B.C.鈥檚 1,100 dairy, poultry and egg producers account for nearly half of all agriculture jobs in the province, up from 25 per cent in 2007, according to a recent study from PricewaterhouseCoopers. Most of these producers are family-run farms.
The key to this growth is supply management, the system that has provided more than 40 years of stable growth in Canada鈥檚 dairy, poultry and egg sectors by setting optimal production levels and preventing the boom-bust price cycles that inherently plague farmers.
The report found these B.C. producers added 3,350聽new jobs between 2007 and 2011, for an industry total of 31,726, almost more than the forestry, mining, and oil and gas sectors combined during the same period, while total employment in the B.C. agriculture sector fell by 9,400.
The lesson is clear. Supply management is providing much-needed stability for the province鈥檚 turbulent agriculture industry by underpinning $5.6 billion in overall economic activity. And it doesn鈥檛 cost taxpayers a nickel in subsidies or bailouts.
Yet, over the past year, so-called economic think- tanks have unleashed a barrage of reports calling for the dismantling of supply management, arguing it shields farmers from free-market forces, specifically foreign imports. They allege supply management is preventing Canada from signing trade deals 鈥� a claim that ignores nearly a dozen deals already in place, including a free-trade agreement with the U.S. that is the envy of the world.
Their favourite accusation is that supply management causes retail prices to be higher than they would be otherwise. Critics somehow fail to grasp the reality that retailers set retail prices based on what the market will bear.
Yes, farmers get higher producer prices under supply management since it prevents farmers from being subjected to the massive buying power of retail and food-processing conglomerates. But grocery stores and processors typically spend more on packaging than the farmers get for producing the food.
If wholesale prices indeed drive retail prices, we would like someone to explain to us why a dozen fresh eggs cost consumers about $3 while a dozen cans of soda pop 鈥� fizzy sugar water that costs pennies to make 鈥� typically sell for more than $6.
If anyone is na茂ve enough to believe retailers will pass along any savings to consumers, they just need to look at New Zealand, which dismantled its supply-management systems a decade ago. Consumer prices for milk are now so high that the New Zealand government has launched a special investigation into why their doctrinaire gamble on an unregulated market didn鈥檛 work.
In Canada, in addition to overseeing production levels, supply-management boards across all the provinces have created and enforce unrivalled food safety standards.
If critics had their way, dairy, poultry and egg farmers would be competing with foreign suppliers. Let鈥檚 again look at eggs to see how this could play out.
The average flock size of a B.C. egg producer is 19,000 hens. Farms are spread across the province, guaranteeing everyone has access to fresh, locally produced eggs.
In the United States, 87聽per cent of total egg production comes from factory farms with more than one million laying hens. Indeed, 16 U.S. farms have more than five million birds apiece. Just one of these massive factory farms, located as far away as Ohio or Pennsylvania and partly funded by subsidies from the U.S. Treasury Department, produces enough eggs to meet the entire demand of B.C., Alberta and Saskatchewan combined.
U.S. dairy farmers receive even more subsidies 鈥� government payments account for about 40聽per cent of dairy-farm incomes.
Free market enthusiasts may argue that B.C. consumers will then enjoy cheaper food, thanks to enormous U.S. government subsidies. This ignores two truths.
First, we have no guarantee retailers and food processors will pass along a single cent of savings to consumers.
Second, vast amounts of consumer research shows 91原创s demand governments ensure family farms remain healthy in order to provide families with locally produced, high-quality food.
A recent poll by Forum Research done for 91原创 Business magazine suggested that 81 per cent of 91原创s say we need to protect dairy and poultry farmers.
Next time you read another rant from a pundit calling for the end of supply management, ask yourself what is more important: higher profit margins for retailers and food processors or a strong and vibrant B.C. agriculture sector?
Dave Eto is executive director of the B.C. Dairy Association. Al Sakalauskas is executive director of the B.C. Egg Marketing Board.
