What the Media Has Wrong About Dairy Farmers
Posted: 08/01/2013 5:21 pm
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With reoccurring and recycled negative commentary about dairy supply management in the Canadian media, one would think that it, and not money, is the root of all evil. I believe that this country's media and punditry is either ill-informed on the merits of the system, or committed to a world view in which data and practical reality have no place.
The question often raised in Canada, and around the world, is this: does dairy supply management, represent a reasonable model through which to license Canadian milk production?
Neoliberal critics like Canada's Conference Board or the CD Howe Institute, and international critics like the Organization for Economic Cooperation and Development, say no, claiming the system gouges consumers, at least when compared with prices set by "the market," which in their world is rational, objective and infallible. And we have seen where that has gotten us, what with market meltdowns, imposed austerity, and sharply rising unemployment in many countries.
But more to the point, the claim is simply not true. The cost comparison between supply management and the market-determined price is like comparing apples and oranges. When the market sets the price, the direct expense to consumers does not generally reflect the outlays incurred by the farmer. As a result, government must provide billions of dollars worth of subsidies annually to farmers if they are to stay in business.
But more to the point, the claim is simply not true. The cost comparison between supply management and the market-determined price is like comparing apples and oranges. When the market sets the price, the direct expense to consumers does not generally reflect the outlays incurred by the farmer. As a result, government must provide billions of dollars worth of subsidies annually to farmers if they are to stay in business.
The critics of supply management do not factor these hidden taxpayer dollars into the cost of a litre of milk. In Canada that is not the case. There is no hidden subsidy provided by Canadian taxpayers to dairy farmers.
By comparison, U.S. subsidies to dairy producers represent about 40% of American dairy farmer incomes, when it reaches them. These subsidies come directly from taxpayers' pockets. Without that hidden support American dairy products would be much more costly for consumers, and much more expensive than the equivalent Canadian product. See more at: What the Media Has Wrong about Dairy Farmers
