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Supply Management: The Facts and Proudly Canadian

June 21, 2012 - Ottawa

Flawed Martha Hall Findlay report uses misleading research

Key Points:

  • The Hall Findlay report relies on misleading data, citing the Canadian price for 4 litres of milk as $9.60, which is $3 to $4 more than what most consumers pay. This misleading data does not match the experience of consumers in the Canadian marketplace
  • It is a fallacy that Canada cannot conclude trade agreements and maintain supply management. Since 1986, Canada has concluded NAFTA and bilateral agreements with Jordan, Colombia, Peru, Costa Rica, Chile, Israel and EFTA (Switzerland, Norway, Iceland and Liechtenstein)
  • The dairy industry is a Canadian success story, present in all ten provinces and is one of the top two agricultural sectors in 7 of the 10 provinces

Former Liberal MP Martha Hall Findlay’s inaccurate assertion in her report released today, Supply Management: Problems, Politics – And Possibilities, that Canada’s supply management system for dairy products overcharges consumers and interferes with international trade negotiations is based on deeply flawed research, Dairy Farmers of Canada (DFC) says.

Hall Findlay’s misleading data suggests that four litres of milk costs $9.60 in Canada. In fact, data collected by the firm Neilsen indicates the weighted average1 retail price of milk in Canada, is $1.45, cheaper than the $1.65 per litre in New Zealand and $1.55 per litre in Australia.

“It’s extremely unfortunate that Ms. Hall Findlay would make such potentially damaging statements without first making sure she had her facts straight,” said Wally Smith, President of Dairy Farmers of Canada. “It’s also important to remember that consumers in other places where the dairy industry is subsidized, like the United States and the European Union, pay twice for their dairy products — once at the store and again through their taxes.”

On the trade side, Smith took on the fallacy that supply management makes it impossible for Canada to successfully conclude trade agreements. For example, Smith noted that just earlier this week Canada was invited to join the Trans-Pacific Partnership negotiations and is also actively working on a bilateral trade deal with the European Union. In addition, since 1986 Canada has concluded NAFTA and bilateral agreements with Jordan, Colombia, Peru, Costa Rica, Chile, Israel and EFTA (Switzerland, Norway, Iceland and Liechtenstein).

“Supply management works for farmers, processors, consumers and governments and we are extremely proud of this successful Canadian system,” stated Smith.

The dairy industry is present in all ten provinces as one of the top two agricultural sectors in 7/10 provinces, providing a large variety of dairy products to Canadian consumers. The reasons supply management was put in place years ago – price volatility and market concentration – are still very present today.

There was a 1% excess in world supply of milk in 2008-2009, and dairy farmers faced a 30% decrease in price. This kind of price volatility has lead to government bailouts in the U.S. and Europe. In Canada, the markets for everyone in the dairy industry and consumers remained stable.

1The average price paid by consumers based on purchasing patterns. It includes prices in all stores, all types and all formats, with the most popular formats having the greatest weight, for a one-year period.

For more information
Thérèse Beaulieu
Assistant Director, Strategic Communications
613-236-9997 x 27451
Cell: 613-371-5023

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