The Senate needs to pass Bill C-282 to prevent future trade negotiators from bargaining away more of Canada’s supply-managed dairy, poultry or egg markets, now served by Canadian farmers and benefiting the Canadian economy and food system.
The House of Commons passed this bill with over 80 percent of MPs in favour. To become law, it has to pass in the Senate too.Â
Canada’s supply management system was developed by farmers working with governments to solve overproduction, waste, volatility, inefficiency, shortages, quality and exploitation.
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Canada’s solution is simple and has stood the test of time. It provides high quality dairy, chicken, turkey and eggs to consumers year-round, with fair and predictable prices for the farmer and the processor. And even though supply management does not set retail prices — that’s up to grocers —Â statistics show that overall grocery prices in Canada went up faster than retail milk prices over the past 10 years.
Supply management also ensures farmers have the stability to invest in long-term improvements like energy efficiency and animal welfare, hire workers and pay for services and products locally, and pass their farms to the next generation.
Supply management stands upon three pillars: production discipline, cost-of-production farm-gate pricing, and import controls. Passing Bill C-282 would uphold the latter pillar.Â
Opponents believe Canada’s trade negotiators must have access to all possible concessions, even if that puts Canadian farmers out of business, taking economic engines out of rural communities and weakening our food processing sector. Strangely, Bill C-282’s most vocal opponents already operate in a largely tariff-free global trading environment, and some do not even use the market access they have gained.
Until the World Trade Organization was established in 1995, Canada had hard limits on dairy, poultry and egg imports. Under the WTO, tariff rate quotas allow a certain amount of imports tariff-free, but above that threshold, high tariffs apply, making further imports uneconomic.
Various trade agreements added more tariff rate quotas for dairy chicken, turkey and eggs, which our trading partners have fully utilized. As a result, 18 per cent of Canada’s dairy products and nearly 11 per cent of Canada’s chicken is now imported, mostly from the U.S.Â
Some people believe international competition would reduce prices for consumers. However, retail prices are set by grocers, and in countries without supply management, prices are similar to Canada’s.
When consumers buy imported dairy, poultry and/or eggs, their grocery dollars leave Canada, which means we lose the positive spin-offs that happen when consumers buy Canadian-produced products.
After the European Union, United Kingdom, Australia and New Zealand deregulated their dairy sectors, farmers ramped up production, hoping to sell more. The result: supply greatly exceeded demand and farmgate prices crashed.
The lower the price, the more volume is needed to maintain revenues, but overproduction pushes prices down in a vicious circle, bankrupting many farmers.
Supply management is a uniquely Canadian triumph that has proven itself over 50 years. Using our supply managed market as a trade bargaining chip is a lose-lose proposition. If supply management fails, dairy, poultry and egg production would shift toward the exploitive model that dominates the U.S., or our sectors would be displaced altogether by imports.
A commitment to keep our supply management system strong by passing Bill C-282 would keep our dairy, egg and poultry food dollars in Canada where they support thousands of farm families, workers and rural communities and ensure consumers continue to have reliable, affordable access to top quality food.
Phil Mount is vice-president of operations with the National Farmers Union.
