With high-profile European and Asian trade negotiations underway, Canada’s system of supply management is a fashionable target for critics. Their attacks beg for a modern interpretation of supply management, before political promise-making overshadows 40 years of proof that the system works and continues to evolve.
Despite recent name calling, supply management is not a union or cartel. It is a system created and maintained by farmers, enabled by federal government legislation, and built for the mutual benefit of Canadian consumers and farmers. It’s as important today as the day it was implemented, four decades ago, to match dairy, poultry and egg production with national demand.
Though there is no political shelf-life for a consistent, domestic, local supply of fresh farmed foods, critics promote the growing global availability of competitive products. Truth is, Canadians prefer Canadian farmed products and they want to support Canadian farmers. Cross-country focus groups – as recent as last week – tell us these are universal, near-unanimous values. Independent research drives home the point: In 2012, Bank of Montreal documented the preference for Canadian foods (favoured nine out of 10 times, on some products), and a related willingness to pay more, especially for the benefit of Canadian farmers.
Critics overlook this public preference, warning supply management inflates consumer costs. While it would be nice to believe that lower commodity prices mean lower retail prices, the reality is much different.
Under supply management, Canadian farmers get about $1.70 per kilogram when they sell a chicken. Retail prices are not so fixed. Last year, in one city, on one day, one premium brand of chicken thighs sold in different stores for as little as $12.72 and as much as $18.72 per kilogram – for the exact same product, no sales, no specials. This is not an indictment of retailers, it’s marketing. To portray retail prices as a symptom of supply management is dishonest.
So too is another favourite critical claim, the correlation between supply management and U.S.-Canadian price disparity. Despite years of dollar parity, it is true that U.S. prices are often lower for supply managed farmed foods. But, it’s equally true of farmed products that are not supply managed. And, while we’re at it, Bank of Montreal’s 2012 cross-border shopping report says it’s also true of lawnmowers and running shoes and t-shirts and automobiles and, well, you get the point.
Blaming supply management for U.S.-Canadian price disparity – even on supply managed products – is theorizing in a vacuum. For instance, it ignores that, according to various analyses, U.S. farmers receive tens of billions of dollars of subsidies annually, while Canada’s supply managed farmers get none.
In the absence of subsidies, supply management provides Canadian farms and consumers stability. To see the value of that stability, Canadians need look no further than Australia – a Trans-Pacific Partnership (Asian trade deal) nation – which dismantled supply management in 2000. Since then, the number of dairy farms has fallen from 12,500 to 7,500, according to PricewaterhouseCoopers. Adding insult to injury, the retail price of eggs in Australia is still substantially greater than Canadian prices.
This illustration suggests an interpretation of supply management that goes beyond price, including everything from food security, to product standards, to the place of farming in our nation’s heritage and economic future.
A commitment to supply management is a commitment to Canadian standards. Under the system, Canadian farmers institute on-farm food safety programs, trace products nationwide, and meet Canadians’ expectations for every imaginable variable – storage, cleanliness, pest control, feed stocks, animal care, record-keeping, bio-security, and more.
The shared commitment of our farmers to create great Canadian farms is rooted in supply management’s assurance of a fair return. In many cases, so is their survival. Supply management keeps farmers farming, allows generations to see a future in agriculture, and – perhaps most importantly – supports rural jobs, economies and general vibrancy. At last count, Canadian supply management supports about 300,000 jobs (100,000 on farms), $25-billion in GDP, and nearly $5-billion in taxes.
This case for supply management was true decades ago, when everything from seasonal uncertainty to monopolistic market barons challenged the survival of the Canadian farm. Today, there are new variables challenging Canadian farms – globalization key among them.
In a global commodities market, where bigger is usually better, Canadian farmers will struggle to compete on price alone. This should not spell the end of our country’s farming heritage.
Thousands of Canadian farms benefit from supply management. Some are very large; most are small and family run. Collectively, they are an important part of the backbone of our national rural economy – and they are jeopardized by the cavalier suggestion that supply management is a thing of the past.
The history of supply management is an evolving 40-year story about the common interests of Canadian farmers and their Canadian customers, the nation’s continued preference for domestic farmed foods and the reliability of Canadian farmers to meet it. It’s a story that tells us supply management is not just an important piece of our nation’s history, but an integral part of our collective future.
Peter Clarke is chair of the Egg Farmers of Canada