It’s time to have an honest discussion about the future of supply management. How much of the system can be preserved and at what cost?
All the political parties pledge allegiance to supply management as they cater to rural votes in Ontario and Quebec, where dairy farms make up a large portion of the farm sector and where there are also lots of poultry operations.
With a Trans-Pacific Partnership trade deal looking plausible, the Conservative government says it will pursue being part of the deal while doing its best to preserve Canada’s supply management system.
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Tom Mulcair and the NDP are trying to use this as a wedge issue, pushing the government for an assurance that supply management will remain intact. No doubt Mulcair believes this is a great political strategy, particularly with the NDP wanting to hold its huge base of MPs from Quebec.
But let’s assume a TPP trade deal would mean substantial benefits for beef, pork, canola and pulse crops as well as many other non-farm sectors of the economy. Would an NDP government forfeit the benefits in favour of strictly preserving the supply management status quo?
Is supply management that sacred, that untouchable?
There are anti-trade sentiments within NDP ranks that see trade only benefitting big companies. Before an NDP government is elected federally, it would be good to know the extent of that attitude.
It’s interesting that the NDP wants to be seen as the most fervent protector of dairy and poultry farmers, most of which have a considerable net worth. In fact, poultry and dairy farms have a higher net worth on average than grain and beef cattle farms.
And much of that net worth is quota value. Depending upon the province, a typical dairy farm with about 100 milking cows has quota worth around $3 million.
Naturally, producers in supply management are wary about anything that could reduce their returns and erode quota values.
Some economists and analysts decry Canadian consumers paying more for milk and poultry products, but the system has actually worked well. Unlike grain and beef farmers, dairy and poultry producers haven’t had to run to governments for handouts when prices or export markets crashed.
Maybe consumers have paid a bit more in grocery stores, but milk and chicken are still a bargain.
The industry has tried to address the issue of escalating quota values. In eastern provinces, dairy quota values have been capped. In most jurisdictions, there are new entrant programs that attempt to reduce the quota value burden on new producers.
However, there is also a lot of turf protection with supply management producers feeling a sense of entitlement to their quota wealth. It’s often compared to the escalating value of farmland. You need farmland to produce grain or raise beef cattle, just like you need a quota to produce milk or poultry in Canada.
Still, any federal government serving the interests of all Canadians should not rule out the possibility of making changes to supply management. Exactly what changes will be needed to get a deal at TPP? Should affected producers be compensated for some of their losses? If so, how would that be done?
Those are the legitimate questions for the Conservatives and the opposition parties to be debating. Shadow boxing and playing politics with the issue has little benefit.
