Canadian Manufacturing

Supply management not raising prices, blocking TPP, farmers groups say

Trade talks have placed Canada's supply management systems under the microscope in recent weeks



OTTAWA—Groups representing Canada’s dairy, egg, chicken, and turkey farmers are hitting back against critics. In a joint statement, the groups affirmed supply management does not raise prices for consumers, nor is it blocking Canada’s participation in the Trans-Pacific Partnership.

“For months, Canadian farmers have endured a concerted attack on the system that brings Canadians the dairy, poultry and egg products they trust,” the groups said.

Foremost, Dairy Farmers of Canada, Chicken Farmers of Canada, Egg Producers of Canada and Turkey Farmers of Canada said supply management does not raise prices for consumers.

“We do not set retail prices. Retailers and restaurants charge what they feel the market will bear,” the organizations said. “They set the price for food – and for everything else – for many reasons that have nothing to do with how much the farmer receives, including retailer competition, brand positioning, cost of competing items and specials to get consumers in the store.”

Despite not setting prices, the groups noted chicken prices have rose only 3 per cent over the past two years, while the price of other, “freely traded” meats, increased 20 per cent. Similarly, consumers paid $1.30 per litre for fresh milk in Canada, compared with $1.83 in New Zealand, $1.81 in France, $1.15 in the U.S, $1.19 in Germany, and $2.35 in China, according to the farming organizations.

“The biggest determinant of how much we pay for dairy, poultry and egg products isn’t supply management – it’s where and when we shop,” the groups said.

The figures stand to stark contrast to a recent Montreal Economic Institute report that notes supply management is hurting business as well as consumers.

The think tank argued negotiations surrounding the TPP present an excellent opportunity to do away with Canada’s supply management systems. Since then, numerous reports have emerged the country’s supply management systems may be standing in the way of Canada’s participation in the mammoth trade deal that will affect 40 per cent of the world’s GDP.

The farmers organizations, however, argue supply management is not blocking the TPP.

“The Government of Canada has successfully negotiated twelve trade agreements with 43 countries since 1994 and all of these have opened up new markets, improved trade rules, and preserved supply management,” they said. “This is a successful negotiating formula and we are confident that the government will be able to do it again at the TPP. It works because Canada is already the 6th largest importer of agri-food products and 1st on a per capita basis; we don’t need to take any lessons on market access from other countries.”

The groups noted that every country involved in the TPP has something its wants to keep. They pointed to United States’ history of import protection in the sugar and dairy industries, Japan’s protection of its rice sector and New Zealand’s defense of its pharmaceutical programs as examples.

According to the organizations, the four supply managed industries represent more than 15,000 farmers, close to 350,000 jobs and contribute $27.5 billion to Canada’s GDP.

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