Supply Management Sustains Family Farms

Contributed by Peter Spriut

I think some farmers will benefit from global trade but not all farmers will experience the same dividends. In the many free countries that have minimum or no barriers to trade, still have the majority of the food produced and consumed in the same country. This is a concern since the world price is paid to producers, often less than domestic price especially in European countries. What is the global price? I believe it is the lowest price farmers are able to dump milk on the market, in other words lowest price to get rid of the milk. Why should farmers get paid global price if it cannot sustain their operation.

With the latest global milk price crash many farmers in the EU, New Zealand and US are feeling the squeeze. Many dairy farmers in these countries are trying to cover losses, barely holding on. These same feelings are reflected in the Canadian beef and hog industries. Working all day (from 5am till 9pm), everyday and losing money doing it is exhausting, but most farmers have no choice. It is either call for bankruptcy and never be able to farm anymore or continue to sink in a drowning debt working 7 days a week, doing something we love.

For these reasons/fears I believe supply management has been the best system out there, although there are many negative critics. I come from a dairy farm located in Woodstock. We had moved 10 years ago from the Netherlands where we had a dairy and hog operation. The biggest advantage of supply management is quality of lifestyle. Lifestyle of dairy and chicken producers in Canada is easily ten times higher than those found in others countries. Look at all the fancy barns being built, cars being driven, and vacations taken. High quality of lifestyle is something to cherish. Do a google search and  you will find many stories of farmers in the US struggling to make ends meet in the dairy industry. I believe the same fate awaits many of us if we open our borders to free trade for two reasons. The first reason is that the cost of production is much higher in Canada than other countries such as of the extra money that goes into insulating the buildings from our climate. The second reason is that we are a price taker industry to the small amount of processors.

In conclusion, holding on to my lifestyle and fear that the global price is much lower than cost of production (as seen in the last three years). I do not believe that the Canadian dairy farmers will benefit from increasing trade. However on that note some trade like specialty cheeses is an attractive niche market. Supply management may have its downfalls but overall sustaining the farmers quality of life and keeping family farms alive far outweighs those disadvantages.

 

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2 thoughts on “Supply Management Sustains Family Farms

  1. aggie says:

    Pieter,
    I agree with you that there are numerous advantages to having a supply managed dairy industry in Canada. I would advise you to be carefull when you say such things as “Look at all the fancy barns being built, cars being driven, and vacations taken.” This will not do you any favour in the public eye. Supply managed continues to be a wonderfull way for Canadian dairy and poultry farms to stay profitable. You have to be weary of getting too gready and too comfortable with you nice car and expensive holiday. It will only put a bulls eye on your back and make supply management a target. If this happens then the system could be destroyed internally. When you show that you have excess money that you are not re-investing into you business or paying of debt you are taking away all your lobbying power. Don’t be fooled by fancy barns and big trucks. They don’t help you balance sheet.

  2. Blain says:

    Peter, while I’m sure the supply management of the dairy industry in Canada has contributed significantly to the wealth of your family, I struggle greatly with your arguments as they relate to the agricultural industry as a whole, or more widely to the Canadian economy. The reason Canadians and many other citizens of the world have enjoyed dramatic increases in their standard of living over the last 50 years is due to world trade. Globally, we are signficantly better off if individuals and countries specialize in what they are able to do best rather than protecting domestic industries that cannot compete on the world stage. If you attitude was applied to all industries, all goods and services in Canada would cost significantly more than they do now and we would all be substantially worse off. If Canadian farmers want to be profitable moving foward they are going to have to compete on the world stage on either quality, or price, or both. Protecting them just for the sake of protecting them is not the answer.

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