A Defense Of Supply Management II

A Defense Of Supply Management II

on July 23 | in Ag News | by | with No Comments

Christian Farmers Federation of Ontario Commentary

By Henry Stevens, CFFO Director

Last week I discussed the logic and benefits of the supply management system. This week I want to explore some of the criticisms that have been voiced in the media recently.

For example, some commentators suggest that supply managed sectors are inefficient. Most business owners involved in capital-intensive sectors, like farming, are actually very focussed on efficiency. Because supply management provides security, farmers are able to invest in up-to-date technologies that can greatly improve efficiency for their operations. In particular, new and young farmers are transforming the industry by seeking innovation.

Experts have also suggested that supply managed commodities are a tax on the poor. Several commodities are priced according to the world market. Both systems have pros and cons. For example, we are seeing in the news this week that the prices of pork and beef will rise over the summer, while chicken and dairy, which are supply managed, will remain the same. It’s important to recognize that each pricing system has its pros and cons, but it’s difficult to target either method as a tax on the poor. The suggestion that retail prices would drop if we only got rid of supply management is doubtful. There is very little connection between farm gate and retail prices.

Many have also criticized supply management because of the high cost of quota. It’s important to remember that the cost of quota is not included in the cost of production formulas. It does not affect the retail price.

The cost of quota is certainly a challenge for individuals who want to get into a supply-managed commodity, but it’s not impossible. Because of supply management, farmers are guaranteed price, which makes it possible to build a credible business plan that can be taken to the bank. It is true that some outside-the-box thinking might be necessary to find seed money, but that is generally the case for any new business venture. Supply management is not perfect. Each commodity must constantly work to strengthen their sector, particularly by making it more accessible to new producers.

In a widely published recent column, Sylvain Charlebois, dean of the faculty of management at Dalhousie University, said, “As a result of supply management, dairy farmers are bureaucrats, not entrepreneurs. They work for the state, not the economy.” Is Charlebois suggesting that dairy farmers contribute nothing to the economy? In most of rural Canada, the economy is dependent upon a healthy agricultural sector. Supply managed farms are often a driver of that success.

Ontario Agriculture Minister Jeff Leal is to be commended and encouraged in his stated resolve to “not cede one inch when it comes to supply management because it works.” We must continue to provide the abundant safe, fresh, local, nutritious food that consumers have come to expect from us. Supply managed producers should not apologize for the marketing system they have chosen to be a part of. At the same time, they must not develop a sense of entitlement. Always remember, “From him who has been given much, much will be demanded.”

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