Ms. Findlay has become famous or perhaps infamous for her Anti-supply management research paper. The flaws in the logic of the document represent a total lack of understanding of rural Canada and the role supply management has played in providing economic stability for those regions.
Some of the statistical analysis is way off base, as the 'assumptions' used are totally inaccurate and it is obvious the observation of the numbers cannot provide insight into what is going on , when one has no understanding of those rural communities.
Readers were invited to vote before reading the comparative posts. A recent check shows the poll may still be active so readers are invited to follow this link and post your views at: http://www.huffingtonpost.ca/marni-soupcoff/supply-management-debate_b_2726857.html
Below is Mr.Doyle's blog posts. Enjoy!! -CG
The price of a glass of milk in a restaurant can run about $2.50. It must be supply management driving up the cost, right? In fact, Canadian dairy farmers get much less than the tip on that glass of milk, about 20 cents.
OK, so then you stop off at the market to buy some Italian Parmiagiano Reggiano cheese (the most highly imported European cheese by volume) and marvel at the $40 per kilo price tag. It must be those huge supply management tariffs you heard about! Wrong again. The actual import tariff on that cheese was only three cents a kilo and the price at customs was only about a third of what you're paying at the cash register.
What do these two scenarios have in common? They show that supply management has very little to do with the retail price of Canada's dairy products. The truth is, the only price that supply management sets is what is paid at the farm gate, based on actual cost of producing milk in Canada.
Few people think of the benefits the system creates not only for Canadian dairy farmers, but also for the Canadian economy. A few facts:
Stability/Predictability: Farmers must be efficient to cover their costs under the current pricing system. But because of the stability, farmers are better able to plan and to reinvest in their farms, their employees and their communities. They are key drivers for the rural economy.
Northern climate: The costs of producing milk in a northern country like Canada are significantly higher than in a country like New Zealand, which benefits from 10 months of pasture for cattle. Some New Zealand farmers must produce year round to supply their liquid milk market. Their costs are much closer to Canadian costs. However, because of Canada's additional housing expenditures, costs are still higher here.
No volatility: Globally, dairy products are among the most volatile agricultural products. In recent years, we have seen the price double in three months or cut by half in less than six months. Not in Canada.
Some suggest supply management is to blame for consumer prices. The Hall Findlay report incorrectly claimed Canadian consumers are paying up to $9.60 for four litres of milk, a figure that was later retracted.
The truth is the current retail price of milk in Canada is higher than it is in the United States. But it's lower in Canada (about $1.45 per litre,according to AC Nielsen Consumer data) than it is in New Zealand ($1.65 a litre) or Australia ($1.55 a litre).
So, will the price of milk always be higher in Canada than in the United States? Not if history is any guide. In the mid-1990's, milk at retail came close to being 40% cheaper in Canada than in the U.S.
We often compare the prices of goods between Canada and the U.S. As a recent Senate report found, there are many elements that explain the price difference with the US (e.g. currency strength, economic conditions, wages, domestic policies such as healthcare, larger social safety nets, etc.). When Target opens in Canada its prices will likely be higher on most goods compared to the U.S. store. That isn't because of supply management.
Moreover, on February 14, Canadians had earned enough money to pay for food for the year, making Canada and the U.S. the countries with the most affordable food in the world.
What would happen if we were to abandon supply management? Australia is a country that some cite as a model for Canadian dairy. Australia deregulated its milk market in 2000, and almost immediately farm prices began to fluctuate wildly. An initial retail price drop was followed by steady increases, which were accentuated by a tax levied to help farmers with the transition. The end result of deregulation: prices are no better for consumers, and they pay an additional tax.
There is one final and most important difference between Canada and other countries. Where the dairy industry is subsidized, like in the United States and the European Union, consumers are essentially paying twice for their dairy products -- once at the store and again through their taxes that fund farm subsidies -- but it's still not enough for farmers to cover their costs. A 2010 study indicated that Americans pay the equivalent of 31 cents per litre in government dairy programs. Canadian dairy farmers are not subsidized, and do not rely on government handouts.
Canada has a lot of farmland. We also have a system in place that helps dairy farmers create jobs and contribute as active members of their local communities. Research tells us Canadians want their farmers to cover their costs, keep farming and providing jobs.
Supply management is not perfect, but it is the best agricultural system. When you strip away the hype and myths, it's clear that it's right for farmers and right for Canada.
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