Polarizing. That’s the word that best describes the Canadian dairy industry. As the humble producers of an animal-based food product, the industry has a surprising ability to be a lightning-rod of debate and politicking from coast to coast. The root-source of this contention? Supply management.
At the slightest provocation, the national press in this country will take to prophesying the impending doom of supply management. This is typically bolstered with weakly researched commentary by purported “food sustainability experts” who have clearly spent far more time picking the font for their thesis than they have wandering around farms. Long story short, many of the loudest voices about supply management often have the loosest grasp on how and why it really works. Among the most prominent examples of late has been U.S. president Donald Trump.
Amidst all the rhetoric, let’s cut to a few basic Canadian market realities. Firstly, Trump is clearly no policy-wonk. When he stood at that Wisconsin podium a year ago to pout about how unfairly Canada treats the U.S., the comments were far from accurate.
The real issue at play is that the Canadian dairy industry had recently created and implemented a new ingredient class of milk and priced it at world prices. The U.S. wasn’t used to this market competition; it undercut them, and multiple U.S. dairy operations along the border cried foul as their export market evaporated.
The U.S. is a big fan of aggressive business tactics. But not when they’re on the losing side of the deal.
The U.S. dairy industry is in trouble. Farms are getting bigger. Technology is getting better, and they’re producing more milk than ever before. This is not a positive situation unless you have a market for the surplus.
The world is facing a general downtrend in milk pricing. The reason: rampant over-production. When anti-supply management zealots take to the newspapers, radio and television to shout about our “antiquated policy,” they never seem to dwell on the hard fact that outside of Canada, most Western dairy industries are facing record sell-outs, bankruptcy and farm kids who refuse to take up the family trade. Yet, this is precisely the market structure they feel Canada should emulate? Wrong.
As I see it, the debate really comes down to the basic concept of sustainability.
Our industry is healthy and displays slow but steady growth. By controlling domestic production, we are limiting wastage, and regulating price. This price regulation allows for stability in operations and strategic reinvestment. This in turn, leads to industry leading standards and quality.
Sure, supply management has its challenges, and back-to-back market-access trade concessions under the Canada-EU Comprehensive Economic and Trade Agreement (CETA) and Trans-Pacific Partnership (TPP) haven’t helped. But at the end of the day the Canadian dairy industry is outwardly self-sustaining. We are sustainable while the U.S. dairy market is not. If one turns down the rhetoric, this is what really counts.
Aside from the push for Canadian market access, the U.S. dairy industry has been looking at our system with increased interest.
I was invited down to Washington State two years ago to speak to a conference of organic producers to outline the mechanics our economic dairy model. Together with local organic producer and BC Dairy Association board member David Janssens, we spent over two hours on stage answering questions.
In Wisconsin, a producer group recently invited out several representatives from Dairy Farmers of Canada to talk about supply management.
Controlling production is the path to sustainability. While they will likely paint it a different colour and stick an eagle on it, my prediction is the U.S. will increasingly move towards a structure of supply control.
In the meantime, amidst ongoing NAFTA negotiations, Canada needs to stand firm against U.S. demands. It’s notable that all four federal parties in Canada pledged support for supply management. The reason is that, economically, it clearly works.
Dairy is a basic foodstuff, but it’s also so much more. Dairy is a core component to national food security and sovereignty. Dairy is a major economic contributor and employer of the national rural economy. Dairy is a historical national industry yet also fosters world-leading research and technology.
In a recent anti-supply management themed radio interview on the CBC, a food sustainability academic stated, “We’re the only industrialized country with supply management,” in a manner that implied that we’re behind the times.
I suggest to you the opposite.
While supply management may not fit easily into the open-bordered concepts of the free-trade model, it has continued along just fine in light of many prior trade agreements.
I am confident the structure will endure and, with some collective Canadian support, we’ll all be drinking supply-managed milk in the years to come.
Trevor Hargreaves is director of producer relations and communication at the BC Dairy Association.