A senior federal agriculture bureaucrat predicted the end of supply management last week and drew the ire of Liberal MPs for his prediction.
Guy Jacob, chair of the Canadian Dairy Commission, went before the House of Commons agriculture committee last week to offer a message he already has given directly to dairy farmers:
The moment the government signed the 1994 world trade deal, which converted import controls based quantity limits into tariffs, it signed the death warrant for supply management.
The supply-management system depends on controlling imports in order to establish production controls in Canada.
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Jacob told MPs that under trade liberalization, tariffs fall and what now are high protective tariffs will someday fall enough to expose Canadian dairy, chicken and egg producers to international competition.
“We’ve sort of been hiding from the fact that eventually, it is going to happen,” he said. “It will not happen in the next couple of years but it will happen.”
Jacob suggested the end of the system might be a decade away but farmers should start preparing for it.
It could be replaced by an orderly marketing system with farmers united to collectively market and negotiate price. However, it will not be supply management as the industry has known it.
There will be a North American or world market.
Bloc QuŽbecois agriculture critic Jean-Guy ChrŽtien said Jacob was “opening a Pandora’s Box.” He predicted that farmers will be throwing milk at the dairy commission chair for his comments.
Jacob did not back down.
It is better to tell farmers the truth and let them prepare than to make believe supply management can be preserved indefinitely, he said.
Liberal MPs on the committee were angry.
Paul Bonwick, an Ontario Liberal with a strong dairy lobby in his riding, said he and his party ran in the last election on a platform of preserving supply management. “Do you know something I don’t know?”
Committee chair Joe McGuire noted that the message from the most important federal dairy bureaucrat contradicts the official government line that supply management will be protected in future trade talks.
Jacob said it can be a policy to defend supply management and keep tariffs as high as possible for as long as possible. But the effort will fail because trade rules dictate that tariffs decline.
Liberal MPs wondered why Jacob, an appointment of the federal agriculture minister, was making statements that contradicted the government.
Ontario Liberal Rose-Marie Ur wondered if Jacob really was working in farmers’ interests when dairy support prices are set, since he believes the system is doomed.
MP Murray Calder worried the government will send confusing messages to the tens of thousands of farmers who depend on supply management.
“There is a mixed message here,” he said.
