Supply management
has evolved over time into the modern system we have today. It reflects the challenges of the Canadian dairy sector in 2018 and sustainably responds to market realities and trends. In an increasingly globalized world, Agropur believes that supply management continues to provide Canadians and their homegrown dairy industry with:
- An efficient framework that is not subsidized by the government or by Canadian taxpayers – which is not the same in most other countries.
- Locally grown and quality products at fair market prices for consumers.
- Contributions to Canadian rural economic development.
- Sustainable farming practices and stewardship of the environment.
- Stability for farmers and balanced market conditions for processors, and those that these groups employ.
Every country supports its farmers in different ways. In Canada, we’ll continue to implement supply management. It works for our farmers, it works for our agricultural industry and it works for Canadians.
The Right Honourable Justin Trudeau
Prime Minister of Canada
Canada will uphold and preserve the elements in NAFTA that Canadians deem key to our national interest, including… (our) system of supply management.
The Honourable Chrystia Freeland
Minister of Foreign Affairs
Canada’s supply managed system provides stability and balances domestic supply to demand, directly supporting nearly 200,000 jobs on more than 5,500 family farms. In the interest of protecting those workers and their families, Ontario cannot support this proposal, which threatens to damage our strong and closely connected agri-food economy. We will continue to work with the federal government in the fight to make sure the supply management system stays in place.
Kathleen Wynne
Premier of Ontario
We’re a strong supporter of the supply management system,” Carlier said. “The system is working very well … It makes for a safe and reliable supply of those products to our consumers.
Oneil Carlier
Alberta Minister of Agriculture and Forestry
Let’s work together to safeguard supply management and ensure there is no negative impact on the dairy sector as a result of the renegotiation of the North American Free Trade Agreement (NAFTA).
A pillar of economic growth and jobs
Canadian dairy farms benefit from a stable market environment that has facilitated long-term investments. This creates good jobs that drive socioeconomic development in rural regions across the country.
The dairy sector is not only important to farmers, their families and the local communities that the industry sustains. It is also key for the Canadian economy. Dairy is one of the top two agricultural sectors in seven out of 10 Canadian provinces. The supply managed sectors in Canada, including dairy, provide the necessary infrastructure to support viable agricultural sectors in many provinces.
Threats to supply management
Supply management in Canada is routinely threatened by demands made by our country’s top trading partners. Countries in Asia-Pacific, Europe and the U.S., most of which have subsidized or regulated dairy industries, insist on gaining important access to the Canadian market, which diminishes the benefits that supply management provides for Canadians.
The United States initiated the renegotiation of the NAFTA in May 2017. It has called on our federal government to abolish supply management, which is an unacceptable request. Stress this to your local Member of Parliament!
Agropur believes in the value of Canada’s supply management system now more than ever. Supply management meets the needs of consumers and many other stakeholders across the country. We consider it important for Canadians to maintain full control over policy decisions that affect their wellbeing. 75% of adults polled in May 2017 approved of supply management (Campaign Research, website accessible here;), while 92% of adults polled in April 2017 indicated that they were content with the range and quality of dairy products available in Canada, and a further 77% stressed they were satisfied with Canadian dairy policy (Abacus Data, website accessible here).
Canada must never concede to international pressure and bargain away our supply management system at the negotiation table. The federal government must keep its promises to guarantee that there will be no negative impacts on the dairy sector. The wellbeing of Canadians must always trump foreign governments’ desires to open new markets for their exports.
How you can help
Washington is exerting enormous pressure on Ottawa to trade away supply management in NAFTA renegotiations. Federal politicians from coast to coast must be reminded of the need to safeguard supply management in its current format to avoid a last-minute trade off that would weaken the dairy sector once again.
We need your support to ensure that our message is heard loud and clear by decision-makers in Ottawa. We invite you to:
Act
and use this website’s email tool to connect with your federal Member of Parliament to stress how important it is to safeguard supply management and what this means to you as a voter.
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Trust the experts
Stakeholders are currently debating the merits of supply management in the media – both those in favour of keeping the system, and those against it. The latter’s messages are often not based in reality and/or on facts.
A number of leading global experts have outlined the negative consequences for Canadians that would result from the dismantling of our supply management system.
Dairy sector
Agropur commissioned a study by the Boston Consulting Group (BCG) in 2015 on the impacts of the elimination of supply management in Canada. BCG found that the dismantling of the system would:
- Put the survival of 40-50% of dairy farms in doubt;
- Threaten 24,000 jobs, many of them in outlying areas where they would be hard to replace;
- Lead to a $2 to $3.5 billion decrease in Canada’s GDP;
- Risk shifting 40% of processing activities to countries with lower costs, mainly the U.S., New Zealand and the European Union, with no guarantee of lower prices for Canadian consumers;
- Increase Canada’s strong trade deficit in food processing, which stood at – $6.5 billion in 2015; and 15) in bank financing at risk of default.
The BCG study is available in its entirety here.
Price myth busting
There is no evidence to support the myth that supply management leads to increased prices for consumers in Canada. In fact, recent price comparisons for staple dairy products in Canada and the U.S. indicate the opposite. According to study results published by AC Nielsen, Canadian consumers paid less, on average, for butter, cheese and yogurt than their U.S. counterparts during a 52-week period ending on May 27, 2017 (Dairy Farmers of Canada, Submission on the renegotiation of the NAFTA, website link available here; last accessed online in March 2018).
The dismantling of supply management does not necessarily lead to reduced prices for consumers. Following the deregulation of the Australian dairy industry in the early 2000s, retail prices for cheese and butter increased annually by 7% and 4%, respectively, between 2004 and 2011.
Table 1. Retail prices for some dairy products
| CDN$/kg | Canada | U.S |
|---|---|---|
| Milk | $1.51/litre | $1.27/litre |
| Milk (rBST free)* | $1.51 | $1.63 |
| Butter | $9.34 | $10.71 |
| Cheddar | $13.90 | $14.87 |
| Mozzarella | $13.65 | $14.38 |
| Yogurt | $4.98 | $6.57 |
Source: Nielsen, 52 weeks ending May 27th, 2017. Exchange rate @ 1.32
*All Canadian milk is rBST-free
New Zealand is another country that has partially deregulated its dairy industry with damaging impacts on the environment and on the sustainability of small family farms. In addition, this deregulation did not ultimately translate into lower costs for consumers for dairy products. A global price comparison conducted by the Dairy Farmers of Canada between November 2015 and November 2016 showed that Canadians paid less, on a weighted average basis, for a litre of fresh milk (roughly $1.48 CAD) as compared to New Zealanders (roughly $1.68 CAD).
Other experts have weighed in on the benefits of supply management for Canadians of all backgrounds. Please click on the following links to access their studies/opinion pieces:
- Professor Bruce Muirhead, Crying over Spilt Milk: The History of Dairy Supply Management and Its Role in Recent Trade Negotiations, CIGI Papers, No. 30 – April 2014; website accessible here.
- Professor Muirhead, Critics of supply management are milking the argument, Macleans, May 16, 2014; website accessible here.
- Professor Muirhead, Canada’s supply management system is the envy of the world, iPolitics, December 18, 2015 (accessed March 2018); website accessible here.
- Professeurs Daniel Mercier-Gouin et Maurice Doyon, La gestion de l’offre attaquée à coups de sophismes, LaPresse, 29 mai 2017; website accessible here.
- Export Action Global, Dairy Systems Around The World: Are Canadian Consumers and Farmers Better Off with the Canadian Model?, April 2018; website accessible here.
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