One point against the Conservative Government

In June 2006, the Minister of Agriculture, Chuck Strahl, indicated that the government supported the marketing boards, stating:

"We think the system has worked well for Canada. It's a system other countries should consider as part of their agricultural policy," Strahl said.

I wrote to the minister pointing out that supply management for the purposes of increasing the economic security of the producers reduces the economic security of everyone else in the economy (F.A. Hayek, The Road to Serfdom, 1944). Supply management does nothing but protect consumers from low prices.

I received a response from Chris Patterson (Senior Policy Advisor) and Marilyn McEwan (Agriculture Canada) indicating the following:

"have long supported the concept that producers are the most appropriate judges of the type of marketing systems that best serve their needs. In the case of supply management, it is a shared federal-provincial jurisdiction. Many producers who currently operate under the supply management system have not requested either the federal or provincial governments to remove the system."

Well of course the producers aren't going to ask to reduce their economic security. I replied:

The fundamental problem is that the producers will select a system that benefits them the most, even at the expense of others. In this case, the governments' support and legislation regarding supply management improves the economic security of the producers at the expense of the consumers who buy their products. Since there are more consumers than producers, this policy reduces the economic security of more people than it helps.

Therefore, the concept that the government supports is damaging to Canadians and to our economic health.

I received this response this week:

The purpose of the dairy supply management system is to provide producers of milk with the opportunity to obtain fair returns for their labour and investments, and to provide consumers of dairy products with a continuous and adequate supply of dairy products. This is not to say that our supply management system is perfect; indeed, there are some important disadvantages to the system such as the difficulty new producers have in entering the system and the displacement of the use of dairy products by the processing industry with products like milk protein concentrates. Nonetheless, the Government supports those industries and producers who have chosen to market their products in this way.

In order to address the issues that are creating problems within the industry, the Minister has tasked both dairy producers and processors to work on developing solutions, which will benefit all, including the consumer.

OK, so they've admitted that the existing system protects existing producers while making it nigh impossible for new competitors to enter the market. Good first step. The bigger mistake is that the government (and their policy advisors) are not leading the country. They are letting the minority (the existing producers) do what is best for them, at the expense of everyone else.

I call on the Minister to reverse position and dissolve all the marketing boards. Because marketing boards don't help Canada. They hurt it.