The 48 cent increase in the cost of a 2 Litre of milk has left a sour taste in the mouths
of many people in the province.
The DairyFarmers Association is blaming the grocery stores for the sharp increase. The increased cost of feed and gasoline is
the culprit, or is it?
For decades
Canadians have paid much more for milk, poultry and eggs than Americans and
Europeans. Newfoundlanders and Labradorians have paid even more.
The
Canadian Dairy market is not an open market. It is governed by a
supply-management system. The original intent of the system was to reduce
surplus and ensure farmers received a fair return on their investment.
For all
intensive purposes the producers have a monopoly within their provincial
jurisdictions. They control how much milk is produced, who produces it, How much it costs to buy new quotas, what the
milk is used for and they set the wholesale price.
Three key
sets of organizations are involved in formulating and implementing Canadian
dairy policy. These are the Canadian Dairy Commission (CDC), the Canadian Milk Supply
Management Committee (CMSMC), and the provincial milk marketing authorities.
The Dairy
Farmers Association manages the quota,
the prices and border controls. They have a captive market. Who sits on the
Dairy Association, mostly dairy farmers of course!
It is time
for a major reform of this broken supply-management system, which is not in the
best interest of consumers.
A Conference Board of Canada study showed that Canadians pay 60 cents more for a one litre
carton of whole milk than Americans and $1.50 more for a one-pound package of
butter than Australians, which has a deregulated dairy system
Reform of
the supply-management system in Australia and New Zealand created more
competition in those countries allowing farmers and producers to export where
they have captured over half of the world’s dairy markets.
The
Canadian Restaurant Association claims that dairy
products are being kept artificially high. Canadians, they say, are paying as much as double the international market price
for dairy products.
The current
system prevents innovation, stifles competition and stiffs consumers.
Check out these links:
- The Poor Still Pay More – Institute for Competitiveness and Prosperity
- Making Milk – Conference Board of Canada
- The Perfect Food in a Perfect Mess: The Cost of Milk in Canada – Fraser Institute (PDF)
- Dairy production: The cost of supply management in Canada – Montreal Economic Institute (PDF)
- The Milk Marketing Scheme
3 comments:
While I see how the price of milk - and meat, as you've also blogged about - affects families, especially lower-income ones, I can’t help but think how much healthier we and the planet would be would be if we all consumed less product from cows.
The livestock sector contributes to global warming, consumes large amounts of water resources, and is a key factor in deforestation, especially in developing nations.
Cow’s milk, especially in quantity, is not particularly healthy for humans; and most North Americans consume far too much meat for their cardiac health.
Beat rising prices…consume less meat and milk.
Interestingly enough, P&P has touched on the issue before. In fact a few weeks ago there was an article published that questioned the supposed benefits of milk. We are the only species that consumes anothers milk!
Re the milk I think we should be talking about what are the benefits. From what was published recently it leaves much to be desired. Could it be doing more damage than good?
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