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Originally Posted by peter12

How much did you get paid for this blatantly ridiculous and false post?

Originally Posted by peter12

No, Canadian supply management is a joke. I am not saying he is right, but we could make moves in the general direction of opening up dairy markets to global competition, and guess what, you and I would be far better off.

I would not say that is false or ridiculous and maybe you should take a look at the facts first. It doesn't look like we would be far better off at all. Take a look at this case study from dairy deregulation across the world in the EU, Australia, UK, etc. Studies support his claim.

In the UK case, deregulation led to a sharp decrease in the number of farms that consolidated into huge numbers cows per farm. Drinking milk prices remained flat for the consumer while producer prices decreased. Deregulation hurt farmers in the UK overall until subsidies were put back into place afterwards while giving a huge foothold to foreign producers.

The deregulation era in the United Kingdom had significant impacts on the dairy
industry, which did not succeed in its attempt to continue growing over the last
20 years.

However, the impact on producers has been mitigated due to subsidies
and due to the emergence of direct contracts with retailers. The farms still operating
today are larger and more productive. They still benefit from the government
support through Common Agricultural Policy budgets. Cheese imports, in particular,
have strongly increased and foreign processors leveraged the weakness of the local
industry to gain solid establishments.

As for local processors, they particularly
suffered through these changes. We will now have to wait to assess the impact of
the quotas abolition in Europe, which also applies to the United Kingdom.

Producers:

• Strong decrease in the number of farms after deregulation
• Decreased total milk production despite the allocation of
  additional quotas
• Remaining producers are more profitable, partly due to CAP
  subsidies on which they are more dependent

Retailers:

• Gain of negotiating power through direct supply from
  producers

Consumers:

• Drinking milk price relatively stable, even when producer prices
  were decreasing

Findings from the Boston Consulting Group Study on dairy deregulation:

• Producers Consolidation and shift toward low-cost regions
• Increased pressure on small and local processors, consolidation
  and arrival of new entrants
• Benefit the most from the opening, due to an access to several
  supply sources, part of the gains are protected
• Limited impact except through some decrease of retail prices
• Depending on the desire to keep a dairy industry, intervention
  is materialized through substantial measures to support the
  sector

Results for the Canadian Dairy Industry as a whole:

The situation in Canada differs from the situation in the majority of benchmarked
countries, mainly due to the proximity of the United States, given that it has a dairy
industry about 11 times larger than Canada, operates at more competitive costs and
could represent a real alternative to supply Canada.

• The equivalent of the whole Canadian dairy livestock exists within 250km of Canadian
  plants at a lesser cost;
• US plants also have lower costs and can competitively supply the Canadian market;
• 10 billion litres of exported products could be redirected toward Canada;
• Canadian consumers are already used to buying US branded products and could do
  the same for dairy products;
• 24% of food products consumed in Canada already come from the United States.
  An immediate opening would put 40% of the Canadian dairy industry at risk
• In the case of raw milk price convergence, 37% to 50% of farms would be at risk
  (between 4,500 and 5,000 farms). This amounts to 40 % of production;
• Drinking milk volumes are more protected because raw milk prices are higher, and
  transportation costs offset the low processing cost advantage of US plants;
• The processing of industrial consumer goods would be more likely to shift toward
  the United States (cheese, butter, yogurt);
• Part of the value at risk would be transferred downstream from processing and
  production;
• The benchmark does not enable us to determine which part of that value, if any,
  would be passed on to the consumers through a price decrease.
  Finally, an opening of the system would represent a risk of net loss of $2.1 to 3.5 B for
  the Canadian GDP and would threaten 24,000 direct jobs
• $1 to 2.4 B of value is at risk of being transferred downstream from processing and
  production: the benchmark does not enable us to determine whether the profit
  would be passed on to the consumers through a retail price decrease;
• Other possible impacts: $6 to 7 B at risk (potential loss) for the banking sector due to
  loans to insolvent producers, economic and social impacts on municipalities, political
  risk, etc.

To me that reads deregulation of the industry will lead to minimal changes in pricing for the consumer and will squeeze out local producers and competition in favor of higher yield industrial farms with higher profit going to retailers. Regulations help keep local industries alive based on political will to support those measures at a national level.
http://www.agropur.com/pdf/Analysis_...nudstry-EN.pdf

I am not saying that there the supply management system we have in place is right, but deregulation of the industry worldwide has clearly brought about changes that would be detrimental for local producers. Except in New Zealand which benefits from near perfect year round grazing conditions. We would end up with worse quality milk with significantly more hormone content (less regulations around that in the States), at the similar costs, while driving local producers into the ground for American profits. Remind me why Canadians would want that?

EDIT: I did not expect to ever spend two hours of my life reading about cows and milk. Ever.