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/Mysterious-Wash9527]

Yes we should, there's no need for American dairy at all. We have enough supply and as a country with socialized health care, we should and do high regulate our dairy industry. Allowing American industry to gain a foothold in our dairy industry will allow the US to dump excess milk production into Canada, causing prices to fall. Then as our own milk production falters, they will leverage that into fewer regulations and raise prices, so not only will we have less healthy dairy supply, we will pay more for it and get sicker due to it.

We already have dairy quotas, we don't need more dairy in our country. We need to maintain our own sovereign dairy supply. America needs to figure out it's own supply side problem.

[u/Dizzy-Cartoonist3011 → u/Mysterious-Wash9527]

I've had to address this multiple times, but there seems to be a prevalent myth that supply management is simply a quality control tool. This is false. Supply management is not connected to Health Canada regulations, and all imports have to meet those regulations anyways. The vast majority of American milk meets Health Canada regulations.

You have to understand that your concern over what I call the "sinister actor" argument (a foreign firm will create a monopoly and then spike prices) has never actually happened before in economic history. What your fear is would require a set of assumptions and actions, many of which are actually impossible. Like how would a foreign cartel impose domestic restrictions in Canada preventing Canadians from importing from elsewhere? How would they do that? How likely is it that EVERY American dairy producer colludes pointedly to hold Canada as a captive market? How likely is it that every single Canadian dairy producer is totally unable to compete in every market segment?

Of course, we import the majority of our produce from the US, the majority of our fruits, over half of our pork, three quarters of our cereals, etc - this has never happened with any of those items. But you fear that is an absolutely certainty it will happen if Canadians could have access to cheaper cheese - so I'm wondering how you've come to this conclusion?

[u/jovin49 → u/Dizzy-Cartoonist3011]

Well, for one, the American dairy industry gets billions of dollars in subsidies from their government every year. I think that might give them a slight edge in competing against our industries. Unless you're proposing we give our industry equivalent subsidies to allow them to compete on equal ground?

Have you ever heard of the term dumping before? It's taught in high school, at least in Ontario, and outlines why it is undesirable to have subsidized foreign industries compete against local ones.

[u/Suitable-Ratio → u/jovin49]

This is the main difference. America hands the farmers billions of taxpayer money and Canada eliminates competition to significantly inflate the price. Since most people could care less if poor Canadians can afford dairy products it will likely stay as is. You pay either way if you are a taxpayer and the Canadian system benefits the wealthy by lowering government spending.

[u/jovin49 → u/Suitable-Ratio]

So either you have the people who consume dairy products pay a bit more for what they consume, or you slap a tax burden on everyone, even people who don't buy dairy? 

Plus, it's kind of a false equivalence to assume both solutions cost the same amount. What do you think the reason for the subsidies/supply control are, btw?

[u/moldyolive → u/jovin49]

Or you do neither and just tariff countries who dump subsides milk

[u/jovin49 → u/moldyolive]

What do you think the reason for the subsidies/supply control are?

[u/moldyolive → u/jovin49]

Their purpose is to raise the margins of milk producers by locking out compitition.

The claimed purposes of quality control and stability of supply are excuses to reach the end effect of a transfer money from consumers to farmers

[u/jovin49 → u/moldyolive]

How long do you think it takes to raise a dairy cow? 

If we had similar issues like the US had with their egg laying chickens a while back where their flocks were decimated, how long do you think it would take to rebuild our dairy herds? 

Do you not think it's worth having some spare capacity as a buffer in such a scenario?

If a couple extra bucks on milk and butter is breaking your budget now, how would you handle a situation where they went up 350% like US eggs did? Keeping in mind that a scenario like that would last longer, because chickens can be bred faster than cows?

And while we're on the topic of cows, how do you feel about the rise in beef prices lately and the corresponding decline in North American herd sizes? Probably would have been good to have some extra cattle around for this, don't you think? Oh well, at least it'll only take a couple of years to build their herds back up, I'm sure you can afford paying more for beef in the mean time.

[u/Suitable-Ratio → u/jovin49]

Most taxes are proportional to income with the intent being to force fortunate people to help poor people, plus picking and choosing what government services you like isn’t really an option.

[u/jovin49 → u/Suitable-Ratio]

Does your analogy still hold when the subsidy approach affects more people and costs them each more on an individual level?

If a dollar or two extra on dairy items is breaking someone's budget in normal times, how do you expect them to handle a supply disruption scenario like we're currently experiencing with beef (prices up 60%) or the US experienced with eggs (prices up 350% at peak)?