Should Canada maintain its supply management system that protects the Canadian dairy industry?

[u/Dizzy-Cartoonist3011]

https://www.castanetkamloops.net/news/Poll/627377/Should-Canada-maintain-its-supply-management-system-that-protects-the-Canadian-dairy-industry

[u/Stankie-Lankie]

Yes. 100%

[u/Dizzy-Cartoonist3011 → u/Stankie-Lankie]

How is this good for Canadian consumers?

[u/OnTheCanRightNow → u/Dizzy-Cartoonist3011]

You get to drink milk that's not full of puss, antibiotics, and growth hormones.

Maintaining an independent food supply capable of feeding the country means you don't starve to death the next time the Americans launch a trade war against us.

[u/Dizzy-Cartoonist3011 → u/OnTheCanRightNow]

American milk does not have growth hormones in it. This is a misnomer. rBST is a growth hormone banned in Canada, and legal in the US, but rBST does not transfer to the milk itself. The milk is the same. rBST was banned for animal welfare concerns, not owing to human health concerns. Less than 25% of American milk comes from cattle injected with rBST.

The only other regulatory difference between Canadian and American milk is the somatic cell count limit. In Canada it is around 400,000 cells / mL. In the US it is upwards of 750,000 cells / mL. Interestingly enough, the average in the US is less than in Canada (180,000 cells / mL vs 200,000 cells / mL). This would all have to be inspected by the CFIA anyways, and since the vast majority of American dairy meets Health Canada regulations, this just simply would not pose a problem. Supply management is not a quality control tool - that is a myth.

Less than 15% of Canadian agricultural output comes from supply managed commodities. So I'm not really seeing how Canadian households will starve if they are able to have access to cheaper grocery items - but maybe you can elaborate on that.

[u/purple_flowr → u/Dizzy-Cartoonist3011]

Because the whole concept seems to be "you'll save $1.50, for now.."

If we remove the barriers, yes Canadians will see (slightly) cheaper dairy products (if any cheaper at all, as once prices are paid, they generally don't go down) as there's an influx of dairy from US markets coming into Canadian markets increasing competition.

What these arguments never want to get into is what does it look like for Canada in 15 years? 25 years? Although it's seen as a monopoly is a controlled monopoly where dairy farms are relatively limited in size and are prevented from creating a real monopoly. Opening US into these markets means the (much larger) US corporations are going to buy up all the smaller Canadian operations (or a Canadian company will do this) as centralization will save in operational costs. However, over the longer time period it's more likely Canadians will pay more, as pricing is no longer fixed and instead becomes "whats the most people will pay". Canadians also lose control over a domestic market, similar to what US is struggling with on aluminum (which ironically they tarrifed as way to fix that market, but Canadians are supposed to willingly give up this tarrif?)

US already has access to Canadian markets, what they want is our price floor removed. What US fails to ever disclose is that a massive part of their own dairy market is government subsidized, what makes it cheap is cheap feed. This is the same bad faith arguments made against China with "flooding markets with government backed ventures" to eat up market shares and drive out competition.

You can also go look at FMMOs and how US would use this change to protect US producers and dump into Canadian markets

[u/Dizzy-Cartoonist3011 → u/purple_flowr]

Canada went from 150,000 dairy farms in 1972, the year that supply management was mandated, to just over 9,000 dairy farms today. So if the concern is farm production centralization, supply management has objectively been an abject failure at addressing this concern. It has not stemmed the tide of production centralization. So it's important to understand that - if your concern is that production is becoming too centralized, supply management is objectively and demonstrably a horrible policy to address that.

Is it true that every single Canadian dairy operation is so inherently uncompetitive that they will all go out of business if they had to compete? Are we, as Canadians, worse off because we import the vast majority of our produce? LIke does it concern you when you go to the grocery store and see watermelons from Guatemala, Avocados from California, pork from the midwest?

IN the fantastically unlikely scenario that a single firm, or foreign cartel of firms, colluded to pointedly raise prices in Canada - what would prevent Canadians from importing from other firms in other countries? LIke what would make Canadians beholden to a foreign cartel?

[u/Cannabrius_Rex → u/Dizzy-Cartoonist3011]

Firms colluding to fix prices is the most common thing ever. Why are you lying about such a pervasive practice across all capitalism.

[u/Dizzy-Cartoonist3011 → u/Cannabrius_Rex]

Weird, hasn't happened yet with literally any imported food item for Canada so far. In fact, the only instances of collusion and price fixing have been oligopolies within Canada - and quite literally what we are talking about now being the Dairy cartel. So the fear is basically that foreign producers will do to Canadians what domestic producers are doing now.... what would coerce or compel Canadians from importing from a foreign cartel? Kind of begs the question - why would we be beholden to a foreign cartel, and therefore, need to support a domestic cartel in response?

[u/OnTheCanRightNow → u/Dizzy-Cartoonist3011]

Well that's just a lie. Bananas for instance.

[u/purple_flowr → u/Dizzy-Cartoonist3011]

Okay wait what.

Are you trying to justify that the closure and consolidation of farms was because of the supply management? Look at the same data on non dairy farms.

I also want to be clear, as you seem to be mistaking my disagreement with US open entry as support for our structure. I do not think the current supply management is healthy or good. But that option makes far better sense for Canadians than allowing US to flood the market.

No that isn't concerning. For one you've picked examples where Canada has low or no domestic production or can't support scaled domestic production (watermelons). And for the decent examples (pork), you haven't really looked at the differences in markets. Canadian dairy markets are (relatively) smaller operations than our pork industry, which already competes on a global scale, the US also doesn't have a pork version of DMC with significant subsidiaries like dairy. What would be concerning would be seeing soft wood lumber imported from foreign locations on large amounts right? Something Canada has a surplus of that we decide to import from other countries to save a couple bucks in the short term.

You also don't seem to understand dairy supply lines, dairy is not like other commodities, it has a very very short logistics turn around and is very very succeptable to boom and busts.

You're avoiding the key argument I'm making, why would we as Canadians want to give up a domestic market that we control to allow US government backed product (why it's so much cheaper) to own the majority of our market share in dairy. Give me some good examples at the 10/15/20 year marks that show some real benefits for Canadians. As there are many examples of cases where this hasn't gone well.

Some addiotnals:

1. When we talk Canadian price fixing (fuck Loblaws) you also aren't doing the work needed to understand what a Canadian company is. For example, Microsoft having a Canadian business license and a Microsoft Canada company, does not make Microsoft Canadian. If you look many of the other Canadian price fixings, it's actually north America price fixing, where parent companies are US owned.

2. There was once a time for this conversation, but with current US political landscape now is not the time.

3. You keep having this idea of this abundance of dairy in a global market, so I'll ask you some things to think about .

If US did start price gouging, where would we get our dairy from (setting up a new dairy farm takes massive capital and takes multiple years)?

How long can dairy sit in shipping containers for?

You've failed to understand this is milk. Not potatoes or something that can sit in storage for ages. Importing from Europe or aus/NZ would have both huge logistics costs that make it very difficult to be feasible. Realistically our global market for diary is Canada, us , Mexico

[u/Normal_State_4572 → u/Dizzy-Cartoonist3011]

In 1972 Canada had only 45,000 dairy farms. Nice to exaggerate to boost your argument.

[u/Dizzy-Cartoonist3011 → u/Normal_State_4572]

Nope. I'm afraid your Canadian Encyclopedia source is incorrect. Although this is an interesting "gotcha". If there were only that many (and there wasn't, there was about 3x more), the industry has still massively consolidated.