DFC has been advocating for policies that stabilize the market and bring fair returns to farmers since the Second World War. In the 1960s, government officials and farmers agreed that production discipline is the key to avoid the well-known boom and bust cycle and instil stable market conditions.
To ensure the sustainable development of efficient Canadian dairy farms, the federal and provincial governments implemented a supply management system for dairy based on collective marketing and production that is adjusted to the needs of the Canadian market.
The supply management system in Canada is administered by the Canadian Dairy Commission (CDC). The CDC, a crown corporation, serves as a secretariat to the Canadian Milk Supply Management Committee (CMSMC), which measures consumer demand for milk and sets the national target for production (of butterfat) accordingly.
Each farm owns a number of shares in this market (quota) and is required to increase or decrease production according to consumer demand. Because production is in sync with demand, overproduction is avoided. Farmers can earn a predictable and stable revenue directly from the market, not from subsidies.