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Waterloomike
07-23-2017, 06:56 PM
https://fee.org/articles/quebecs-politicians-want-to-maintain-milk-poverty/?utm_source=FEE+Email+Subscriber+List&utm_campaign=5e821fd824-MC_FEE_DAILY_2017_07_23&utm_medium=email&utm_term=0_84cc8d089b-5e821fd824-107186733

https://ci5.googleusercontent.com/proxy/stDqnPj5jJR5PhtJoZstihjOrU8X9Edy2LjZTTufxCZmb4o0fi YdZc5xSiBguOGXeWEadNLSNAzYE7_JdbQ37OyxBV8CpG_42XY9 lM6DqWhwlqQars2-6VIzdJAcjUu4X4GUOTffdHzbS9wC3uO4Xvis3yW17lQZl3cgBQ I=s0-d-e1-ft#https://gallery.mailchimp.com/af44b8bfb54164e844a00a887/images/671bf3a2-0a96-4ce0-a907-0570da6f5dc5.gif


Spared by the North American Free Trade Agreement in 1994, the Canadian milk supply restrictions are “in danger” again. Because of trade negotiations with the US and Europe, foreign farmers want better access to the Canadian market.

However, hearing complaints from the US about unfree dairy markets comes as paradoxical. Indeed, since the Great Depression, the dairy industry has been anything but free. It profits from various subsidies programs including “the Dairy Price Support Program, which bought up surplus production at guaranteed prices; the Milk Income Loss Contracts (MILC), which subsidized farmers when prices fall below certain thresholds, and many others.” It even came close to supply management in 2014, according to the Wilson Center.

But nevertheless, should US farmers ever have greater access to Canadian markets, it won’t be without a tough fight from Canadian farmers, especially those from the province of Quebec. Per provincial Agriculture Ministry (MAPAQ) figures, the dairy industry is the most lucrative farm activity, accounting for 28% of all farm revenues in the province, but also 37% of national milk revenues in 2013. “La Belle Province” also has 41% of all milk transformation manufacturers in Canada.

Supply Management that Costs Dearly

Why is this such a lucrative industry? The answer is simple: it was developed under a highly protectionist system known as supply management. In addition to the prohibitive Canadian tariffs – over 240% once the quota is met – Quebec producers are protected by production quotas, which one must own in order to produce milk (article 3). Whoever dares to produce without this government blessing will be slapped with heavy fines.

Whoever dares to produce without this government blessing, or doesn’t sell milk through a centralized market, will be slapped with heavy fines (article 18). And the said quotas can only be transferred through a centralized board tightly defined by article 28.

As if it weren’t enough, minimum milk prices are also decided by an MAPAQ central board. The most recent update (June 1, 2017) states that the 2-percent milk fat, 4-liter (about a gallon) format must at least be sold for $6.33 in populous regions like Montreal and as much as $7.37 in further regions like the Magdalena Islands.

In comparison, neighboring Ontario sells its milk 33% (about $4.30), which can tempt neighboring cities like Gatineau to cross the Ottawa River to save money. Also, expensive US cities like San Francisco and New York City only pay $2.84 and $2.39 respectively for the same quantity of milk on average.

These high prices, of course, hurt families – especially low-income ones. For Canada as a whole, supply management costs on average $300 more per year. It also hurts the economy since the manufacturing industry cannot import cheaper products from abroad, increasing its production cost. Finally, insistence from Canada on keeping its expensive supply management system hinders its capacity to meaningfully reduce trade barriers with other markets – which would profit nearly 95% of agricultural producers who are not operating within the dairy industry.

Unanimous Political Support

But even though the near entirety of the population would profit from freer dairy markets, their liberalization will not happen anytime soon.

Basic Public Choice theory teaches that tiny organized minorities (here: milk producers) have so much to gain from making sure that the status quo remains. A region like Montérégie (Montreal’s South Shore) produced over 20% of all gross milk revenues in 2016. There are 23 out of 125 seats in that region, making it the most populous after Montreal (28 seats). So if a politician dares to question their way of living, milk producers will come together to make sure he or she doesn’t get elected. Libertarian-leaning Maxime Bernier learned it the hard way during the Canadian Conservative Party leadership race; producers banded together – some even joined the Conservative Party just for the race – and instead elected friendlier Andrew Scheer.

On the provincial level, all political parties in the National Assembly openly support milk quotas. From the Liberal Party to Coalition Avenir Québec and to Québec Solidaire, no one will openly talk against milk quotas. However, and maybe unwillingly, separatist leader Martine Ouellet gave the very reason why milk quotas are so important: they keep the dairy industry alive.

An Artificial Market

In fact, Ouellet simply confirmed what former Agriculture minister Pierre Paradis once said: agricultural production in Quebec is heavily aligned with protected markets. Before a parliamentary committee in 2015, he candidly said that 40% of all agriculture in Quebec is in the heavily protected dairy sector (inclusive of eggs and poultry). Agriculture only thrives through government incentives.

And while the remaining 60% don’t receive as much protection, they still profit from preferential loans and public support through intricate government programs.

In other words: agriculture only thrives through government incentives. Otherwise, it would be unlikely that Quebec, entirely north of the 45th parallel with agriculture downright impossible at least half the year, would have so much resource directed towards agriculture.

And there would be nothing wrong with that – are we expecting Alaska to grow its own pineapples? It should be up to markets (i.e. consumers) to decide whether they want to eat Quebec dairy products. If the products are as good as they are marketed, then they should instead welcome foreign competition as they would be able to conquer new markets, expand their production and become even richer.

But until Canadian and Québécois politicians make the bold step of at least increasing dairy quota imports, we might never know. Instead, Canadians will keep overpaying for a basic staple because a small, organized group ensures that their livelihood remains intact, even if, in the long run, it impoverishes them too.

Pierre-Guy Veer

https://fee.org/media/16654/3f505ae.jpg?center=0.36607142857142855,0.511904761 90476186&mode=crop&height=287&widthratio=1.3937282229965156794425087108&rnd=131317337730000000

Pierre-Guy Veer is a Canadian-born libertarian now living in the US.

tdod101
07-23-2017, 08:24 PM
These articles have been posted before and I'll say it again, I like Canadian milk...in a bag...(yay Ontario) and I wouldn't change it any way, one of the few things I'm unwilling to change about this country

Waterloomike
07-23-2017, 08:35 PM
Yeah, it makes a lot of sense to pour milk on the ground so we can keep it in a bag and keep the milk board favourites in a protected business. Hallmark of a free country for sure.

Dewey Cox
07-23-2017, 08:37 PM
These articles have been posted before and I'll say it again, I like Canadian milk...in a bag...(yay Ontario) and I wouldn't change it any way, one of the few things I'm unwilling to change about this country

And as a bagged milk enthusiast, wouldn't you like to be able to milk your own cows, and sell your own bagged milk if you wanted to?

tdod101
07-23-2017, 08:53 PM
Woah woah woah, I just like the way it tastes. I've had milk from the states and Europe thanks, tastes like garbage.

Let me guess, you want to pay a $1 for 4L
of milk right? Sometimes boys you get what you pay for.

Waterloomike
07-23-2017, 09:14 PM
Do you think Canadian milk might cost more because they pour a lot on the ground? And they won't allow competition?

You're paying for a lot government bullshit authoritarinism and playing favorites.

M1917 Enfield
07-23-2017, 09:38 PM
These articles have been posted before and I'll say it again, I like Canadian milk...in a bag...(yay Ontario) and I wouldn't change it any way, one of the few things I'm unwilling to change about this country


https://www.youtube.com/watch?v=1TeRDhf41Mk

Swampdonkey
07-23-2017, 10:16 PM
Woah woah woah, I just like the way it tastes. I've had milk from the states and Europe thanks, tastes like garbage.

Let me guess, you want to pay a $1 for 4L
of milk right? Sometimes boys you get what you pay for.

You can buy the fanciest milk out there, and I'll be happy for you.

Forcing me to buy that same milk because it's the kind you think is best is unreasonable.

I'm not saying we should allow Chinese milk with melamine and warfarin to be sold by any means.

There are all kinds of dairies in the USA. Tillamook and Edaleen are two of my favourites. Kirkland blue cheese is great too.

Grizz Axxemann
07-23-2017, 10:57 PM
Woah woah woah, I just like the way it tastes. I've had milk from the states and Europe thanks, tastes like garbage.

Let me guess, you want to pay a $1 for 4L
of milk right? Sometimes boys you get what you pay for.

I find that French milk actually tastes better.

Yes.

I'd rather make the decision myself as to how much I spend on a gallon of milk instead of deciding that I can't afford a gallon of milk this month because I need to buy this other $5 item this month on the $100 I have left after the bills are paid.

Social assistance is a joke, but it's all I got until I find a job.

awndray
07-24-2017, 06:44 AM
I love cheese and other dairy products, but cripes am I ever tired of the dairy cartels and governments pushing their product as if it's the answer to a health.