Frequently Asked Questions
Does supply management make products more expensive?
No. The retail price of dairy products has evolved in line with that of other food products in Canada. The percentage of disposable income going towards food and dairy products is decreasing. At the same time, dairy farmers receive their income from the sale of their product, not from government subsidies.
Would consumers get cheaper products without supply management?
No. Deregulation (removal of regulated systems) of the dairy industry in UK, Australia and New Zealand have shown that farm prices came down, but consumer prices kept increasing with inflation. A similar scenario happened when prices for beef animals dropped because of BSE in 2003: farmers suffered, but retail prices remained pretty much the same, except for a short time, where they were lower. The intermediaries simply increased their own margin after deregulation. Neither farmer nor consumer benefit from deregulation.
Does supply management block imports?
Canada gives more access to imported products than many other countries give in any sector! Canada currently imports over 6% of the market for dairy products and more than 7.5% for poultry. We import more than some countries that are perceived as being more “free traders”. In contrast, the United States gives only 2.75% access to their market for dairy products and Europe offers a mere 0.5% for poultry. The Canadian dairy industry imports ten times more cheese from the EU than it exports to the EU. Moreover, once the CETA deal is implemented, tariff-free imports of cheese will rise from 5% of all cheese consumed in Canada to 9%!
Is supply management a barrier to trade?
No, supply management has not prevented Canada from concluding any trade deals, including the recent a trade deal with the European Union. Canada is also participating in the Trans-Pacific Partnership negotiations. It’s important to understand that Canada is not alone in maintaining policies to ensure a strong domestic agricultural industry. Many other countries, including the European Union and the United States enact policies that subsidize directly domestic production – something Canada does not do for supply management sectors. Canada continues to deliver on its signed WTO commitments to trade by allowing access to imports - over 5% of dairy products on Canadian shelves are imported, tariff-free. That’s Canada delivering on signed WTO commitments, something other countries have not done.
The voice of Canadian Dairy Farmers
We support supply management because it works!