The President and CEO of the Canada West Foundation believes dairy farmers and Canadians would be better off without supply management.
Martha Hall Findlay says, as well as allowing the Americans access to 3 to 4 per cent of the Canadian market, they've put export controls on Canada under the new United States-Mexico-Canada Agreement (USMCA).
"What the Americans did is put this in, in case we actually got our act together and moved on from supply management and wanted to take advantage of some of these global export markets. They actually wrote into the USMCA, 'Yeah but, in case you get to that point, we don't want you competing with us. So over a certain minimum volume you're going to have to charge an export tax, thus making your product more expensive than ours.' "
Hall Findlay says, the deal was a win-win for the Americans.
"Our market shrinks a little bit, but then we don't have the opportunity to then go and export to some of these incredibly growing markets, and Canadian farmers make really good milk, and some fantastic cheeses, so it's so frustrating to see we're going to protect our small environment because we get wealthy from it, but at the same time we're denying the opportunity to grow internationally."
Hall Findlay says, in its simplest form, the dairy commission of Canada sets the prices in supply management and works with the provinces to allocate quota.
"The (dairy) farmers set the prices based on anticipated production, based on anticipated demand, based on anticipated production cost, plus, and you'll hear this word a lot, a 'fair' profit. That fair profit is rendering people really wealthy. I don't know about you, but far wealthier than most people I know."
She adds, Canadians will still be paying too much for dairy under the USMCA.
"The double whammy is that consumers still end up paying very high prices for these basic food stuffs, but wait and see how many billions of dollars the government commits to compensate. Billions of dollars to compensate for a couple of percentage points of the market. That gets paid for by those very same consumers as tax payers."
Hall Findlay says instead of the federal government discussing the amount they'll be dishing out to dairy farmers, it would be great if they look at studies which explore the transition and compensation costs of dismantling supply management.
The Canada West Foundation is an independent, non-partisan public policy think tank based in Calgary.
Source : Steinbachonline