Ian Petrie on Supply Management

As we were speeding along the highway from Düsseldorf to Enschede last night my friend Elmine asked me what the Canadian view of the situation in Europe is, and this led to a conversation about supply management and agriculture trade issues. There is no better observer of this topic in my network than Ian Petrie, both former-farmer and former-journalist and, and, now unshackled by the need to shape pieces around the demands of television, someone free to comment fully and intelligently about issues he knows very well:

It’s the import controls (high tariffs) that the business media and aggressive dairy exporters like the United States, New Zealand and Europe want rid of. What’s often forgotten is that Canada’s system begins with the producers’ real costs, then processors and retailers add their margins, and that’s what the consumer pays.  It’s farmers who get paid less in these dairy export countries that allow large processors to export so successfully, and they clearly want to add a wealthy country like Canada to the list of countries they sell too.  And recent data indicates that the consumers in these exporting countries  pay a price too to keep these countries competitive on the world stage.  Don’t forget that until UHT milk becomes more palatable/popular, it isn’t fluid table milk that’s on export markets, it’s dairy products like cheese, butter and yogurt.  While Canadians pay on average (varies in different provinces) $1.45 a litre for milk, consumers in New Zealand pay 20 cents more ($1.65) and Australians $1.55 per litre.


Alan's picture
Alan on July 9, 2012 - 14:46 Permalink

…Canada’s system begins with the producers’ real costs…” Without a market process this cannot be stated. When the pork prices dropped ten years ago one Hunter River neighbour was fine while the other suffered. The one that was fine was a third generation farmer who needed 40 cents a pound to break even. The other was new, over bought, heavily mortgaged and needed something like 1.15 a pound to break even. Every producer’s real costs will differ based on their actual decisions and resources. That should be reflected in the price I pay as it does for all my other food purchases.

Josh's picture
Josh on July 9, 2012 - 23:39 Permalink

I disagree that a farmer, whose frugality, wit and wisdom allow him to run an operation that is more fiscally viable, should pass along those savings to you.

Take, for example, the organic (note the little ‘o’) marketplace. It has flourished because early demand outstripped production and allowed prices to attract more ranchers and growers into the market. Prices are slowing drifting down and, as always, there are farmers who do charge significantly less than the market rate for top quality products. (We have enjoyed sides of beef and pork from David and Edith Ling a few times since moving to PEI)

What we need is not a declaration to control profit margins (and that blade cuts both ways, both for the fat and lean), but robust profits for farmers who choose to run frugal operations. Couple frugality with local and organic and you have the underpinnings of a sustainable market for all kinds of products.

Alan's picture
Alan on July 10, 2012 - 03:13 Permalink

If he does not pass it on to me, I buy from his neighbour. That is how farming and every other business works. You need only to be 1% more expensive for me or fail to give some other value that makes up for price. I hope they earn robust profits as I know the frugal pork farmer did. But I also did notice he did not line up with those profits to give them away but rather spent as wisely as he earned.