Report critical of supply management | The Paris-based organization says the system distorts subsidy levels
A Paris-based economic analysis organization has praised the Canadian government for its decision to end the CWB monopoly.
“The recent decision to remove the monopoly of the Canadian Wheat Board on marketing wheat and barley in Western Canada, both for domestic use and export, is a positive step to enhance pro-active price risk management by farmers,” said the report from the Organization for Economic Co-operation and Development (OECD).
The report also noted that Canadian government support for farmers compared to producer income fell to 14 percent under the Conservatives last year, well below the OECD average of 20 percent.
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However, it also said Canada’s continued support for the supply management system distorts the country’s agriculture subsidy levels. It suggested an increase in quota to dilute the regulated production system.
“The dairy, poultry and egg sectors continue to receive high price support, distorting production and trade and establishing high rents capitalized in the quotas required to produce under the supply management system,” said the report, prepared under the direction of OECD trade and agriculture director Ken Ash, a former economist at Agriculture Canada.
“Increasing the amount of quota available would improve market orientation and reduce these rents, which currently act as a barrier to entry into supply managed sectors.”
However, the Conservative government did not react to that recommendation.
Instead, it noted the comments on the CWB issue.
In response to a planted question from Medicine Hat Conservative LaVar Payne during the House of Commons’ Sept. 19 question period, agriculture minister Gerry Ritz said the OECD report reinforces the opportunities that the end of the CWB monopoly bring.
“His farmers, my farmers and farmers from all across Western Canada are embracing the opportunities they now have available to them under the Marketing Freedom for Grain Farmers Act that we passed earlier this spring.”
