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5 reasons to defend farm marketing boards

A 40-year-old farm program could become a political issue to watch in 2012.

But not if the Harper government can help it.

Andrew Coyne declared the "supply management rip-off" the most under-reported political issue of 2011 during The National At Issue panel's year-end "best and worst" roundup.

"It's remarkable how little people know about how much they're paying for basic food," Coyne said, noting that supply management has become a major issue because "our trade partners are fed up with it."

As Coyne spoke those words in mid-December, International Trade Minister Ed Fast was in Geneva at World Trade Organization talks where, in the words of the government's press release, Canada was "recognized as a free-trade leader."

Although Fast, and Harper before him at this fall's APEC Summit in Hawaii, supported the concept of open markets, the government has been equally adamant publicly about protecting supply management, even as reports hinted that compromising some aspects of Canada's agricultural marketing board system may be necessary to sign on to a future Trans-Pacific Partnership trade deal.

"We always say that all matters are on the table," Harper said in Hawaii. "But of course Canada will seek to defend and promote our specific interests in every single sector in the economy."

A senior government source confirmed that as an accurate summation of the government's approach to not only the TPP talks, but current negotiations with the European Union as well: say you're open to talk about anything to get to the table, but when it comes time to deal, keep your elbows up on supply management.

This frustrates Canada's restaurant and food industry, which is campaigning to slay the sacred cow of supply management for consumers and food suppliers who want lower prices.

But despite a majority Conservative government and renewed moves toward trade liberalization worldwide, there's no sign the Harper government plants to dismantle dairy or poultry marketing boards the way Conservatives ended the monopoly marketing system of the Canadian Wheat Board.

It's been six years since MPs had a recorded vote on the principle of supply management in the House of Commons. That vote — on a Bloc Québécois motion calling for a strong mandate against tariff changes during WTO negotiations — passed 288-0. Not a single MP rose to suggest there might be something to gain by giving even a little.

Even Maxime Bernier, a cabinet minister otherwise known for his free-thinking, free-trading, pro-business views, defends the status quo.

Why might the Harper government continue to defend supply management? Here are a five reasons:

1. Complex jurisdictions

Any government bent on dismantling supply management must unravel a complicated jurisdictional web. In addition to federal legislation, every province has its own marketing board legislation. On top of that, provinces have inter-provincial agreements, such as those establishing "pooling blocks" for milk.

Al Mussell, a senior research associate at the George Morris Centre in Guelph, an independent agriculture think-tank, says tackling supply management would be far more difficult for the Harper government than dismantling the Prairie-only wheat board monopoly that was based only on federal legislation.

"There's no procedural analogy," Mussell says of speculation that having dismantled one, the other could follow. "It's an interesting theoretical discussion but the reality is absent."

The federal government could change its own laws, but it couldn't force the provinces to pull back unilaterally; a potentially divisive round of federal-provincial negotiation would be required.

2. Quota buy-back expensive, 'unfeasible'

While it was a (buyer) monopoly, the wheat board was not a form of supply management — producers did not hold "quota" that itself has a dollar value. Ending quota-based systems typically requires some kind of buy-back or compensation program in the transition to an open market.

Quota values fluctuate with market conditions, but recent estimates put the total national value of Canadian dairy quota in the $25-billion range. Add in the egg, poultry and turkey sectors, and that figure may be as high as $35 billion.

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