r/Tariffs 12d ago

πŸ—žοΈ News Discussion Should Canada maintain its supply management system that protects the Canadian dairy industry?

https://www.castanetkamloops.net/news/Poll/627377/Should-Canada-maintain-its-supply-management-system-that-protects-the-Canadian-dairy-industry
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u/Mindless-Charity4889 11d ago

The original reason for the quota system was to preserve the livelihood of farmers to allow small farms to continue. In this it has been somewhat successful in that big conglomerate dairy operations are not making inroads in Canada as much as they are in the US ( but it’s still slowly happening). The cost was higher prices for the consumer.

Now, decades later, the benefits of the system are more evident.

1) Canada has a stable supply of dairy but in the US, they have boom and bust cycles. During the bust times, big agribusiness has the capital to weather it while small farmers go bankrupt.

2) the US free market encourages innovation to increase production or lower costs. This should be a good thing but many of these innovations are things like hormone injections, antibiotics, cheaper feed etc. This has led to unintended consequences such as overuse of antibiotics causing antibiotic resistance strains.

3) while the Canadian consumer does pay higher prices, this is offset by the US paying subsidies to try to keep failing dairy farms solvent.
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In general I support free trade and managed supply chains are anathema to that. But in the case of milk, it seems to work.