Supply management is in trouble

Good news. Canada is joining talks for the Trans-Pacific Partnership, which will open lucrative new trade opportunities — if we give up supply management.

Or so you’d think by reading national newspapers these days.

Ever since Canadian participation in the TPP talks was announced last month, columnists in the Globe and Mail and National Post have been delivering a relentless attack on supply management, and last week were wriggling like puppies following an op ed by Liberal leadership hopeful Martha Hall Findlay. She wrote:

“Dairy farms are governed by a byzantine system that prices milk based on intended usage, locks out most foreign products with exorbitantly high tariffs and even determines how much farmers can produce. Everyone suffers. First in the line of people harmed by supply management are consumers — Canadians are forced to pay two to three times as much for whole milk as Americans.

“It is simply untenable that Canadian families pay upwards of $300 more a year than they need to, for milk alone, let alone higher prices for other products like cheese, yogurt and ice cream, to subsidize a tiny number of relatively well-off farmers. Worse, it’s regressive, which means that the ones who suffer most are the low-income families — the very ones who most need affordable access to nutrition.”

Ms. Hall Findlay continues:

“In contrast to the fewer than 15,000 supply-managed farmers, there are more than 10 times that many — over 210,000 farmers (92 per cent of the total number of Canadian farmers) — that are directly dependent on export markets; they either export their products or sell them domestically at prices set by international marketplaces.”

So, not only are wealthy supply-managed farmers depriving poor children of food, they’re depriving their fellow farmers of a decent income. Case closed, or so it would seem.

There are a couple of reasons for this relentless assault. One is that high milk prices are easy column fodder on a slow news day. The other is that the TPP is important and the columnists need to write about it, but don’t know what’s in it.

In fact, hardly anyone knows what’s in it. The TPP is a U.S. initiative, but the U.S. Trade Representative’s (USTR) office has signed a confidentiality agreement with participating countries and the details are not being shared with anyone else, including the U.S. Congress.

Last week 130 members of the House of Representatives sent a letter to the USTR asking for more transparency. That followed a similar letter from a group of U.S. senators:

“Indeed, the negotiations USTR is pursuing will create binding policies on future Congresses in numerous areas where there is significant public interest, including policies related to labour, environment and natural resources, land use, food, agriculture and product standards, intellectual property rights, state-owned enterprises and government procurement policies, as well as financial, health care, energy, telecommunications and other service-sector regulations.”

You mean to say that these items are also in the TPP? You wouldn’t know it from reading the national media.

Sure, some competitors have a wish list, but that doesn’t mean each item is a deal breaker. Fonterra, New Zealand’s dairy quasi-monopoly, and some U.S. dairy processors say they want access to the Canadian market. Well, yeah. Fonterra wants access to the U.S. market too. If you think that’s going to happen, then you’re…, well, a columnist for a newspaper in Toronto who hasn’t figured out the dilemma: the U.S. isn’t going to drop its dairy program, or its indirect support of the poultry industry. If Canada drops border controls, then it either matches the U.S. programs, or loses the industries. That’s the key point that SM producers need to emphasize.

TPP or not, they have a big public-relations problem. Traditional arguments won’t get them out of it. Trying to claim that milk and poultry in the U.S. aren’t cheaper won’t work, nor will talking about how Canadian product is safe. “It won’t make you sick,” is not a good marketing pitch.

When SM was introduced, farmers in effect made a deal with consumers — “Give us a fair price and we’ll stay out of your pocket as a taxpayer, and not ask for U.S.-style subsidies to dump our overproduction.”

Most consumers today are probably willing to make a new deal to ensure their milk doesn’t come from Wisconsin, Minnesota and California, and their chickens and eggs from Georgia. Often, neither the farmers, the workers or the animals are well treated in the U.S. system. Canadian farmers need to explain that, and demonstrate that their system is better, not just for them, but for the cattle and birds in the barn. Otherwise they’re going to lose support for supply management, with or without the TPP.

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