Myths & Realities
Retail prices for Canadian dairy products are comparable to prices in other countries. Canadians are also spending less on dairy products — the percentage of their income spent on dairy has fallen from 1.2 % in 1990 to 1.03% in 2013.
In fact, Canadian consumers have a good deal on food. On average, households spend about 10 per cent of their income on food and alcohol, one of the lowest in the world. By February 6, 2015, Canadians had earned enough money to pay for food for the year, making Canada and the UK and the U.S. the top three countries where food is most affordable.
The latest global price comparison (52 weeks ending December 2014) shows our consumers get a good deal in Canadian stores as they pay about $1.30 a litre of fresh milk, which compares well with the 1.83 in New Zealand, and 1.81 in France, 1.15 in the United States, 1.19 in Germany, while China’s prices are more expensive at $2.35 a litre.
Compared to other beverages, milk is the most cost-effective product with any nutritional value offered to consumers. (AC Nielsen 2013 data).
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.
Moreover, in New Zealand, the most competitive milk-producing country in the world, retail prices for milk are comparable to ours.
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 58% 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.
The EU has asked and received additional access to the Canadian market under the CETA deal. Another 18,500 tonnes of cheese will come in from Europe when the deal is endorsed. This means that 9% of the cheese consumed in Canada will come from EU, up from the current generous access of 5%. The European Union (EU) currently imports only a modest number of Canadian dairy products, despite the fact that the EU is a market about 15 times the size of Canada
Canada has concluded NAFTA and bilateral agreements with 43 countries: Jordan, Colombia, Peru, Costa Rica, Chile, Israel, EFTA (Switzerland, Norway, Iceland and Liechtenstein), Panama, Honduras and South Korea, as well as a comprehensive trade deal with the European Union (CETA). Supply management has been one of many issues on the negotiating table, but it has not stopped any of these agreements from being successfully completed. Canada is currently active in the Trans-Pacific Partnership (TPP) negotiations.
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.
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The voice of Canadian Dairy Farmers
We support supply management because it works!