Thursday, March 21, 2013

Supply management is a failure

After four decades of supply management for Canada’s poultry industry, it’s obvious that it has been a failure.
Instead of survival of family farms, we a sharply-reduced number of multi-million-dollar operations.
Instead of security for future generations of farmers, we have greater risks and uncertainties than ever, largely because the benefits of steady and high profits have been squandered on ever-increasing prices for quota.
Instead of the promise of a steady supply of wholesome food, we have a high-cost, provincially-balkanized system resistant to consumer preferences and marketing innovations.
The poorest Canadians cannot afford what Canadian poultry farmers produce; they could easily afford the same products at U.S. prices.
The system is run on inventories, not market preferences.
What I mean is that whenever poultry companies can’t sell what they offer, it backs up as inventories and that prompts the supply-management marketing boards to reduce production.
That clears the inventories – the least desirable products available ag the least desirable locations and times of the year.
Meanwhile, the demand for the most desirable products at the most desirable locations and times is not met.
Even the safety valve of imports to alleviate shortages is now under the influence of the poultry marketing boards. So, for example, CAMI International Poultry Inc. of Welland, Ont., is unable to fill the demand for Hong Kong dressed chicken in Toronto and the surrounding area.
Chicken that is produced at the highest cost in Canada, such as in Newfoundland, ends up in the cities where demand is the greatest, such as Toronto and Montreal.
I got a kick out of the article the Globe and Mail that credited Eugene Whelan with helping to bring perestroika to Russia.
If so, Whelan’s advice ran totally counter to his support for supply management.
That was a proven failure in Russia. It’s a failure today across Canada.
I could provide dozens more examples of how supply management has been abused, misused and failed, but you probably have more than enough examples of your own.