Op-Ed — Keeping dairy, eggs and poultry Canadian makes sense
by Phil Mount
The Senate needs to do the right thing and pass Bill C-282 to prevent future trade negotiators from bargaining away more of Canada’s supply-managed dairy, poultry or egg markets, currently served by Canadian farmers and benefiting the Canadian economy and food system. The House of Commons passed this Bill with over 80 percent of MPs in favour. To become law, it has to pass in the Senate too.
Canada’s supply management system was developed by farmers working with governments to solve real-world problems: overproduction, waste, volatility, inefficiency, shortages, quality and exploitation. Canada’s solution is elegant, simple and has stood the test of time. It provides high quality dairy, chicken, turkey and eggs to consumers year-round, with fair and predictable prices for both the farmer and the processor. And even though supply management does not set retail prices – that’s up to grocers – statistics show that overall grocery prices in Canada went up faster than retail milk prices over the past ten years. Supply management also ensures farmers have the stability to invest in long-term improvements like energy efficiency and animal welfare, hire workers and pay for services and products locally, and pass their farms on to the next generation directly or through new entrant programs that help young farmers get started.
Supply management stands upon three pillars: production discipline (to prevent both over-production and shortages), cost-of-production farm-gate pricing (based on actual data to ensure farmer incomes are provided through the market, not government subsidies), and import controls (to ensure supply and demand are balanced). All three are necessary. Passing Bill C-282 would uphold the import control pillar.
Opponents of Bill C-282 believe Canada’s trade negotiators must have access to all possible concessions – even if that means putting Canadian farmers out of business, taking economic engines out of rural communities, jeopardizing the quality and security of our food system, and weakening our food processing sector. Strangely, Bill C-282’s most vocal opponents already operate in a largely tariff-free global trading environment, and some do not even use the market access they have gained.
Until the World Trade Organization (WTO) was established in 1995, Canada had hard limits on dairy, poultry and egg imports. Under the WTO, Tariff Rate Quotas (TRQs) allow a certain amount of imports tariff-free, but above that threshold, high tariffs apply, making further imports uneconomic. CPTPP, CETA and CUSMA negotiators added more TRQs for dairy chicken, turkey and eggs, which our trading partners have fully utilized. As a result, 18% of Canada’s dairy products and nearly 11% of Canada’s chicken is now imported. Most of these imports come from the USA.
Some people believe international competition would reduce prices for consumers. However retail prices are set by grocers, and in countries without supply management, prices are similar to Canada’s. When consumers buy imported dairy, poultry and/or eggs, their grocery dollars leave Canada, which means we lose the positive spin-offs that happen when consumers buy Canadian-produced products. When our population grows and demand increases, instead of allowing more Canadians to make a living from providing for those needs, that economic activity leaves our country to benefit others.
After the European Union, United Kingdom, Australian and New Zealand deregulated their dairy sectors, farmers quickly ramped up production, hoping to sell more. The result: supply greatly exceeded demand and farmgate prices crashed. The lower the price, the more volume is needed to maintain revenues – but overproduction keeps pushing prices down in a vicious circle, bankrupting many farmers. In Europe, governments stepped in with massive emergency payments to prevent the worst misery.
American commercial poultry production operates on a massive scale where contracted farmers are at the mercy of giant processing corporations that dictate the terms of production, control access to the market and offload all risks and debt. Smaller American dairy and chicken farmers alike have had their contracts ended without warning, leaving them with massive debt and no way to earn an income; some have despaired to the point of suicide.
Supply management is a uniquely Canadian triumph that has proven itself over 50 years. Using our supply managed market as a trade bargaining chip is a lose-lose proposition. If supply management fails, dairy, poultry and egg production would shift towards the highly exploitative model that dominates the USA, or our sectors would be displaced altogether by imports. An ironclad commitment to keeping our supply management system strong by passing BIll C-282 would keep our dairy, egg and poultry food dollars in Canada where they support thousands of farm families, workers and rural communities – and ensure consumers will continue to have reliable, affordable access to top quality food.
Phil Mount is the Vice President (Operations) of the National Farmers Union. He grew up on a dairy farm in Eastern Ontario, and currently raises mixed Katahdin sheep and runs a mobile food grill as part of a family farm operation.
