National Post says it’s time to end Canada’s milk cartel — dairy supply management — or the quota system

Much ado about dairying. Art by Stephanie Metz

Those who read the writing on the wall, and take an interest in international trade agreements have known for some time that the end is nigh for dairy supply management in Canada. Not that raw milk makes a difference one way or another. Still many have long suspected that the Dairy Farmers of Ontario (formerly the Milk Marketing Board) have used their lobbying clout and financial resources to attempt to block raw milk from gaining any traction in legislative circles.

For dairy farmers in Canada who are still part of the quota system the prospect of an end to said system could be highly destabilizing. With current quota value running around $25,000 per cow, a modest sized 40 milking cow farm is sitting on a million dollars worth of milk quota. Not that most farms actually paid that much for their quota. More likely it’s been handed down through the generations and originally acquired at a much more modest price, even adjusting for inflation. 

Still, the financial risks these farmers run in deciding to stick with a system that may be on its way out, makes the risks of farmers who choose instead to convert to providing organic raw milk through an organization like Cow Share Canada start to seem modest indeed. And of course once farmers start selling quota en masse, that $25,000 per cow price will soon collapse.

So here’s the story, which appeared as an editorial in today’s print edition of the National Post newspaper:

For all its efforts to give Western Canadian wheat and barley growers more marketing freedom, the federal Tories – like every other government before them for 50 years – are afraid to free the diary, chicken and egg markets in the same way. Consumers pay dearly for this timidity on Ottawa’s part. But now Canadian manufacturers may fall victim, too, to the distortions of our “supply managed” agricultural sectors.

It is bad enough that Canadian families pay almost twice as much for milk, butter and cheese as their American counterparts. Two litres of milk in Canada goes for as much as $3.50, while the equivalent half-gallon jug in the U.S. is typically less than $2.00 Canadian. Other dairy products are similarly overpriced here, so much so that dairy producers and border guards claim that Canadians, in increasing numbers, are slipping across the boarder to buy their weekly dairy fix.

This would be bad enough if it were just ordinary Canadian grocery shoppers who were shouldering the load to protect the incomes of the country’s 13,000 sheltered dairy farmers. But our restrictions on dairy imports and our price-fixing of domestic dairy products is now threatening jobs in other sectors. Canada is frequently excluded from international trade talks (or chooses to exclude itself) because of Ottawa and the provinces’ refusal to deregulate poultry and dairy production.

The Japanese announced Friday that they would join the Trans-Pacific Partnership (TPP) talks. Already the United States, Australia, Malaysia, Vietnam, Peru, Chile, New Zealand, Brunei and Singapore have joined or about to join in discussions about a free-trade pact to cover this burgeoning economic region.

This was a tough decision for the Japanese who, despite their history as aggressive traders, have been reluctant to join the TPP because doing so could potentially mean giving up crop subsidies and import protections for their farmers, one of the most powerful lobbies in the country.

The governing Democratic Party of Japan is said to be deeply divided over the decision, as several elected members of the caucus as beholden to rice farmers who have been convinced for decades that free trade would force them to close or sell their tiny, inefficient farms.

But, knowing that improved international trade is vital in these economically perilous times, Tokyo has finally decided to embrace the third rail of Japanese politics. Why, then, is Ottawa being so timid?

The diary industry is concentrated mostly in rural Quebec and Ontario, in ridings every federal government seems desperate to win or to hold on to. So for at least the last two decades, Ottawa has let the price of Canadian milk, cheese, eggs and chicken rise well above world prices and hoped no one would notice. Their goal has been to appease powerful farmers whose incomes are guaranteed because their production levels are regulated by bureaucrats, the prices for their goods are fixed and their industry is sheltered from foreign competition by tarffs of 150% or more…”

Read it all in The National Post.


Filed under News

7 responses to “National Post says it’s time to end Canada’s milk cartel — dairy supply management — or the quota system

  1. It is about time that a national paper has commented on this subject. Strength is growing and my prediction to the arrogant young, mis-informed, woman at the then Milk Marketing Board, back in 2007, that in 5 years, raw milk will be legal in Canada once again, seems to be headed that way. Maybe our democracy really DOES work! In the meantime, I am enjoying fresh raw milk through Cow Share Canada, and will continue to do so no matter what. We should ALL be able to make informed choices for our food consumption. PERIOD!

  2. Zeb Landon

    Owners consuming produce of the farm are not in a commercial public market, and they are perfectly entitled to eat apples from their own orchard. Since labour is deployed to gather up the apples, it is fitting that those co-owners who desire to consume the apples should pay something extra into the business to cover the labour costs.

    Whenever the dairy farmer’s family, or his employees, receive milk to drink, that does NOT fall under control of the ‘Dairy Farmers of Ontario’ milk marketing board. I don’t see why partners in the farm business, such as the cowshare members who co-invest in keeping the farm financially sound, should be regarded as under the regulation of the milk marketing board.

    The article in the National Post is about dismantling the milk marketing board, or “supply management’. I don’t think we need to advocate that, as it would likely be replaced by something worse, — international and even more prone to power politics of big corporate interests.

  3. thebovine

    I hope it’s clear that we are not advocating the dismantling of supply management. We are merely commenting on what external forces are trying to bring about in the Canadian dairy industry, and pointing out that, precarious as the raw milk industry may seem, the pasteurized milk industry, in spite of it’s seeming solidity, may be more of a deck of cards than many people thought.

  4. I think this can be spun as support for food freedom in general, although not for raw milk in particular.

    Raw milk advocates assert their right to seek out food of their choice from local farmers, without government interference. In a recent editorial, the National Post agrees: “Ottawa has let the price of Canadian milk, cheese, eggs and chicken rise well above world prices… to appease powerful farmers whose incomes are guaranteed because their production levels are regulated by bureaucrats… it is more important than ever to dismantle this old protectionist model.”

  5. Royce Hamer

    Please do not compare Canadian Milk to milk produced in the USA. Quality comes from the regulation which is strict as to medications and cleanleness of the product. I read the stats and from what I have seen there have been no deaths from milk in Canada either raw or pasteurized product from factory farms this cannot be said for the USA. If our milk is too high in price then lets look at the processors as a source for this problem. I am from Ontario and my friends in Buffalo NY buy most of their food in Canada.

  6. Ian Graham

    Don’t lets get sucked in by Nat Post sounding the alarm for food freedom. Clearly supply management has been a net benefit to Canada, kept several agricultural sectors viable, allowed smaller producers to stay on their farms, and kept deplorable practices like bovine growth hormone out the food supply.
    This is a stealth tactic to turn more of agriculture over to large corporate interests and their investors, in the name of ‘market efficiencies’.. They clearly state the gospel Truth that bigger is best, eg the Japanese domestic rice farmers are ridiculed for being such small landholdings.

    The Post will never get that diversity and locality will ensure stronger food security for Canadians.

    DFO’s Milk quota system is defective imo, and agreed that it needs an overhaul. But not to put to fine a point on, we don’t need any advice or example from the Yankees south of us.

  7. Bill Anderson

    Being from the US, I would like to voice my agreement with Royce Hamer. US dairy products are cheap because so many technological shortcuts are taken in their production — from rBGH injection in cows, to UHT processing, to pasteurized process “cheese” (aka Velveeta). For those of us who consume only organic and natural dairy products, it is really a challenge — even in states like Wisconsin (where I live) that have a high number of small and organic dairy farms — to obtain these products.

    I think Michael is correct in his assessment that the raw milk movement is not going to (or is even trying to) topple the conventional dairy industry. It seems that there are other global forces at work there (economic neo-liberalism) and the industry has sowed the seeds of its own destruction through decades of bad policy and practice.

    Wisconsin had 150,000 small dairy farms in 1950, with less than 13,000 today. Something has to give… and its not the fault of raw milk.

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