Martha Hall-Findlay claims supply management raises
prices to consumers.
She backs this up with a table showing national
average milk prices in Canada and the US during March 2010-12. In March
2012, Hall-Findlay says, 4 litres of homogenized milk cost Canadians $9.60 and
"Canadians are forced to pay almost three
times as much for four litres of whole milk as Americans" she trumpets.
Sorry Martha, you are dead wrong. Happy to
To get the Canadian price, Hall-Findlay uses
Statistics Canada's CANSIM Table 326-0012 that reports monthly average Canadian
prices for two fluid milk products, partly skimmed and homogenized; both in one
litre containers. For March 2012, one litre of partly skimmed was $2.30,
$2.40 for homogenized.
How did Martha get her price of $9.60 for 4
litres? Why, she took Cansim's one litre price and simply multiplied by
Sorry Martha. As any retailer or consumer will tell
you, that's a big, big error. Eighty percent of Canadians buy milk in 4
litre bags ($4-5 each); SUBSTANTIVELY below their 1 litre cousins ($1-2 each).
In his 2009 report, George Brinkman,
Professor Emeritus, University of Guelph notes prices for 4 litres of partly skimmed milk were $3.97 in Toronto
versus $3.40 in Boston, a 57¢ spread for 4 litres. Hall Findlay's analysis pegs this 4 litre price gap at a whopping $5.56.
The magnitude of Hall-Findlay's error invalidates her entire case.
Correctly analyzed, prices for 4 litres of 1 or 2% milk in Canada and the US will show differentials in the neighbourhood
of 60 to 80 cents per 4 litre bag, or 15 to 20 cents per litre, not the $1.42 per
litre Hall-Findlay reports.
Hall-Findlay's attack on supply
is based on false allegations and spun for political gain. Hall-Findlay
is considering a run for the Liberal leadership. Perhaps she feels
playing to the neo-classical right (attacking supply management) is a
way to gain supporters and profile. It's telling that half her report
is devoted to how "politically safe" her
position is: "The threats to risk-averse politicians from the
dairy lobby are, contrary to widely held assumptions, negligible...There are
now few, if any, ridings where dairy votes could plausibly swing
Attacking supply management is BAD PUBLIC POLICY.
I know. As a policy Agrologist with over 30 years standing in my
profession, I am more than prepared to stand up and defend the public interest in this one...
After last night's Lang and O'Leary segment, Martha
Hall Findlay owes us all a retraction... Or a proper debate.
I'm up for it Martha... Are you?
That was a pretty whirlwind 7 minutes -
below are some of the points I DIDN'T have the time to make. In the
interest of good public policy, I challenge you to a debate on this
issue. Anytime. Anywhere. Its too important to leave to empty rhetoric
and political posturing.
(As noted on-air this afternoon, these
are not criticisms per se - i know you are coming from a neoclassical
paradigm that I myself - fresh out of my Masters in Ag Economics at UBC
in 1974 - also believed to be true. It took 6 years to understand what
was REALLY going on in the sector (see my column "confessions of an
Economist" written after the great Beryl Plumptre passed:
Farmers today face a far from
competitive market, Large multinationals exert undue market power -
without supply management our farmers would be toast. Canada farm
policies in dairy, poultry and eggs are the envy of the world - we
should be exporting policy not importing eggs.
1. When proper analysis is undertaken,
there is a very small price differential for fluid milk beteeen Canada
and US. In NZ, retail prices are actually higher. In both cases,
farmers receive less. (In your report, you quote a 4 L price based on 4
times the 1 L price, hopelessly prejudicing your conclusions. Eighty
percent of Canadians buy in 4L sizes and the price is CONSIDERABLY
lower. And for the past dozen years or so, Canada retail milk prices
have been actually been LOWER than in the US for roughly half the time.)
2. While world prices to farmers have
swung widely (in 2006-08, an estimated 95% of farmers received less than
production costs), Canadian prices have remained stable. This has
benefited the sector and the consumer. Our farmers are amongst the most
efficient in the world. We have third generation farms. This is a
3. Cows are not widgets. If by
destroying supply management you drive our farmers to their knees, they
will not be "recreated" out of dust if prices improve... Once they are
gone, they are gone. And there are 120 international mutual funds
ready to scoop up their land in the breech.
4. Not one dollar of subsidy goes to
Canada's supply managed farmers. This compared with subsidy
millionaires in Europe. And 31¢ per L taxpayer subsidies in the US.
5. Political Opportunism: Half of
your report analyzes why politicians can support your position without
worrying about being re-elected based on number of supply mnnaged
farmers per riding. How crass. Actually, what you need to look at is
number of consumers per riding. Do you not know consumers care about
good food policy?
Trashing supply management is bad public
policy. This is why I have engaged. I have no interest here but the
truth. Oh, and a sustainable future...
You've hung your political hat on this
issue. Let's debate it. in a time slot that allows for cogent
discussion. In a venue that allows for public witness.