Europeans seem more interested in supply management than we think

A recent meeting of the Dairy Farmers of Canada saw an interesting observer in attendance, namely a visitor from the Netherlands dairy industry. The visitor was on an information gathering endeavour to learn more about the Canadian dairy supply management system. This may come as a bit of surprise to many, as it is much assumed that the European dairy industry is highly controlled and regulated from top to bottom by the notoriously bureaucratic and machiavellian European Union (EU) organization. One expects the EU to require a permit to even posses a cow for milking purposes. One assumes that the production and sale of milk is also highly controlled. But it appears that is not entirely the case.

The EU and its member nations are infamous for trying to manage agriculture and keep out food exports that might even remotely compete with local products. On the other hand, the EU also makes local production difficult with stifling regulations that cover everything from no GM products to overbearing environmental and animal welfare rules. Their own regulations have a depressing effect on commercial agriculture. Those same regulations as interpreted by France for instance protect a large number of voters who are primarily small land owners with small operations. In fact most of the EU budget still goes to supporting agriculture.

The past EU history has been to guarantee a price for commodities with surpluses bought up by the EU and stored in warehouses. This has proven to be disastrous with butter mountains and wine lakes in storage. To reduce that practice the EU has resorted to paying farmers to watch grass grow and maintain the rural culture. But as it turns out, ever efficient farmers are continuing to produce more commodities on less land.

The Dutch and Danish, who invented intensive agriculture, seem to be the most efficient at increasing milk production. Dairy production has been difficult to restrict being genetics and management efficiencies continue to increase milk output with the same number of cows. They may have to resort to the approach taken towards their hog industries, that being simply buy them out and not allow any new operations to start up.

That may well be what the Dutch dairy industry is looking at and the best example of that is Canadian supply management. Its a system that has been fine tuned over the years to match demand with supply and assure the primary producer a fair and constant return for her/his labour and investment. The system is much maligned by right wing economists who want the free market to rule. Yeah that would be the same system that has off and on impoverished farmers and ranchers of other commodities on a roller coast ride of prices. It has also hatched a never ending litany of government support programs designed to bail out producers with tax payers money from the tyranny of the free market.

The point is that if foreign observers are coming to Canada to check out our supply management system. then just maybe we should take another look at this success story of Canadian agriculture and see how it can be applied to other commodities.

Horticulture and hogs would seem logical candidates for some sort of supply management. Sure they are different from poultry and dairy but surely a hybrid system can be developed for domestic demand and exempting export sales. The later is an important point, because sooner or later taxpayers are going to question programs that see their dollars being used to subsidize export food sales to relatively wealthy countries like the USA, Japan, China and the EU.

I do believe governments are also changing their views on supply management agriculture. Even in free enterprise Alberta our own Minister of Agriculture Jack Hayden has mused that perhaps supply management is a pretty good time-tested approach. If the never-ending parade of support programs are any indication maybe a back to the future approach is in order. Learning from past successes is generally better than learning from future failures.