Thursday, June 21, 2012

Americans Move Towards Supply Management?

Plenty of upheaval lately over supply management, a pet peeve of the corporate media, lobbyists and apparently some Liberals, although the latest "big name" voice is about as liberal as Harper is a communist these days(do the math). As well, if your big idea of a bold new vision for the Liberal Party is arguing against a stable rural economy, perhaps leadership isn't your calling (do the math). Of course, everyone is entitled to their opinions, however the sudden emphasis with all the problems in this country is overblown and bordering on hyperbolic.

Those that argue against supply management live in a never never land, wherein they actually believe prices would be the equivalent of other jurisdictions, despite the fact commodities and goods are ALWAYS higher in Canada, even those operating in the beloved free market (which doesn't exist btw). I just read a G and M piece today arguing supply management costs consumers 3 billion a year, 3 billion! Lazy pieces of this sort never compare price differences with other commodities outside of the dreaded system, they simply falsely posit erroneous bottom line numbers to alarm and rile. As well, strangely, no one every incorporates the additional costs of government inspection, on farm food safety, programs many farmers pay for THEMSELVES under the current system.  What of that "cost" to consumers, is that not counterbalanced or is it just easier to use simplistic math to further a bastardized case?

Perhaps the cost of these commodities would go down under a new system, but the evidence in other jurisdictions is contradictory, you can make the case either way.  As well, a certain naivety is required to not believe the big processors wouldn't gobble up any additional margins, to think "savings" are passed directly on the consumer requires leave of common sense.  No, what is most likely, very marginal savings to the consumer, the farmer suffers and any benefit goes to corporations.

There is quite a interesting debate going on down south.  A quick review of the dairy reforms proposed by US Senator Gillibrand HERE is a good review for anyone who actually believes the true free market exists.  Revisiting the BAILOUT programs to deal with volatile prices, as well as newer reforms that would PEG THE PRICE and MANIPULATE the supply of milk- the horror!  Yesterday, a BIPARTISAN amendment passed the US Senate, which means the Americans will look at these reforms, the move towards supply management alive and well in free market America. What we see with the American example, a commodity wherein farmers require routine bailouts and protectionism to keep the industry afloat. The latest reforms, supported by Republicans and Democrats alike, are a byproduct of the realization that market forces are destroying the family farm.

With that backdrop, fascinating that certain elements in Canada seem determined to adopt this failing model. To be fair, the "model" was always an illusion, the Americans subsidize their commodities, as do most jurisdictions, in a myriad of ways, any talk of a true free market always a laughable proposition. Anyways, it is noteworthy that the Americans are seeking to adopt price control and supply manipulation just as the heat is on Canada to abandon these "outdated" marketing boards.

Go compare the price of a car in Canada and the United States. Our very own Senate is CURRENTLY looking at the perplexing reality, that being, EVERYTHING in Canada is more expensive, even things outside of the dreaded supply management system. Remember this reality when false numbers are presented, 3 billion my ASS, run the numbers for other goods, then get back to us with your enlightened math corporate media.

I support farmers.


Jeff said...

If the case for supply management is so strong (I haven't really explored the issue) then its proponents should have no problem with revisiting and debating it. If we're going to be the evidence-based party, that should mean hearing all the evidence and going where it takes us.

If that ends up being the continuation of the system, so be it.

But too often in my view, anyone that even approaches the issue is told don't talk about it or you hate rural Canada. I reject that.

No cows, if you'll forgive me, should be sacred.

Andrew said...

Thanks for this post Steve. As a young dairy farmer, I'm amazed by how many well educated people believe that free trade can actually exist. No country is going to remove all barriers, all subsidies, all restrictions. We can't even get free trade among provinces, let alone with countries with very different (usually weaker) environmental and human rights regulations. As you mentioned, the US merely supports their producers with subsidies. When there is too much milk, it gets turned to powder and sold below the cost of production, which would only hurt producers like me because I make less than I spend. I go out of business, and so does someone at the dairy plant. Just ask a tender fruit grower in Niagara, or a cucumber producer trying to sell to a Bick's pickle plant that has been moved off-shore. Do I have more money in my pocket because pickle prices were cut in half? Of course not, because they didn't get cut in half on the shelf. If supply management ends, all we prove is that we continue to be the naive boy scouts of world trade, and every other country has their choice in how to take advantage while giving up nothing.

liberal supporter said...

You'd think the Harper regime would be all over this as a question of National Security.

So let me get this straight: Not only can the F-35 not really defend the North without a lot of help from other countries with the refuelers and command centres, but also in times of war, we can't even make breakfast for the pilots?

The gun nuts like to tells us armed people are citizens, unarmed people mere subjects. Well where are they to tell us a people that can feed themselves are a nation, if they can't they are someone else's possession.

Möbius said...

Wow, 3 strawman arguments in one post, ls. That must be a record.

liberal supporter said...

Hey Mobius, name a country that cannot feed itself at all. You give up food sovereignty, you're done.

If globalizing our food is so great, why not outsource our armed forces as well? All the same arguments apply.

sharonapple88 said...

Not afraid of a debate, but if it's not broken, why fix it?

Steve V said...


As for sacred cows, I've never been a "lifelong" Liberal, so those considerations really don't apply. There is merit to this system, it provides a stable economy for rural areas.

This post demonstrates other jurisdictions are finding the "free market" problematic, invoking controls, price fixing, in ADDITION to the myriad of subsidizes.

We've bailed out the pork and cattle industries, we've even had buyouts to curb supply! The illusionary world of a free market doesn't exist, and I'm not taking my cues from the likes of John Manley who hasn't criticized the Harper government ONCE since they took office! Guy is about as "Liberal" these days as Rae is a "dipper".

Omar said...

.."but if it's not broken, why fix it?"

I don't profess to be an expert on supply management and what it means for the Canadian dairy biz, but what I do know is that the price of milk (which I don't drink so therefore could care less what it costs) is unbelievably outrageous. Same with cheese. Which I do like to eat occasionally. I for one don't appreciate being gouged at the grocery in order to keep rural Canada placated. Something needs to be done to bring these ridiculous prices back down from the stratosphere and if that means tinkering with some sort of outdated protectionist strategy, then so be it.

Steve V said...

The Canadian Senate is currently debating the issue of why goods are more expensive in Canada, goods under free trade. People delude themselves thinking that processors won't just pocket any "savings", it won't go to consumers.

Omar said...

Absolutely no savings for consumers? I can't see they'd pull that. But if that were the case then I would support the status quo and purchase even less dairy products then I do. They're shite for you anyway.

liberal supporter said...

There are plenty of problems with supply management, such as quotas that restrict producers and set prices. But these problems can be solved without opening the borders to foreign producers of these products.

It's really two different questions. Tariffs to protect the domestic industry so we have food security, and the quota and pricing bureaucracy which can gouge us.

Möbius said...

That's a bit more like it. At least you admit that protectionism increases prices of staple goods which, of course, hurts the poor more than the rich.

Considering the amount of vegetation we get from the US in the off-season, I consider them part of our food security.

Mark Dowling said...

@Andrew: how did you enter the business? Did you have to buy quota or are you part of an existing family enterprise? From what I understand quota is a massive barrier to entry for prospective dairy farmers, something a historically immigration-friendly Party should be conscious of for starters.

Steve V said...

Another fallacy, there are always new entrants. Obviously it requires a big investment, but since the quota is guaranteed, an easy sell as well. I believe one of the SM commodities did an analysis and found a good turnover of producers. Anyways, the daily musings from the National Post provides a cautionary tale as to taking cues from the right wing.