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Why Supply Management Works for Canadians

Last Updated: February 23, 2017

It builds communities

Dairy farmers get a fair return from the market, allowing farm families to make a living that is similar to average Canadian working families without relying on government subsidies. Farmers spend 90% of the farm income on the farm’s operation. Farmers spend money locally, re-investing in the local economy across Canada.

It keeps prices stable

Prices of milk and dairy products have risen less than the Consumer Price Index in Canada over the past 30 years. The price consumers pay for a litre of milk in Canada is roughly similar to that in China, New Zealand, the EU and many parts of the U.S. And a few years ago, prices around the world increased significantly and quickly when the last world food crisis hit. In contrast, farm and retail prices for dairy in Canada have remained stable.

It requires no government assistance

People living in the EU and U.S. pay twice for their milk — once in the store and a second time through subsidies. In the U.S., there are dairy subsidies of roughly $4 billion paid each year to the dairy industry. That’s not the case in Canada -- Canadian dairy farmers receive no subsidies for their milk. Those who propose a change in dairy system in Canada have never answered the following question: “would you prefer a system that pays hundreds of millions each year in taxpayer dollars to dairy farmers, with no guarantee of lower retail prices?” That’s not our preferred approach: we would rather continue to get our returns directly from the marketplace.

Retail prices are comparable worldwide

The part of Canadian disposable income spent on food – and dairy products – has decreased over the years. The USDA reported that American cheddar cheese cost $12.54 per kilogram in 2011, while it cost $13.70 in Canada. The price of milk in stores varies from region to region and store to store. It costs between $4.00 to 6.00$ for 4 litres in Canada ($1 to $1.50 a litre), while in the US, consumers pay about $1.00 a litre, in China $1.70, in Australia $1.00 to $1.55, in New Zealand $1.65.

It lets in imported products

Critics say that Canada closes its doors to dairy imports. The statement is just plain wrong. Canada does not close the doors to imports. In fact, about 5% of dairy products on Canadian shelves are imported tariff-free! The EU, with heavy subsidies for dairy products, exports to Canada 10 times more dairy products than what it imports from us, even though it has more than 500 million consumers. Supply management hasn’t stood in the way of Canada’s ability to successfully negotiate trade agreements.
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