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If The CWB Goes, Is Supply Management Next?

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The Conservative government s decision to end the Canadian Wheat Board s monopoly has supply management s critics in the media, business and academia sharpening their knives.

Not surprisingly, the detractors are saying it s also time for an open market in milk, eggs, chicken and turkey. If marketing freedom and open markets are good for the CWB goose, they re good for the supply-managed gander.

According to the critics, Canadian consumers pay more for dairy and poultry products than in the United States, though they usually ignore the effect of U.S. dairy and feed grain subsidy programs.

But managing supply restricts who can produce, how much they produce and how much can be imported. The CWB restricts none of those, and it competes without subsidy in the world market.

The same government that boasts of its commitment to dismantling the wheat board s monopoly, in the name of allowing farmers to sell on the open market, takes enthusiastic part in preventing other farmers from doing the same. It s a profoundly hypocritical position, Maclean scolumnist Andrew Coyne wrote in a recent piece.

AGlobe and Maileditorial stated the government should kill supply management before the CWB, saying the CWB does less harm.

Also writing in theGlobe,trade lawyer Lawrence Herman advised Trade Minister Ed Fast to push his cabinet colleagues to end supply management by providing them with reports from the C.D. Howe Institute and the Conference Board, both of whom have said the present system distorts markets, harms consumers, inhibits innovation and reduces producer efficiency.

John Manley, a former Liberal Industry and current chief executive of the Canadian Council of Chief Executives, told an Ottawa meeting it was time to end supply management.

To be sure, John Manley doesn t speak any longer with the authority of a senior cabinet minister in a majority government, Financial Postcolumnist William Watson wrote. But if the spokesman for 150 of the country s biggest companies, representing half its GDP in sales, says it s time to do something about marketing boards, that s encouraging news.

Entirely different

When asked about Ottawa s alleged hypocrisy Minister Ritz replied in an email that supply management and the CWB are entirely different things. Supply management sets its own prices; the CWB is a price-taker. Dairy processing is quite advanced, he wrote; in the grain sector innovation and investment have stagnated. Supply management was created in response to farmers demands for stability and profitability; the CWB was imposed only on western grain farmers by government during wartime to ensure cheap wheat to Europe.

Though they earn about a quarter of Canada s net farm income, supply management farmers represent just 10 per cent of Canada s total. The rest depend heavily on exports. The same farm groups dedicated to killing the CWB, and which have the government s ear, are just as opposed to supply management. They argue that it undermines Canada s international trade position, which calls for more market access.

The politics so far have been that supply management is untouchable because it s sacrosanct in Quebec. But with a majority government and only five Conservative seats in Quebec, is supply management Ottawa s next target?

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