Now is the Time to End Supply Management: Report

Author Martha Hall Findlay Says Politicians Have Little to Fear

Une traduction française de ce communiqué de presse est disponible à http://www.policyschool.ucalgary.ca/?q=content/communique-de-press-rapport-par-martha-hall-findlay

OTTAWA, June 21, 2012 /CNW/ - At a media conference held today by The School of Public Policy, Martha Hall Findlay, former Liberal MP, issued a ringing economic and political challenge to supply management in Canada.  In a report published by The School and focusing on dairy, Hall Findlay called supply management "byzantine", a stumbling block to Canada's full participation in international free trade arrangements, and grossly unfair to Canadian consumers and farmers alike. Hall Findlay's analysis finds that as a result of supply management, Canadians pay 2-3 times as much for milk as do consumers in the United States.

Further, she describes how Canada's insistence on this protection makes it difficult to open access to international markets. This means that all other Canadian enterprises that rely on trade—including most of the farmers in the non-supply-managed sectors—are often denied lucrative access to some of the world's largest and rapidly growing markets.

Canadian politicians have refused to address the supply management issue because the politics have been deemed toxic - votes are perceived to be at stake.

However, Hall Findlay's report goes beyond economic analysis and examines the electoral implications of challenging supply management. She finds that despite every effort on the part of the dairy lobby to promote fear, political concerns are no longer valid. Since 1971 (when supply management in dairy started), the number of Canadian dairy farms has dropped by a staggering 91%.

"Based on electoral analyses of the ridings where these last few dairy farms are concentrated, even if dismantling supply management negatively swayed dairy stakeholder votes, there are few, if any, ridings where this would be enough to plausibly swing elections—particularly compared to the votes of all those in those same ridings who would actually benefit. Even if such a worst-case scenario had happened in 2011, we'd still have a Conservative majority," said Martha Hall Findlay.

"More importantly, though," she added, "dismantling supply management is not something that should be feared by the dairy sector. It is possible to dismantle supply management in a way that not only works well for dairy farmers, but which can leave them even stronger."

The author recommends a plan based on a model used by Australia, involving compensation and transition funding for farmers for 8-10 years.  Funding would come, not from government coffers, but from a temporary consumer levy on milk that would still mean retail prices lower than consumers are paying now, and only during the transition period. After the transition period, consumers (as well as processors, restaurants—and the farmers) would benefit from the full free market, both domestic and international.  Done properly it could be a win-win for consumers, farmers—and even politicians.

The report can be found online at www.policyschool.ucalgary.ca/publications.

SOURCE University of Calgary - School of Public Policy

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