Supply management benefits farmers, rural economy

What a boon it would be to agriculture if efficient farmers could consistently meet their cost of production, realize a profit and provide safe food to consumers.

In Canada, some farmers have that boon.

It’s called supply management.

Rumour has it that the system is under threat amid negotiations over Canada’s entry into the Trans-Pacific Partnership.

Threat is the operative word here because the loss of supply management would equate with the loss of many viable Canadian farms.

Other Canadian agriculture sectors stand to benefit from the TPP, and the idea that supply management must be dealt away to ink the deal is getting more credence than it deserves.

Every country involved in the negotiations has sacred cows to protect, as does Canada with its dairy, egg and poultry sectors. Supply management has been cited as an impediment in other international trade negotiations, but it has survived all previous deals, albeit with concessions. Such was the case most recently with the agreement negotiated with the European Union.

Some Americans are even envious of Canada’s system. A national milk group devised a supply management system in efforts to stabilize price volatility. It gained traction, but an insurance-based scheme was embraced instead.

Other U.S. commodities have long benefitted from government programs that protect them from international trade threats. They call it “farming the mailbox.” Other potential members of the TPP have protective programs, too.

Canadian sectors that espouse sacrificing supply management to the greater trade gods suggest it would allow dairy, poultry and egg producers to trade internationally. These are perishable goods, which means more trade with the United States is the primary option.

That view does not acknowledge export restrictions that already exist by virtue of the World Trade Organization agreement, at least in the case of dairy. There are limits on butter, skim milk powder, cheese and other products.

That aside, the Canadian system supports family operations of a size and scale that would not be able to compete with American agricultural powerhouses. Massive expansion and consolidation would be required.

Yet many Canadians agree on the benefits of maintaining family farms with their attendant support for rural communities, superior environmental records, product traceability and attention to animal health and welfare.

Supply managed sectors, which do not need the government risk-management payouts that are sometimes required by export-dependent commodities, also account for feed, equipment and other purchases that help drive the rural economy.

Farmers in supply-managed sectors have major investments in their operations. The funds required to compensate them for that investment, should supply management be sacrificed, would amount to billions.

It would take years, perhaps decades, for Canadians to repay those farmers for monetary losses. Losses in terms of family farms, communities and local food supply are incalculable.

Is the TPP and supply management an either-or scenario? Given the secrecy of negotiations, that is far from clear.

Much has been made of the timing of TPP negotiations relative to the coming federal election. Clearly the governing Conservatives would lose farmer votes in hotly contested Ontario and Quebec ridings if they deal away supply management.

However, the government has been firm in its stated commitment to supply management. It must continue to reject the notion that membership in the TPP deal requires the sacrifice of a successful system.

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