Australia, NZ suffered after dairy deregulation
Re: Case made against marketing boards, (WP, Aug 8).
Author Roslyn Kunin, lamented the existence of supply management, a model that matches domestic demand with domestic supply and which provides a living wage for farmers and a competitive price for consumers.
Australia and New Zealand are cited as successful examples of dairy deregulation; all public support was withdrawn and farmers successfully reacted to market forces, at least in her account.
That depiction could not be further from the truth. In Australia, dairy farmers are under siege, with thousands leaving the industry over the years since deregulation, unable to make ends meet.
The new regulators, the two big supermarket chains, Coles and Woolworths, have prospered mightily from the dairy sector, selling milk for A$1 per litre and paying dairy farmers much less. This practice has driven farmers into poverty.
Further, Australian producers provided more milk before deregulation in 2001 than they do now – in excess of 11 billion litres as opposed to 8.7 billion now. And demand has continued to grow, raising fears that the country will be forced to import more milk as a once-vibrant sector continues to shrink.
In NZ, the other so-called success story and largest global dairy exporter, dairy has lost social license and is now labelled as “dirty.” But more importantly, that country has not deregulated its dairy. Fonterra, to which the great majority of farmers belong, is a cooperative and holds a monopolistic position.
As well, in order to ship through Fonterra, farmers must own shares in the cooperative, which is like owning quota, a pillar of supply management.
In NZ, for 4 litres, consumers pay the equivalent of C$5.94 for the cheapest milk, a fact that one University of Auckland professor has called “astoundingly high.” In Australia, that price is C$3.59, but a significantly adverse cost to society and the dairy sector has been paid. That industry is in crisis.
What about Canada? In Ontario four litres of milk can be purchased for C$4.25. That is a competitive price.
Finally, Kunin suggests that Canadian prices would be much cheaper if we could only pay those charged in the United States. The overall cost of living in Canada is higher than that in the United States, yet she thinks we would be paying American prices for dairy and eggs? Gas, cars, clothing, and food more generally are all much cheaper south of the border.
In the U.S., dairy and eggs, input prices are much cheaper – feed, fuel, labour, equipment costs – everything. As well, these agricultural sectors are heavily subsidized by taxpayers. Do we want our farmers to rely on the public purse as they do in the United States? I think not.
Incredibly, a recent study estimates that subsidies equaled 73 percent of U.S. dairy farmers’ market returns in 2015. This points to a dairy industry not unlike Australia’s – one in crisis.
Further, if we were to allow unregulated dairy imports into Canada from the U.S., we would not have a dairy industry for long given the difference in input costs and the volume of cash that flows from Washington, D.C. and state capitals into dairy farmer pockets. This said, many American dairy farmers long for Canada’s system as it would allow them to stay on the farm, something they find increasingly difficult to do now.
Supply management, in the sectors in which it operates, is a superior, post-modern system that provides a living wage to farmers and a competitive price for consumers while sustaining rural communities in Canada. Ideology should not get in the way of making this sound assessment.
Associate Vice President, Research Oversight and Analysis and Professor of History
Egg Farmers of Canada chair of public policy
University of Waterloo, Ont.
Scheer’s criticism is hypocritical
Conservative leader Andrew Scheer’s recent six-page attack pamphlet accusing the Liberals of “going easier on big business” has to be the most hypocritical statement so far by the leader of the Conservative Party.
Not that it isn’t true, it’s just that Scheer’s party is the party of big business. It was created in the boardrooms of big business to be the party of big business and no ground has been too immoral to navigate when the beacon of prime ministerial power shines from the other side.
Recall the sordid creation of the Conservative Party. It was the treachery of the front man Peter MacKay, who solemnly contracted never to amalgamate with the alliance in order to gain the coveted prize of leader of the “progressive” Conservative Party. He lied to the entire body of “progressive” Conservatives and did so in such a shocking, back stabbing, manner.
MacKay had the support of most of the Alliance hierarchy as well as the radical-right of the PCs (essentially big business).
Hypocrisy in politics is merely a tool that can be used to gain the prizes they covet.
In this upcoming election, people can drain the swamp by ignoring Liberals and Conservatives on the ballot.
Fort San, Sask.