In the recent article entitled Supply Management Protects Few, Could Harm More, the authors play the same old tune about supply management. Let’s try this again – once more, with feeling.
Supply management has not prevented the conclusion of any trade agreements. It has existed in Canada for over 40 years and in that time, Canada has successfully negotiated over a dozen trade agreements with more than 50 countries, without affecting its ability to produce its own dairy, poultry and egg products.
Secondly, it’s a flat out myth that dismantling supply management in Australia and New Zealand has been “beneficial” to consumers. Australia dismantled their supply management system in 2001, and consumers have yet to see the price of milk decrease. New Zealand’s consumers haven’t seen any savings from dismantling the system, either.
This is because supply management does not set retail prices. Retailers set retail prices, accounting for factors like brand positioning and logistics. That’s why the price of chicken can vary wildly from store to store. For example, in Ottawa, the price of boneless, skinless chicken breast can range from $8.80 to $26.43 per kg – an almost $18 price difference for the same product. The farmer who produced that product received the exact same amount, irrespective of its final cost.
Chicken farmers in Canada receive an average of $1.54 per kg, which mainly covers the cost of feed and chicks. Since 2013, the price those farmers receive has decreased by 10.2%, while the price at retail has increased by almost 4%. This demonstrates the complete disconnect between the price farmers receive and the price retailers set for consumers.
Let’s look at that from a food service perspective: In most cases, the farmer’s share is less than the taxes on a chicken meal, and much less than the tip or gratuity given to the person who spends 1 hour serving in the restaurant.
Supply management farmers’ income comes only from the marketplace. They do not receive subsidies, meaning that only chicken consumers pay for chicken. In other commodities, producers receive substantial financial support from their governments. In these cases, consumers pay twice for these goods – once through their taxes and again when they buy the product.
Supply management has actually helped protect low-income consumers from recent upticks in food price, because other proteins have actually increased significantly in price, whereas the domestic prices of milk, eggs and poultry have remained consistent. Chicken has consistently been the least expensive protein available. Since 2013, for example, the overall price of chicken at retail only rose 3.5%, whereas beef and pork prices rose up by 32.2% and 13.6% respectively.
Supply management generates over 348,000 agriculture and agri-food jobs in the production and processing of chicken, eggs, turkey and dairy products. Combined, these five sectors contribute $29.6 billion to Canada’s gross domestic product (GDP) and over $6.9 billion in tax revenues to the government. In the chicken sector alone, 2,803 farmers and 191 processors sustain 87,200 jobs, contribute $6.8 billion to the GDP and pay $2.2 billion in taxes, while sustaining fellow Canadian farmers by purchasing 2.6 million tonnes of feed grain.
Stop playing the same old tune; dismantling supply management will not resolve Canada’s poverty and food insecurity issues. Supply management provides stable rural employment at living wages, while offering all Canadian consumers safe, affordable proteins. It is, in fact, part of the Canadian solution.
Chicken Farmers of Canada