Supply management is among Canada’s most contentious public policies. The policy is designed to manage the market risk faced by farmers of supply-managed commodities. But it does so by generating higher prices for consumers and closing off growth opportunities in domestic and international markets.
This report highlights the case of dairy supply management. We review the reform literature and offer some ideas for reform paths that create a win-win solution for dairy farmers, consumers, and Canada.
The report’s unique contribution is that it links farm-level financial analysis—micro analysis—to macro policy. This allows us to show how different policy actions play out in terms of farm viability and transition paths for the industry. We clearly demonstrate that it is possible to grow Canada’s dairy sector by reorganizing assets under the most efficient producers. And Canada’s most efficient producers will provide Canadians and the world with low prices and high-quality dairy products.
The report was prepared for The Conference Board of Canada’s Centre for Food in Canada (CFIC).