Canadian dairy marketing boards
Peeves @ Mon Nov 28, 2011 12:23 pm
Lemmy Lemmy:
Proculation Proculation:
Lemmy, are you serious ?
Yes, my request for an explanation from Peeves was a serious request.
Free trade & competition always brings fairer prices.
Farmers paying a million $ for the right to sell dairy isn't making our prices whatthey should be with fair competition.
Truncated:
http://fullcomment.nationalpost.com/2011/11/15/john-ivison-don%e2%80%99t-bet-the-farm-on-dairy-quotas/#more-57758
$1:
TPP participants such as New Zealand are determined Canada’s protected dairy industry is going to be opened up, by dropping tariff levels to zero over 10 to 15 years.
This should be welcomed by Canadian consumers. More imports mean cheaper prices and relief from rates that are more than double those paid in the U.S. for liquid milk, eggs, butter and cheese. It could even prove a boon for efficient dairy farmers, who would be free to export to expanding markets, rather than eking out a living in a shrinking Canadian market.
The time is right for liberalization in the dairy industry. The Conservatives have just fought — and apparently won — a battle with the monopoly Wheat Board to allow farmers to sell on the open market.
This should be welcomed by Canadian consumers. More imports mean cheaper prices and relief from rates that are more than double those paid in the U.S. for liquid milk, eggs, butter and cheese. It could even prove a boon for efficient dairy farmers, who would be free to export to expanding markets, rather than eking out a living in a shrinking Canadian market.
The time is right for liberalization in the dairy industry. The Conservatives have just fought — and apparently won — a battle with the monopoly Wheat Board to allow farmers to sell on the open market.
Lemmy @ Mon Nov 28, 2011 12:42 pm
Peeves Peeves:
Free trade & competition always brings fairer prices.
Farmers paying a million $ for the right to sell dairy isn't making our prices what they should be with fair competition.
Farmers paying a million $ for the right to sell dairy isn't making our prices what they should be with fair competition.
It's more complicated than that. What would change if we went to a free market? First, as Proculation already noted, you'd bankrupt every dairy farmer. So we'd have to deal with the stress on social services from that. Second, you remove the profitability in dairy farming then you lose the incentive to enter that business and to invest in it. So supply ends up falling and price, which was your initial concern, actually may go up. Then you have to consider what the production and distribution system would be. Without the marketing board (and the fees for that infrastructure paid by the farmers), what's going to happen to the processing and quality control end of things? That would now have to be regulated by government, which means transfering the process from private (well, co-opeted) control to government control. Marketing boards also stabilize prices. Sure, they're stabilized at a slightly higher price, but removing wild swings in pricing is a tremendous benefit to both producers and consumers, particularly industrial consumers. What about American and other foreign subsidization of dairy? Are we going to go down that road to compete? That means more tax dollars out of your pocket, or do we just let the domestic dairy industry die altogether and rely on piss-poor quality imports, including their transportation costs? It seems kind of ass-backwards to be promoting the idea of increasing our reliance on foreign markets for our food. Aren't food experts telling us to promote and think locally?
And what about savings to the consumer? How much do you expect this to save you? Milk's share of the CPI basket of goods is 0.0047. That means that, if you spend $75,000 per year, you're paying $350/year on milk. How much do you expect to save if the marketing boards were gone? $50? $100? Is that enough of a savings to justify more taxes, less quality and safety in the product, lower supply and a major disincentive to investment? Not to mention all the dead Dutchmen who jumped from the roofs of their barns.
Caelon @ Mon Nov 28, 2011 10:47 pm
Excellent post Lemmy. Many people do not realize their solution for short term gain yields long term pain.
Lemmy @ Tue Nov 29, 2011 10:07 am
Caelon Caelon:
Many people do not realize their solution for short term gain yields long term pain.
I just have to shake my head a little whenever I hear "free market good, everything else bad". If that were true we could teach all there is to know about economics in 10 minutes. There wouldn't be much point in spending 4 years to get an economics degree. But, some people prefer to live in Simpletown. I call those folks simpletons.
raydan @ Tue Nov 29, 2011 12:02 pm
How easy it is to forget... the dairy board and quotas was created in the early 70s to SAVE the Canadian dairy industry. If I remember correctly, there was a scuffle with the USA because of the dairy board and the free trade agreement, but they backed down because of how much their dairy industry is subsidized.
DrCaleb @ Tue Nov 29, 2011 12:08 pm
raydan raydan:
How easy it is to forget... the dairy board and quotas was created in the early 70s to SAVE the Canadian dairy industry. If I remember correctly, there was a scuffle with the USA because of the dairy board and the free trade agreement, but they backed down because of how much their dairy industry is subsidized.
Not mentioning quality either. If they remove the restrictions on growth hormones and antibiotics on milk in Canada, I'm going the direct organic farmer route too.
I miss whole milk straight from the cow. It sounds gross I know, but the taste can't be beat! Like the difference between 'frozen desert treat' and real cream ice cream.
raydan @ Tue Nov 29, 2011 12:18 pm
DrCaleb DrCaleb:
Not mentioning quality either. If they remove the restrictions on growth hormones and antibiotics on milk in Canada, I'm going the direct organic farmer route too.
I miss whole milk straight from the cow. It sounds gross I know, but the taste can't be beat! Like the difference between 'frozen desert treat' and real cream ice cream.
I miss whole milk straight from the cow. It sounds gross I know, but the taste can't be beat! Like the difference between 'frozen desert treat' and real cream ice cream.
I'm with you there... I love cheese made with unpasteurized milk.
A few years ago, a farmer client of mine would sell me milk and cream in those glass bottles we used to buy our milk in. The next morning, you couldn't even pour the cream out of the bottle, you had to scoop it out with a spoon to put it in your coffee.
![[drool]](./images/smilies/droolies.GIF "Drool")
Have you looked recently at the ingredients in what they call "cream" today?
Peeves @ Wed Nov 30, 2011 2:35 pm
raydan raydan:
How easy it is to forget... the dairy board and quotas was created in the early 70s to SAVE the Canadian dairy industry. If I remember correctly, there was a scuffle with the USA because of the dairy board and the free trade agreement, but they backed down because of how much their dairy industry is subsidized.
You can stand to defend marketing boards as good for farmers but I maintain they are bad for consumers.
Personally I don't give a curd, I buy all dairy in the USA at half the price.
Still, In my opinion what is possibly good for the farmers re dairy and chicken isn't good for the consumer.
http://www.montrealgazette.com/life/Marketing+boards+farmers+milking+consumers/5752694/story.html
Truncated, read more at link.
$1:
The prime minister and Trade Minister Ed Fast initially offered vague comments on whether such boards could be the subject of negotiation and possible abolition. Fast later clarified the government stance, saying the Harper government would continue to "defend Canada's system of supply management."
That's unfortunate, as in addition to being a significant irritant in international trade negotiations, these boards harm consumers.
Some context: Supply-management boards exist because of powers delegated to them by the federal and provincial governments.
In the interventionist spirit prevalent in 1970 when they were created, their three pillars are matching supply to demand ("production planning"), pricing mechanisms and "predictable" imports.
Consider dairy products as an example. The Canadian Dairy Commission, 10 provincial supply-management boards and provincial representatives, are all signatories to the National Milk Marketing Plan. Based on that plan, an associated committee determines a quota of how much milk each province can produce. That quota is then further apportioned among individual dairy producers. They in turn must sell all their milk to their respective provincial marketing boards.
In addition, high-import tariffs are imposed on imported products. The tariffs range from 202 per cent on skim milk to 298 per cent on butter, with cheese, yogurt, ice cream and regular milk falling within this range.
The net effect of the command-and-control approach to supply and the high tariff wall is that Canada's 12,965 dairy farmers prosper at the expense of most of the other 34,482,800 Canadians.
Problematically for those who defend such practices, supply-management boards fit the dictionary definition of a cartel: "A combination of independent commercial or industrial enterprises de-signed to limit competition or fix price." Most other cartels are outlawed on the grounds that such collusion is bad for consumers.
Read more: http://www.montrealgazette.com/life/Mar ... z1fE82a6kp
That's unfortunate, as in addition to being a significant irritant in international trade negotiations, these boards harm consumers.
Some context: Supply-management boards exist because of powers delegated to them by the federal and provincial governments.
In the interventionist spirit prevalent in 1970 when they were created, their three pillars are matching supply to demand ("production planning"), pricing mechanisms and "predictable" imports.
Consider dairy products as an example. The Canadian Dairy Commission, 10 provincial supply-management boards and provincial representatives, are all signatories to the National Milk Marketing Plan. Based on that plan, an associated committee determines a quota of how much milk each province can produce. That quota is then further apportioned among individual dairy producers. They in turn must sell all their milk to their respective provincial marketing boards.
In addition, high-import tariffs are imposed on imported products. The tariffs range from 202 per cent on skim milk to 298 per cent on butter, with cheese, yogurt, ice cream and regular milk falling within this range.
The net effect of the command-and-control approach to supply and the high tariff wall is that Canada's 12,965 dairy farmers prosper at the expense of most of the other 34,482,800 Canadians.
Problematically for those who defend such practices, supply-management boards fit the dictionary definition of a cartel: "A combination of independent commercial or industrial enterprises de-signed to limit competition or fix price." Most other cartels are outlawed on the grounds that such collusion is bad for consumers.
Read more: http://www.montrealgazette.com/life/Mar ... z1fE82a6kp
DrCaleb @ Wed Nov 30, 2011 2:53 pm
Nice FUD there Peeves. I'll take the higher prices and quality, in absence of what drives low prices and high profit in many other sectors of the US based supply chain. Take Wal-Mart for example. (no, really, take it!)
raydan @ Wed Nov 30, 2011 3:00 pm
Funny that you can go "buy American" and take money out of the American tax payer's pocket at the same time. 
peck420 @ Wed Nov 30, 2011 4:22 pm
Peeves,
I am confused, you are saying that you will buy milk that is subsidised at half price. Than pay extra taxes to cover the subsidy.
But, you won't buy milk at full price and just call it a day?
To me it would see that you pay the same price either way. One hidden and one not.
As for old school original milk...mmmm, we have Hutterite Colony that we sell product to and they bring in milk, cheese, butter, ice cream, etc. that is all organic and ....ah crap I creamed .
Lemmy @ Wed Nov 30, 2011 4:59 pm
So, Peeves, you just ignored everything I said, dodged and came back with "free market good, everything else bad" again. I see, I see.
DrCaleb @ Thu Dec 01, 2011 12:24 pm
Lemmy Lemmy:
So, Peeves, you just ignored everything I said, dodged and came back with "free market good, everything else bad" again. I see, I see.
You didn't give any heavily biased story links to support your position, so you must not know what you are talking about.
raydan @ Thu Dec 01, 2011 1:27 pm
Peeves Peeves:
The net effect of the command-and-control approach to supply and the high tariff wall is that Canada's 12,965 dairy farmers prosper at the expense of most of the other 34,482,800 Canadians.
This is another 99% vs 1% thread.
Another thing, maybe we have high-import tariffs on imported milk products because the countries we import from heavily subsidize the dairy industry.
I can make that bigger for you, if you like.
Peeves @ Sun Dec 04, 2011 7:57 am
raydan raydan:
Peeves Peeves:
The net effect of the command-and-control approach to supply and the high tariff wall is that Canada's 12,965 dairy farmers prosper at the expense of most of the other 34,482,800 Canadians.
This is another 99% vs 1% thread.
Another thing, maybe we have high-import tariffs on imported milk products because the countries we import from heavily subsidize the dairy industry.
I can make that bigger for you, if you like.
It's not just dairy. It's chicken too, and magazines, cars and..hardware and sports equipt., booze and shoes.................Canada's $ goes up, but do prices go down? Not likely.We get ripped off by merchants.
Why pay Canadian prices that run 25%-50% higher if I don't have to be gouged?