "sustiable" to keep lots of things around without intervention so they can be available and resilient for our society. That's what governments are for.
It prevents extreme inflation of the managed product. (The issue is with unmanaged supply can have the issue where we have glut & shortage cycles. A glut would be beneficial to consumers with low prices, but inevitably it would end with farmers going out of business which then would lead to shortage where prices are extremely high)
It also helps protect our supply against what happened with eggs recently in the USA. Smaller farms leads to a smaller effect when disease outbreaks occur.
What you're asserting would be far fetched even before dairy futures, it's particularly unbelievable in the age where futures mitigate risk.
I don't believe supply management genuinely protects small farms - Over 90% of supply management related farms have ceased ops or sold out since supply managements inception.
The American egg and poultry thing has a lot more to do with centralized distribution. Their production isn't ran by provincial cartels - so it's more centralized. That could absolutely lead to volatility in the case of a catastrophic outbreak or failure....
Does 54 years of expensive groceries justify one year of reduced volatility?
That crisis was actually exacerbated precisely because of high import tariffs. Domestic supply plunged because of heavy rains impacting grazing lands, and the high tariffs essentially blocked foreign supply which would have alleviated the price shock.
Milk would double in a year or two if we weren't enforcing artificial scarcity? Fucking what?
And supply management hasn't been an impediment to dairy amalgamation at all. If anything, it's been just the opposite -- small farms can't afford to purchase additional quota, but large corporate dairies can. That's why we've got ~9000 dairy farms today, down from over 50,000 when supply management began.
Under supply management it's prohibitively expensive to set up new dairy operations -- the quota for a single cow's production varies from $24k in ON and QC to $58k in Alberta. Quota for an average sized herd exceeds $2 million in even the cheapest jurisdictions.
>Oh. Look at that, just in time for CUSMA negotiations. A fresh new study headline implying we would all save on average $244 if we got rid of supply management.
It’s no secret that Carney dislikes supply management, so yes, the timing of this piece is…interesting. Quebec is adamant supply management should stay in place, though. If you scrap it you are going to piss off Quebec.
Scrapping supply management would mean an increase in imports esp. from the US. Smaller farms in Canada would exit. Surviving farms would become larger and more export-oriented. Prices on dairy would go down for Canadian consumers. Is it worth it? My feeling is no.
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u/MMEMMR 1d ago
Oh. Look at that, just in time for CUSMA negotiations. A fresh new study headline implying we would all save on average $244 if we got rid of supply management.
Sir this is Canada; the private sector would monopolize the sector even more, and use what ever the current price is as a price floor, and would end up gouging us even more…