Alex Binkley on supply management

Supply management as beneficial as ever
By Alex Binkley
True North Perspective
Supply management is as relevant to Canadian dairy and poultry farmers as the day it was introduced, says a prominent champion of the production system.
That said, Bruce Muirhead, the Associate Vice‑President of External Research at the University of Waterloo, says the negative reaction of Dairy Farmers of Canada to cheese quotas offered to Europe as part of the tentative CETA deal was perplexing. "I thought it was a pretty decent deal that they got."
The government “was working toward minimizing the impact on supply management, but had to give up something,” he told the Senate agriculture committee. “You have to give something in return for access to the European market. We get beef access. In that context, maybe there is a bit of trade-off, as you know, for beef or cheese. I don't think it will have much long‑term impact on Canadian cheese. The fine cheese market in Canada is growing dramatically.”
Muirhead said the drama surrounding the negotiations on the Trans-Pacific Pact have focused a lot of attention on supply-management, mostly from countries that don’t understand the Canadian system. Based on his studies of the American, British, Australian and New Zealand dairy and poultry sectors, “the Canadian way, it seems to me, is the best in all of those sectors. … Egg and dairy supply management in 2014 is as rational and as necessary as when it was implemented in the early 1970s. Indeed, the case is more solid presently, given the global volatility in agricultural prices and the difficulties farmers outside the supply‑managed sectors face in ensuring the sustainability of their operations.”
Supply management “ensures stable production at reasonable prices to consumers,” he said. It also gives farmers the ability to deal with processors and retailers that other producers don’t enjoy.
He detailed the problems deregulation has wrought in New Zealand and Australia, the hefty subsidies American dairy producers are using to expand production and the likely chaos that will arise from Europe’s termination of quotas.
The federal government was defending supply management in international trade talks from those “who have demanded its fundamental change in favour of something that reflects so‑called free market characteristics. I would say there is no such thing as a free market in agriculture.
“It is important that our government continue to do so,” he continued. Government around the world support the systems Canadians are in competition with. “Every single dairy sector and most egg sectors are supported in some fashion by the public sector, except Australia, which has difficulties unique to Australia, despite a pervasive rhetoric in all international trade negotiations that would suggest otherwise. The genius of the Canadian system lies in part in the fact that its farmers are not subsidized by government, while still providing an essential agricultural commodity at a reasonable price for consumers.
“These issues are becoming more important as questions of the benefits of free trade in agriculture are being increasingly replaced by new concerns emerging from recent increases in food prices and food scarcity and as agricultural issues become more pressing in the face of climate change,” he pointed out.
"The Canadian system hits all the proper markers — “food security, food sovereignty, traceability and proper pricing for consumers, with the result of smaller farms with less adverse environmental impact as well,” he said.

Alex Binkley