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When producers call for regulations in the name of protecting consumers, you can generally assume that the real and intended effect is to exclude potential competitors: see, for example, our dairy industry. (Steve Jenkinson for The Globe and Mail)
When producers call for regulations in the name of protecting consumers, you can generally assume that the real and intended effect is to exclude potential competitors: see, for example, our dairy industry. (Steve Jenkinson for The Globe and Mail)

Which side of farm's supply-management fence are you on? Add to ...

Hundreds of comments, emails and tweets greeted Monday’s column, which opined that Stephen Harper might be willing to abandon the supply management system.

That system protects dairy and poultry farmers from foreign competition. The column predicted that the Prime Minister would dismantle these protections if that was the only way to secure access to the Trans Pacific Partnership, an ambitious free trade agreement currently being negotiated among Pacific nations.

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We should know the future of supply management by September, when the United States is expected to decide whether it supports this country’s accession to the talks. If Canada is invited to the table, then that means supply management will be on the table.

Many farmers and other supporters argue passionately for continued protection for poultry and dairy, while many economists and business groups strongly condemn it.

So what are those arguments, pro and con? Herewith, a brief primer on the two sides of the dispute.

In Praise of Protection

For four decades the federal and provincial governments have regulated the supply of dairy and poultry products, through a system of quotas, marketing boards and tariffs. The system provides consumers with a safe and affordable supply of milk, butter, cheese, eggs and poultry, while assuring farmers of predictable income.

Dismantling supply management, its defenders maintain, would extinguish thousands of family farms and subject Canadians to foreign products that might not meet Canadian domestic-production standards. And the loss of this country’s ability to produce its own dairy and poultry products could come back to haunt us if a natural disaster or economic crisis disrupted global supply chains.

“Supply management works well for farmers, processors and Canada as a whole,” said Ron Versteeg, vice-president of Dairy Farmers of Canada. When critics argue that Canada is the only country that practises supply management, he said, it is because “we stand alone in providing clean, consistent and transparent access to our market, while other countries hide behind phony non-tariff barriers.”

In Praise of Free Trade

There are about 19,000 dairy and poultry farmers in Canada, and their number is steadily dropping. To sacrifice trade agreements that could create many thousands of new jobs that would equip Canada to meet the challenges of the growing Pacific markets, just to protect some family farms, would be folly, trade advocates say.

Beyond that, supply management costs consumers through higher prices for dairy and poultry products, compared to south of the border. If protections were dismantled, larger and more efficient farms would readily compete against cheaper imports, free-trade advocates predict.

“Why should we be paying more for our chicken, eggs and dairy products? It’s totally outrageous,” maintains Herbert Grubel, a senior fellow at the Fraser Institute, a conservative think tank.

“And the added cost of not being able to pursue free trade really pushes things over the edge.”

At the root of the ongoing support for supply management might be the tie that still binds many Canadians to the farms their ancestors came from. Protecting the family farm resonates even among the most urbanized Canadians, who mourn the ongoing erosion of Canada’s rural heritage.

Whether the next generation and newer immigrants feel the same attachment could determine the long-term outlook for one of the last bastions of the settler culture.



Follow John Ibbitson on Facebook and Twitter @JohnIbbitson

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