Dairy supply management report is about attracting processors, says author

Fifty years ago, supply management was formed to “save the family farm” and today, the reason for such a system to exist is becoming less clear to some researchers and analysts.

A report was recently released on the future of supply management, titled Supply Management 2.0, A Possible Roadmap for the Canadian Dairy Industry. Dr. Sylvain Charlebois, senior director of the agri-food analytics lab at Dalhousie University, and co-author of the report, recently joined Shaun Haney to discuss the report’s premise, and what the main findings might mean for dairy supply management going forward.

The report outlines four steps for Canadian farmers to adapt to a more liberalized market, and to become competitive in more niche and premium export markets. Most notable are the proposed steps for dairy farmers to exit the industry voluntarily, and to make significant changes to the Canadian Dairy Commission (CDC).

Interprovincial trade barriers on dairy products are also a topic of concern in the report. Finally, the report includes a proposal to initiate a 20-year plan to reduce general tariffs, develop an export strategy, and create a Canadian brand and provide incentive for innovation.

The centrepiece of the report is not about production, it’s about processing, says Charlebois. “Without a strong processing sector, it’s very difficult to support farmers,” he says. “If you make sure that processing is addressed, you build a much stronger dairy sector, and farmers benefit from that eventually.”

Committing to competitiveness will also further advance the dairy industry in Canada, he says. In Charlebois’ opinion, there are a few things that the dairy industry is doing too much of: farmers are getting $1.8 billion over eight years in subsidies, maintaining the quota system, and not doing enough for our processing and restaurant sectors.

“The sector needs a strategy — producers can’t do it alone, it needs to partner with processors and more vertical coordination needs to occur, and that can’t be done without the CDC,” says Charlebois.

Perhaps, it comes down to how the government wants to support the sector, clearly and transparently subsidizing at the front end, clearly, compared to the U.S., where the subsidies occur on the back end in terms of support payments.

Hear the full interview for Charlebois’ opinion on exports, creating the Canadian brand, and what it will take for the dairy industry to innovate: 

Related: Too far or not far enough? Report on dairy modernization stops well short of abolishing supply management

 

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