Supply management: Better than Ever for Canadian Farmers, the Economy and our Consumers

I support supply management. Period. As a member of a Canadian dairy farming family, proudly producing top quality milk for my fellow citizens, I know that supply management’s demise would mean the end of the dairy life that I know and love. Recent articles from various news outlets as well as a newly released study have brought these feeling to the foreground once again. In my opinion, the media’s discussion about the future of the Canadian dairy industry is sorely lacking any input from Canadian dairy farmers themselves. I’d like to add my voice, a dairy famer’s voice, to the discussion as well. In all likelihood, you’ve read one or more opinion pieces recently speculating about the fate of supply management as the Trans Pacific Partnership negotiations continue. According to various sources, Canada’s participation in these trade talks depends on our willingness to dismantle our supply managed poultry, egg, and dairy sectors. Looking north, the US sees Canada as a veritable treasure trove of untapped export opportunities. In the wake of falling global milk prices, increased competition from newly emerging dairy powerhouses like New Zealand, and lost markets due to the Russian embargo,  a new dairy export market would inject some much needed income into the US dairy industry. As though throwing a dog a bone, supporters of the TPP claim that Canada will also be able to export dairy products south of the line, but, in my opinion, this half-hearted benevolence does little to mask their true intent: flooding the Canadian market with mass produced milk. Additionally, a  recent article in the Globe and Mail falsely accused Canadian dairy farmers of producing too much milk and that milk dumping was occurring as a result, and used this standpoint as a grandstand to air anti-supply management sentiments. This article has since been soundly discredited, here, here and here, but the ideology behind those sentiments remains, and is extremely worrisome to my fellow dairy farmers and myself.  Here’s why:

What does Canada actually stand to lose if supply management crumbles? A study commissioned by the Dairy Farmers of Canada shows just that. This study “affirms the significance of the economic impact of the dairy sector in Canada. Conducted by EcoRessources, the study, entitled “The Economic Impacts of the Dairy Industry in 2013”, is third in a series which tracks the changes and impact of the sector over the years, beginning in 2009.” Highlights of this year’s study point to :

  • Local, provincial and federal tax revenue produced by the dairy sector: $6.3 Billion in 2013
  • Growth in Gross Domestic Product (GDP) output by $3.7 Billion in four years, to 18.9 billion in 2013
  • 215 000 jobs maintained by the industry
  • More milked shipped: 7.8 billion litres in 2013, up from 7.6 billion litres in 2009.
  • Less than 10% of Canadians’ disposable income is spent on food, one of the lowest in the world (1.03% on dairy).
Dairy Industry Statistics

Dairy Industry Statistics

In addition to this study that highlights the dairy sector’s vibrancy, viability and important contributions to the Canadian economy, recent analyses have also shown increased growth in the dairy industry due to Canadians’ higher demand for dairy products. The retail sales of cream (+5.5%), butter (+4.4%), cheese (+3.2%), and organic milk (+15%) registered quite remarkable growth rates over the past year. Dairy farmers have been asked to produce more milk than last year – 8% more in the past year here in BC alone! – to keep up with this increased demand.

The risk Canada runs by dismantling supply management is this: we could lose many of the above mentioned contributions and more than that, we would stand to lose what we value the most, a safe, secure supply of milk, produced to the highest quality standards that Canadian consumers have come to rely on. The ultimate sacrifice if supply management is eliminated would be our Canadian family farms. With an average size of 77 milking cows, we would have a very difficult time competing with the glut of foreign-government-subsidized milk flooding in over an opened border, most produced by mega dairies. This would likely mean the end of the dairy industry as we know it. Canada’s small, family run, environmentally conscious, local farms would likely be replaced by what experts call CAFOs – confined animal feeding operations. With CAFOs come a number of environmental risks, and they require special legislation to operate, but they can produce milk at a lower cost. I am quite active on social media, sharing our daily farm experiences, and I have had many conversations with consumers who are concerned about the environmental risks and animal welfare concerns that tend to be attached to CAFOs. The current situation in California is a prime example of this: farmers there are paying a huge price for over-concentrated farming and the subsequent consumer backlash against agriculture. Would Canadian consumers really appreciate our family owned and operated dairies turning into massive conglomerates?  I have my doubts…

IMG_2353

Our family owned and operated 80 cow dairy farm. Will it be a casualty if supply management falls?

Claims that Canada could become a big player in the export game have little standing. Since deregulation in Australia in 2001, exports initially grew for a short period of time, but have since dropped rather dramatically, from 6.1 million tonnes in 2002 to 2.9 million tonnes in 2011. From this we can see that more market access does not necessarily mean more industry growth. And we’re not comparing apples to apples here! Australia’s climate allows their dairy industry to rely on a cheaper, pasture based system, which is unfeasible due to Canada’s much harsher climate. Our cost of production due to the need to store and purchase feed and house our animals for extended periods of time is therefore higher, and would lead to challenges in competing on the world market. And of course, we cannot forget that presently there is an excess of milk globally, contributing to very low milk prices. What little Canadian farmers could export after deregulation would likely not have very much monetary value relative to the cost of production. Another interesting recent development, to me, is that the oft-mentioned comparisons of prices of dairy products for consumers in the US and Canada seem to have faded into the background. The lower Canadian dollar has resulted in the price difference shrinking considerably. Even with the government subsidized milk prices in the grocery stores, US milk prices are very close to, and sometimes even higher than, Canadian prices. Meanwhile, prices paid to US farmers have dropped in the last few months to below the cost of production (according to an American dairy friend). Dismantling supply management would likely not result in a decrease in consumer pricing, but could result in an increase in taxes to fund government subsidies if the cost of producing milk in Canada is not covered by farm gate prices.

Price of milk in Florida vs Prince Edward Island

Price of milk in Florida vs Prince Edward Island (photo and tweet credit:Randall Affleck)

So what can you, my fellow dairy farmers and consumers, do to help others understand the value of our current system? Talk about why you support the supply managed system, write about it, or, better yet, contact your local member of parliament. In an election year, our voices are more influential than ever and are more likely to be heard. MPs need your support to win their seats come November, and they need to know what is important to their constituents. With such a significant contribution to our country’s economic vitality, we have the obligation to make our voices heard; our voices matter. And our voice is this: We support supply management… because it works! It works for farmers, for consumers and for our country. Stand firm, Canada!

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