To the Editor:
Have you ever wondered why milk and cheese are so expensive in Canada? If you've spent time in the United States, you'll know that our American counterparts pay a fraction of what we do for dairy products. The reason? Canada's magnificently stupid policy of dairy supply management.
Canada purports to have a free and open marketplace. We champion free trade, fair competition, and trust in the basic laws of supply and demand. Unfortunately, dairy supply management runs counter to these basic principles: it props up an inefficient system of production, effectively doubles the price of dairy products for consumers, and gouges the people who can least afford it. In short, it's bad for everyone. Except, of course, a handful of Eastern Canadian dairy farmers.
Here's how it works. Our current system of dairy supply management was established by the federal government in the '70s to ensure the success of the industry. It is overseen by the Canadian Dairy Commission, a regulatory body charged with setting the price of dairy products. In what can only be described as a massive conflict of interest, two of its three commissioners are dairy farmers, and its CEO, John Core, used to be one as well. Thus dairy farmers, not the market, get decide what the public will pay for their product, which helps explain why a four-litre jug of milk that costs just $2.50 in New York costs around $5.00 here in Saskatoon.
This can occur because enormous barriers to trade keep outsiders out. Americans wanting to sell milk in Canada can't afford to pay the required tariffs - which are set specifically to discourage competition from foreign dairy producers - and still turn a profit. This effectively guarantees a monopoly for domestic producers.
Canada has about 13,000 dairy farmers, each of whom must buy government-set milk quotas. The quotas are basically production credits which determine what each farmer is permitted to produce and sell. In total, the current value of these milk quotas is about $33 billion, or $1,000 for every man, woman, and child in the country. That works out to about $2.3 million per farmer.
In a cruel irony, however, artificially inflating the market makes dairy farming nearly unprofitable. The National Post reported that one farmer grossed only $230,000 on $1 million worth of quotas; his net profit, after accounting for his production costs, was just $70,000. Business concerns aside, dairy supply management has serious ramifications for the less fortunate among us. When every cent matters, the choice between expensive milk and cheap pop isn't really much of a choice. After a while such purchasing decisions become habits, which can contribute to obesity, diabetes, osteoporosis and a host of other maladies down the road.
Dairy supply management also sets a terrible precedent, namely that dairy farmers shouldn't have to compete fairly in the marketplace. Other businesses must succeed by better serving customers, creating better products or offering better prices (or some combination of the three), why shouldn't dairy farmers be held to the same standard?
Of course, farmers exert a great deal of influence over the provincial and federal governments, and Ontario and Quebec will resist any attempt to change this morally bankrupt system since many of their constituents profit from it, at the expense of the rest of the country and consumers.
Regardless, that supply management hurts the poor more than any other group is reason enough to abolish it; that it hoses everyone who buys dairy products suggests it was a bad idea to begin with and should be eliminated as soon as possible. Unquestioningly supporting a gluttonous industry on the backs of cash-strapped consumers isn't progressive; it's ridiculous.
The Editors of Verb Magazine, Regina, SK.
