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Thursday, January 27, 2011

Eastern European regimes perished under the weight of supply management; Canadian dairy farmers prosper because of it

One man’s food is another man’s poison, or so it is said. It certainly does seem to be the case when it comes to supply management. Didn’t we wage a long, expensive cold war with the communist regimes of Eastern Europe over capitalist markets versus planned economies? And aren’t we supposed to have won?

Why then do we have the contradiction of supply management being alive and well right here in Canada—and under free-market governments like the Conservatives in Ottawa and Liberals in Quebec and Ontario? A rhetorical question, of course. No thoughtful person really believes our governments give more than political lip-service to free markets. They’re as quick as any government to intrude in free-markets for their own self-interests and that of their patrons.

Entire systems across the country are built on subsidies, protectionism, wealth redistribution, marketing boards, protective tariffs and other trade barriers and the like. Our provinces even erect trade barriers between themselves, for the sake of their self-interests. Our governments are only free-marketers when they can’t figure out how to otherwise control/manipulate them. We’ve got lots of examples of this: Ontario’s automotive industry has been awash in government cash for decades, and now we have massive price protection for foreign “green energy” providers, to name only two examples.

We even provide massive cash and tax subsidies to the very political parties that form our governments. It’s debatable whether the Green or Bloc parties would be viable without their taxpayer subsidies. And would the Liberal Party of Canada be able to fund a national program without the annual handouts?

Which brings me to the consumer boondoggle we call the National Milk Marketing Plan or some such. This would have been the envy of every communist regime in the world, except that hundreds of selected individual citizens are getting rich from it—communists wouldn’t have like that.

Many Canadians cross the U.S. border to buy basic groceries, including dairy products which can be half the price we pay here in Canada.  Ordinary Canadians are forced to pay twice the world market rate for dairy produce. According to a study published in December 2010 by the Montreal Economic Institute (MEI), in 2009 Canada’s milk producer price was third highest in the world, behind only Japan and Norway. All this so that dairy farmers in Quebec and Ontario can prosper at the expense of ordinary Canadians.

According to the MEI study, as quoted by the National Post, “the average value of a family farm has increased by 74% in the past 15 years, to almost $1.3-million. The average farm income is 15% higher than the average Canadian family income. The average dairy farm in particular makes a 25% profit margin.” And, as John Ivison points out in today’s paper, the agriculture industry in Canada received $7.9-billion in taxpayer handouts in 2008-09, about 31 per cent of that sector’s GDP.

In Quebec, farmers are protected—with taxpayer money—from the market by Quebec’s $650-million a year Farm Income Stabilization Insurance fund. From 1976 to 2004, producers in Quebec received government assistance, not including federal programs, to the tune of $5-billion.

Back-stopping this shameful attack on the pocketbooks of Canadian taxpayers and consumers are tariff barriers of 300 per cent on dairy, eggs and poultry imported into our country. Outrageous by any standard, but even more so considering the Conservative government’s pretence of being free-traders.

Countries with smaller populations and domestic markets and with similar standards of living to Canadians’, Australia and New Zealand, are managing quite well after discarding their central-planning approach to marketing agricultural produce, so why couldn’t we? No mystery there. Neither the Conservatives nor the Liberals have the intestinal fortitude to do what is best for all Canadians, for to do so means bucking powerful special interests and jeopardizes election chances in Quebec.

This is shameful and basically unfair, and is clearly a case of robbing the poor to give to the rich. This is a wacky intrusion in the market economy our governments pretend to admire.

 

© 2011 Russell G. Campbell
All rights reserved.

5 comments — This is a moderated blog and comments will appear when approved. Please don’t resubmit if your comment doesn’t appear immediately, and please do not post material that is obscene, harassing, defamatory, or otherwise objectionable.

  1. I live in Niagara Falls and cross the border every two weeks to stock up on dairy products and beer and to fill up my tank with gas.
    A gallon jug of milk is $1.98 at Tops Supermarket in Niagara Falls, New York.
    Cheese is half the price as in Canada. An eight ounce bag of shredded cheese for pizza is usually 2 for $4.
    Half price with yogurt and sour cream too.
    Any other groceries I buy at Canadian markets or at our local Farmer's Market.

    Last week I spent $70 on gas in the States compared to $93 in Niagara. The US price was the equivalent of 85 cents a litre whereas in Niagara it was $1.11.
    Beer is $11.98 for a dozen of the tall cans of imported Canadian and in Niagara it's $15.98 for a dozen regular cans.

    Altogether I figure I save from $40 to $50 spending just $110.

    Customs rarely ask for duty to be paid if the total purchase is under $100 and doesn't involve more than a dozen beer or any type of liquor or wine.
    They never ask about gas.

    I don't mind supporting Canadian Farmers but the American farmers seem to be doing just fine with their cheaper products.

    I have a question though... if the governments subsidize Canadian farmers to the tune of millions annually then why am I still paying double what the Americans pay?
    Isn't that 'double dipping'?
    NeilD

    ReplyDelete
  2. It should be a national disgrace, NeilD, but not enough of us are speaking out about the unfairness of making farmers more prosperous at the expense of ordinary Canadians who are struggling to make ends meet.

    Who speaks for us at Queen's Park and on Parliament Hill? Apparently, no one!

    ReplyDelete
  3. Moose-Head beer... made in Canada...
    Is an import out side of its native province.... an import...

    We have freer trade with the states then we do within our own country...

    The provinces are nuts.

    I wouldn't rag on the federal Conservatives too much since they've been stuck on a thin iced majority of sorts... least until Ford got elected mayor. That should be the enough of a signal by now for the conservatives to stop with the incrementalism and get on with freeing up the economy.

    I do suspect they will come election time. They've gotten just about all they're gonna get out of a minority by then.

    Else we start dumping incumbents.

    Though I don't like my conservative candidate for my riding. I'm not gonna yet say who but this individual is just not up to par economically.

    Though I know the person will vote along with the party against the opposition crazies, that doesn't make them directly in touch with the issues. and will just be a chink in the armor.

    anyway to go about changing that?
    I'm not a member of the party just a supporter.

    If not this time around I'll just hold my nose and vote for the party in general. but not if I don't have to. I may sit this one out if I know the CPC is headed for a majority.

    Thats about the only relevance the person will have. will be more of a burden long term then what its worth as a short term addition.

    good foreign policy at least.

    ReplyDelete
  4. American Farmers are subsidised using tax dollars, plus American milk contains RBst a growth hormone to increase milk production. Its being linked to all sorts of cancers and other illnesses. American fluid milk can be sold as whole milk even though its being re-constituted from milk powder. Read the chocolate milk label, first ingredient is Modified milk ingredients...garbage from dairies.

    Some things are just worth paying more for, the average farm in Canada is only growing in value because the land they are living on is being gobbled up by housing, and at some point its not worth keeping the farm.

    ReplyDelete
  5. ^I've decided that I'll be supporting that candidate after all.

    Though this individual may not be of my own preferences, the shoe at least fits in regards to representing the vein of conservatism that is acceptable to the larger bulk of supporters in this riding. That faction isn't so large or relevant in the party so as to upset the balance in a "negative" way.

    It would be unrealistic to want a more libertarian outcome if I was to abstain and allow the seat to remain NDP!

    This being federal politics, good foreign trumps economic policies since they can only (really) be enforced at this level of government. I'll have to make a stronger effort to find and back provincial & municipal candidates, that more closely focus on fiscal/economic issues to make up the difference.

    People often underestimate the role provinces play in the economic makeup of the economy. And if you also have NDP/tax&spend socialists running things, (as was the case when I was in Toronto), you certainly can feel the impact directly where you otherwise shouldn't!

    ReplyDelete

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