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Agriculture This Week - Supply management again hot topic

The idea of supply management is one of those things that when analyzed makes so much sense that you just know many people are going to rail against the concept.

The idea of supply management is one of those things that when analyzed makes so much sense that you just know many people are going to rail against the concept.

In my role as a journalist, one with agriculture as one of his beats for the past 25-plus years, I have written a lot of stories about farmers questioning how they can eke out a living.

There have been stories of farm gate stand-offs to prevent farm sales forced by foreclosure.

There have been tractor parades slowing traffic to protest low farm returns.

And more meetings and ad hoc farm programs and new idea support programs than I care to recall.

But, through all those events, the supplied-managed sectors, poultry and dairy were for the most part buffered from the worst effects of every price downturn whether created by market realities or political interference.

Somewhere in our past a politician in Ottawa actually had a good idea regarding helping farmers at least have a shot at being real even year-to-year. That is saying a lot given the long list of flawed support programs (farmers still blanche white when someone mentions GRIP (Gross Revenue Insurance Plan) which might have been the most hated farm support program in history).

The follow-ups to GRIP has been a mix of good, bad and rolls and rolls of red tape, to the point none have been widely loved; tolerated being a better word.

But there was that one good idea which has endured, that of supply management.

The idea is its most basic design really is brilliantly simple.

On the one side you determine what demand is for a product. In this case it was an easily determined market, that of dairy and poultry for the domestic Canadian market. With the demand defined a quota system is assigned to fill that need. The quotas are set to neither short the market, or to over produce so as to flood a finite market.

On the farm side a cost-of-producing a gallon of milk, or a dozen eggs is established, and that is the basis upon which producers are paid.

That does not mean every producer gets rich, as the cost-of-production is something of an industry average. Some producers will struggle to work with that average, others will glean a better margin.

That said, going back to all the rallies and meeting over the years, whether they related to grain process, or cattle, or hogs, the one thing often heard was the need for a support program which ensured producers received the basic cost of production.

For the most part supply management has meant producers at least break even, and producers are ensured a steady supply of domestically produced product at a reasonable price.

While there has been rationalization and upscaling of operations in both dairy and poultry, there are still viable farmers here thanks in large part to supply management.

There is little doubt in my mind we would have a strong horticulture and fruit sector were there some supply management controls.

Ditto for the lamb sector.

Other countries have never been a fan of Canadian supply management, which in itself says it is a program which favours Canada and Canadian producers.

Through numerous trade deals dating at least back to NAFTA (the North American Free Trade Agreement) others have called for our country to dismantle supply management opening up this country to milk shipped from Mexico, or eggs from Carolina. There is no way that sounds like a better situation for consumers, especially in an era when concerns over food safety are heightened. It has to be better to have the ability to control safety domestically.

So far Canada has held onto supply management but that may change as the government works to negotiate Canada’s place in the Trans-Pacific Partnership (TPP), 12 countries attempting to negotiate an Asia-Pacific trade pact.

There is again calls for Canada to tear apart its supply managed system to facilitate access to dairy and poultry from abroad.

With the current Progressive Conservative government, one which dismantled the Canadian Wheat Board another entity other countries saw as giving Canada an advantage, and one which also leans toward a business world sans controls and regulations. Supply managed farmers cannot feel particularly safe.

Hopefully, supply management will stick, since it works generally very well, and to lose it would simply leave the dairy and poultry sectors to the same vagaries of world markets and foreign government policy which has never been the best situation for other farmers here.

Calvin Daniels is Assistant Editor with Yorkton This Week.