Supply Management: Setting the Record Straight

This article was submitted to the National Post, Globe & Mail and Huffington Post. It has not yet been published.

Campaign Research published the results of a poll on May 26th that asked Canadians whether or not they approve of supply management. The results were crystal clear: 75% of Canadians approve of supply management. Poll after poll continues to show support for the system that “works for our farmers, it works for our agricultural industry and it works for Canadians,” as Prime Minister Trudeau recently noted.

On behalf of all supply-managed farmers, it cannot be said enough: Thank you Canada for your continued support! Supply management is a system that benefits Canadians – consumers AND farmers. Here are a couple of reasons why:

Fresh, High-quality Products for Consumers and a Fair Return for Farmers

With supply management, Canadian farmers work together to match our domestic demand with Canadian products. This helps deliver the constant supply of fresh products that Canadians want and enjoy while farmers earn a fair return for their labour and investment.

As a result, Canada’s supply-managed agricultural sectors are among the country’s strongest; collectively adding 348,000 jobs to our communities, $6.9 billion dollars in tax revenues and $29.6 billion to Canada’s GDP.

Supply Management Does Not Raise Prices for Consumers

Retailers and restaurants charge what they feel the market will bear. The price paid by the consumer is related to many factors, which can include: retailer competition, brand positioning, the cost of competing items, and “door crasher” specials to draw consumers into their store. None of these factors are related to the share the farmer receives – which only represents a fraction of the final price.

Take chicken for example. The same chicken cuts bought at different stores, in the same city, on the same day, vary dramatically. Chicken Farmers of Canada found the identical national brand of boneless skinless chicken breasts at 21 stores in Ottawa ranged from $11.50 to $26.43 per kg on December 15, 2016. While the retail price varied by more than 100%, the farmer was paid the same $1.56 per kg.

The evidence from outside Canada further supports this. Milk production in New Zealand, the United Kingdom and Australia point to a notable discrepancy between farm gate prices and retail prices. In many cases, prices in these unregulated markets have actually gone up for consumers, while revenue for farmers has gone down.

No Government Subsidies Needed  

Canada’s dairy, poultry and egg industries are stable thanks to supply management. These farmers derive their returns directly from the marketplace, receiving no direct government subsidies. The same cannot be said in many other jurisdictions.

The United States offers their farmers a risk management safety net in the form of billions in subsidies every year, available to their producers through the U.S Farm Bill. Since August 2016, the USDA has also pledged to buy up to $40 million in cheese to help cut down on a massive surplus and raise milk prices for struggling dairy producers.

In the European Union, farmers are subsidized by a generous Common Agricultural Policy that has provided more than €50 billion in support to the European agricultural sector. In addition, between September 2015 and July 2016 the European Commission bailed out the European dairy industry twice, for a combined total of €1 billion.

A system that works for Canadians and for Canada

Canada’s dairy, poultry and egg farmers place their focus on satisfying consumers’ desire for high-quality, safe, ethically-raised food at affordable prices. We are grateful for the incredible outpouring of support from Canadians, and will continue to stand up against any attacks on the system that brings Canadians the dairy, poultry and egg products they trust.

Supply management is truly a model that benefits Canadians. Let’s keep it that way.

Benoît Fontaine
Chicken Farmers of Canada

Wally Smith
Dairy Farmers of Canada

Roger Pelissero
Egg Farmers of Canada

Mark Davies
Turkey Farmers of Canada

 Jack Greydanus
Canadian Hatching Eggs Producers