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Call for Bold Reform to Canada’s Dairy Supply Management System | Part 4

Final Policy Paper in Dairy Supply Management Series Outlines Elements for Reform

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The George Morris Centre released its fourth and final paper in a series of policy papers exploring Canada’s supply management for dairy. The paper puts forward ideas for a reform, but stops short of suggesting that Canada should dismantle or replace it all together. The first two papers in the series were commissioned by the Conference Board of Canada, while the final two papers were published by the George Morris Centre.

The report presents four key elements that would be needed to bring about bold reform. They include: mandating growth as part of dairy markets top objective of milk supply management, improving the overall efficiency of the system, liberalize milk pricing, and improving trade positioning.

“These represent a package of mutually-dependent set of proposed reforms”, says Al Mussell, Senior Research Associate at the George Morris Centre in a press release. “They are unlikely to be very effective independently, but taken together they can create the basis for positive reforms to milk supply management in a more market-oriented, trade liberalized world of the future”.

The first pillar that’s discussed is the importance of establishing market growth, as it plays a critical role in attracting new investment. The authors suggest that there should be a shift in focus away from market stability towards market growth.

The report indicates that the dairy industry needs investment in processing plants. It’s noted that one of the ways to increase attractiveness for these facilities is to dissolve provincial authority over milk allocation to the national level.

One of the other aspects of addressing milk allocation inefficiencies is addressing the administrative tool used to distribute milk among processing plants. Limitations are at the provincial level and are often bureaucratic in nature. The rules that are established tend to be in favour of fluid milk in classes that deal with products like ice cream and yogurt but often discriminate against other classes like cheeses, butter, milk powder, and more. The proposed solution for this is to administer milk market allocation on competition among producers. The paper illustrates that this occurs with other supply managed commodities such as turkey, eggs and chicken.

Part of the reform also calls on a renewal of the management governance of organizations and agencies including: the Canadian Diary Commission, Canadian Milk Supply Management Committee, regional milk pools, and provincial milk marketing pools. The paper suggests that administration management should be streamlined.

The paper concludes that there should be a renewal of supply management and notes that the recommendations outlined aren’t without challenges, but these recommendations could provide a framework for a positive reform of the dairy supply management system.

The full 14 page report can be found on the George Morris Centre website entitled “Canada’s Supply-Managed Dairy Policy: An Agenda for Reform”.

The following are links to other articles in the policy paper series:

•How Did Canada’s Supply Management Policy Come to be? | Part 1
•Comparative Analysis on Canada’s Dairy Supply Management System | Part 2
•Examining Canada’s Supply Management Dairy Policy, Identifying Challenges and Proposing Need for Reform | Part 3

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