I am writing this letter in response to an article by The Fraser Institute entitled "Canada can eliminate supply management by following Australia’s lead.
The three authors, Jon Berry, Alan Oxley, and Dan LeRoy say Canadian policymakers would be well advised to learn lessons from Australia about phasing out supply management in a number of agricultural sectors. Their article is about Australia doing away with supply management in the dairy sector in 2000.
The authors write a glowing report on what a success this has been for Australia. They say consumers are paying less for milk, national supply has been maintained, and larger farms are driving much greater productivity allowing milk products to be the third biggest agricultural export after beef and dairy.
I would like to question this Australian success story, and offer my perspective as a Canadian dairy farmer.
First let’s talk lower dairy prices to consumers. If the authors say it is the case in Australia then I will have to take their word for it, but someone paid the cost somewhere.
I draw your attention to the Canadian consumer reality - that the previous trade deals, which have negotiated away percentages of the Canadian dairy market, have not seen Canadian consumers reap the benefits of cheaper dairy products as promised by negotiators and others wishing to see the dismantling of the supply management system.
What has happened as a result of the undermining of the system is an ever-increasing divide between what the dairy farmer is receiving for producing milk and what the consumer is paying. Because of the opening up of the market, farmers are receiving 1980 prices for their milk from processors, and are struggling to cover the cost of production and stay in business.
On the other hand, dairy processors have seen their profits double in the last 20 years. It is supply management that has become the scapegoat.
The authors state that the stabilizing of the supply and price of Australia’s dairy products allowed for inefficient farms and the consolidation in the industry is so much more efficient. Supply management allows farmers to know what they will receive for their product. Nowhere does it give permission to be inefficient, regardless of size, for the product must be produced within the return, or there simply is no farm. How is that inefficient?
The authors are really implying that only large-scale farms can be efficient. Why didn’t they come right out and use the term industrial farming, because that is what they are supporting. Yet consumers are increasingly (and with good reason) growing disenchanted with industrial farming.
There is also the bigger question that the authors neglected to address with their support of industrial dairy farming in Australia, and that is the health of rural communities. Just how are they doing socially, environmentally, and economically under the dismantling of supply management?
There is a lot more to look at than the dollars that come out of industrial farming and the fewer number of pockets those dollars go into.
I would argue that Canada’s supply management system, prior to the start of its gradual erosion by government bureaucrats, greatly stabilized rural Canada. Farming is far more than an industry. It is the fibre of rural Canada. It appears so many of our decision makers have no understanding of this fact.
The authors were so impressed with Australian dairy now being its third largest agricultural export. But they failed to mention where it is being exported or who it is impacting. United States dairy farmers can tell you. Australian dairy products are coming into the United States taking market share. Australia is a very big reason American farmers have not been able to meet their cost of production in the past two years.
Australia dairy products are a big reason the United States wants into the Canadian dairy market. It seems Trump is not the only one to stray from the facts. The Fraser Institute article is one sided and misleading. Not everything that is printed can be trusted.
We deserve the whole story to be told and debated.
- Doug Campbell is a dairy farmer in Southwest Lot 16, P.E.I., and is a district director of the National Farmers Union
