Quote:
Originally Posted by bizaro86
No. Tarrifs keeping foreign goods out ensure local production.
Quotas just specify who can produce and keep prices higher than they otherwise would be (because consumers pay for the cost/value of the quota)
|
Why no? Tarrifs are a part of the supply management system. See the italicized below. I get your issue with quota, but that's not the only part of managing a supply.
Supply management was brought in because at times we had a number of producers that over-produced, and we would up dumping a lot of eggs and milk. Because so many farmers went broke because they made no money, then we had the opposite problem where there was a shortage of milk, butter, eggs, and you could not get it at the grocey store. We needed something to balance the supply. Is it marginally more expensive in Canada to buy milk, chicken, and eggs? Perhaps marginally, but it is the retailers that set their prices in the store.
There are other issues that lie deeper. Yes, I understand your issue with the quota system (which is a part of supply management, but it is not the definition of supply management), but by all means the quota cost is
not being reflected in your prices (see link below). The problem is that in order to have fair prices for farmers as well as for consumers, there has to be a gauranteed profit associated for both. It's not much per quota unit, but the more units you have, the more gauranteed profit you make. When you have a gauranteed profit, you have a bunch of people thinking "oh, well if i'm gauranteed to make money, let me jump on the bandwagon". Naturally, the rich (and the hutterites) are the ones who have been able to invest the most into quota, and therefore have been the ones gaining most of the production rights. However, you have to restrict production because it is a guaranteed return, so how would you propose to do that otherwise without quota? Would you rather big corporations set up contracts with growers like they do in the states? Are you aware that there are huge problems with that too? The farms in the states are on at least on average 10x larger than the ones in Canada, and in most cases, the chickens are never owned by the farmer and I'm betting most farms are corporate owned farms.
In a lot of industries and as an entrepreneur but mostly in agriculture, if you want to make money, you need money. Supply Management farmers are producing low value goods, and they need to be big to actually make money. How would you propose getting into grain farming?
Here is how producer margin is set by chicken farmers of Ontario. Note that there is no "quota" cost, the only extra fees from supply management would be the 2 cents per kilogram of chicken that go to maintaining their Provincial and National boards. I don't mind paying 2 cents per kilogram of chicken so that we can have a domestic production of it, not to mention the industries that rely on it:
https://www.ontariochicken.ca/Farmer...roducer-Margin
Here are the 3 pillars of supply management:
"Three Pillars of Supply Management
There are three pillars of supply management that ensure that our system works effectively.
1. PRODUCTION MANAGEMENT
Using a quota system, producers can ensure that a steady supply of quality products are available to meet consumer demand.
2. PREDICTABLE IMPORTS
Canada’s federal government has committed to limit imports to ensure Canadian dairy market requirements are primarily met by Canadian milk production.
3. PRICING MECHANISM
Dairy producers receive prices that provide a reasonable return, which enable producers to cover production costs. Our producers do not rely on taxpayer subsidies."
https://albertamilk.com/for-industry/supply-management/