Myths & Realities
For many of those cheese imports that are subject to duties, the tariff is only pennies of the price consumers pay at checkout. For example, on imported Parmesan cheese that costs $18-$35 a kilogram, the tariff is only 3 cents per kilo– or less than .2 per cent of the price the consumer pays.
Every country in the world has policies that ensure strong domestic agricultural production. While Canada has a supply management system for dairy products, many other countries in the world choose to directly or indirectly subsidize domestic production, which Canada does not.
For example, European farmers receive $55 billion Euros in subsidies per year and the U.S. pays $4 billion in dairy subsidies.
Eliminating Canadian supply management would not discourage foreign governments from subsidizing their domestic agricultural sectors. In fact, US farm subsidies are a pillar of their political system, and the Europeans are not proposing cuts to their subsidies under current trade negotiations.
Our farmers are paid what it costs to produce their product in the market. And the system of supply management ensures the supply of quality milk and dairy products is able to meet consumer demand.
Retail prices for Canadian dairy products are comparable to prices in other countries. For example, the USDA reported cheddar cheese costs $12.54 per kilogram in the U.S. and $13.70 in Canada (2011). Canadians are also spending less on dairy products — the percentage of their income spent on dairy has fallen from 1.2 % in 1990 to 1.05% in 2010.
In fact, Canadian consumers have a good deal on food. On average, households only spend 9 to 12 per cent of their income on food and alcohol, one of the lowest in the world. By February 14, Canadians had earned enough money to pay for food for the year, making Canada and the U.S. the countries with the most affordable food in the world.
Canadian consumers are savvy and recognize quality products are not always the least expensive. A recent poll by Canadian Business found 81% of Canadians want to retain supply management and 68% would pay higher prices for dairy and poultry products if they needed to in order to maintain these industries in Canada.
Unlike many other countries, Canada does not close the door to dairy and cheese imports. In fact, about 5% of dairy products on Canadian shelves are already imported tariff-free. That’s Canada delivering on signed WTO commitments, something other countries have not done.
Comparatively, the European Union (EU) imports almost no Canadian dairy products, despite the fact that the EU is a market about 15 times the size of Canada. The EU only allows 10 per cent the amount of imports of dairy products that Canada allows from European countries, and is asking for additional access to the Canadian market without offering access in return.
Since 1986, Canada has concluded NAFTA and bilateral agreements with Jordan, Colombia, Peru, Costa Rica, Chile, Israel and EFTA (Switzerland, Norway, Iceland and Liechtenstein). Canada is close to concluding a comprehensive trade deal with the European Union (CETA), and has been accepted in the Trans-Pacific Partnership (TPP) negotiations. Supply management has been one of many issues on the table, but it has not stopped any of these agreements from being successfully completed.
When the United Kingdom and Australia deregulated their dairy industries, farm prices went down but retail prices went up. For example, in Australia prices for milk in capital cities rose 27 cents per litre in the three years after deregulation compared to 9 cents per litre in the three years before deregulation, according to Australian Bureau of Statistics figures.
In New Zealand, the most competitive milk-producing country in the world, retail prices for dairy products are comparable to ours. In Canada we pay an average of $1.45 per litre as opposed to $1.65 per litre in New Zealand.
Compared to other beverages, milk is the most cost-effective product with any nutritional value offered to consumers. (AC Nielsen 2011 data).
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The voice of Canadian Dairy Farmers
We support supply management because it works!