Supply Management: Hell Has No Fury As a Quebec Farmer Wronged

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It is one of the most beautiful parts of Canadian farm country.  I am talking about the Beauce region of Québec, that area south of Québec city, where picturesque churches dot the landscape and dairy and hog farms dot the landscape.  To the south is Boston Massachusetts, a major market for many Québec agricultural products.  However, this July 24th there will protest in Beauce as Québec dairy farmers protest a possible move to weaken or end supply management.  Hell has no fury as a Quebec farmer wronged.  The federal government may surely find out.

I’m very interested in this protest simply because I know how aggressive and effective Québec farmers can be.  I have personal experience with 6000 angry Québec farmers in front of me during the April 6th, 2006 protest in front of Parliament Hill.  Mobilized in a few days, Québec farmers can always turn out.  The demise of the supply management system for Canada’s dairy economy would have a devastating impact on the Québec economy.

One advantage I have of writing agricultural economic commentary over the last 29 years is that I get a bit of perspective.  No, I am no authority on what the Federal Conservatives will do with supply management.  However, clearly the Trans Pacific Partnership or TPP, which is currently being negotiated amongst many countries, is putting pressure on the federal government to cave.  Many countries such as New Zealand and the United States want open access to Canadian dairy markets.  Over the last 40 years plus, that simply wasn’t in the cards.

It is like critics of Canada supply management system want us to sell milk like I sell corn and soybeans.  In fact, I am sure I can find many Canadian farmers that feel the same way.  For instance, I grow corn wheat and soybeans and I market them on the free market.  That means that I am left to the vestiges of futures markets and basis irregularities, you know the rest of the story.  It is what I’ve chosen over the last 40 years, but it is far from perfect.  In fact, sometimes it is downright corrupt.  That’s the nature of free market economics.  However, it usually rewards efficiency, but not always.

If there is been one ideal I’ve been asked about over my career as a farmer and agricultural economist it’s the ideal of fairness.  We all know the drill.  The catsup bottle cost more than the catsup inside it.  The box of corn flakes goes up in price but the price of corn does not.  If there were only a way to get consumers to pay more for the food they eat, it would be a much fairer food system.  Of course, when interest rates were high, it seemed so much unfair.

This gets to the crux of the issue with me.  Over the years I am sure you can find quotes from me of being critical of Canada supply management system.  Even proponents of the system would say that there are issues.  However, I do believe that Canada’s supply management system attempted to make consumers pay more for dairy and poultry products to the benefit of the farmers who are producing them.  It set up a structure where this could actually be done.  At the same time, it is still only a pipe dream for the cropping and livestock sector.  Simply put, the Canadian supply management system was set up to bring more profits to farmers.  It replaced the system that simply didn’t work.  The intentions were very noble and they still are after all these years.

Critics of Canada supply management system generally don’t get that.  Many think that milk and poultry should be sold like I sell corn and soybeans.  The history behind why the marketing system was set up is ignored.  The same tenants of agricultural economics, which gave birth to that system, are still the same.  Any race to dismantle Canada’s supply management system only substantiates Canada’s cheap food policy.

The problem with Canada’s supply management system is that it has its issues.  The profits that have been garnered from the marketing system have skewed some regions of Canadian farm country by being capitalized back into farm assets.  There are also other issues about lost potential on the world stage.  There are also other generational issues about barriers to entry.  I could go on and on, nothing is ever perfect.  Much of the criticism of supply management’s legitimate and it is based on these issues.

Solutions to these issues will not be found in greater agricultural trade and the destruction of a marketing system, which brings back greater profits to farmers.  I do not know the answer.  However, remember the box of corn flakes and the corn farmer.  Our Canadian supply management system is an honest attempt of a marketing system to correct that wrong.  Unfortunately, in our current political climate that ideal is being lost.  Maybe in Quebec tomorrow, it’s the beginning of the long way back.

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