Supply management (Canada)

Supply management (French: Gestion de l'offre) is a catch-all term for policies that control the price of milk, cheese, eggs, chicken, and turkey in Canada. This system was previously used in other countries, for example New Zealand and Australia but has since been deregulated and trade liberalized. It restricts the supply of these products by controlling the amount produced domestically and limiting imports with high tariffs. The regulated and restricted domestic supply and lack of foreign product increases prices for the end consumer, estimated to be 38% to 300% higher retail prices than what is paid in most other countries for the same commodities.

The controls provided by supply management have allowed the federal and provincial governments to avoid subsidizing the sectors directly, in contrast to general practice in the European Union and the United States. Instead, consumers subsidize farmers in these sectors through the significantly higher supply managed prices paid for the end products. Other agricultural sectors in Canada (grain, beef, pork, etc.) do not have similar controls or subsidies, and for the most part compete as a normal product on the international market.

Supply management, though supported by all three major political parties, is the subject of much debate in the farm communities, academia and think tanks. Critics argue that supply management is an unduly protectionist policy that creates corruption, lack of consumer choice, poorer quality products, and inefficiencies in the market to the detriment of the consumer. The system's controls on imports from other countries (e.g. 285% import tariff on some SM commodities) was a major stumbling block in international trade negotiations, such as the free trade with the European Union and the Trans-Pacific Partnership.

In total, there are about 17,000 Canadian farms that operate under Supply Management; this is about 8% of all farms in Canada. The dairy industry is the largest of the three supply-managed industries in Canada, with about 13,000 farmers. There are about 2,700 poultry farmers, and fewer than 1,000 egg farmers. For simplicity, parts of this article will focus on the dairy industry, though the general principles apply to the other two industries as well.

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