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The CFFO Commentary: The $25,000 Cow - The Rest of the Story (part 1)
By Nathan Stevens
September 2, 2011
Andrew Coyne, one of Canada’s most respected journalists, has garnered a lot of attention in his recent article in Maclean’s that turned a harsh eye towards supply management. He makes a number of strong assertions in his article that are worthy of further discussion. This is the first in a series of commentaries that will provide counter-points to those assertions, this time focusing on why there are different rules for different farms.
Coyne questions why we should have one set of rules for some farms, and another for the rest? I would ask if having different sets of rules for different situations is really so strange? He seems to think that agriculture is monolithic in approach, which couldn’t be further from the truth. Furthermore, in all areas of employment and business there are different sets of rules with advantages and disadvantages. As an example, there are unionized electricians and independent operators. The key feature of unionized workers is that they have bargaining power at the cost of having to adhere to a set of rules that work for the group as a whole, even if some individuals could or might want to do more. Independent workers have a different set of vulnerabilities and opportunities. It is similar in agriculture.
Supply-managed farmers have accepted limitations on their opportunities by choosing to only produce for the domestic market. If milk and milk product consumption in Canada goes up, new quota is made available. If demand goes down, which it has, production goes down to match it. In return for accepting this limitation, farmers are granted protection from foreign dumping and receive bargaining power when determining price. This is extremely important when dealing with a product that has a limited shelf life and sees new supply produced daily.
Non-supply managed farmers deal with the boom and bust of commodity price cycles. There are good years and bad years, and in the bad years these farmers usually draw on government dollars for support. These farmers are vulnerable to the vagaries of international commodity prices. The upside is that there are times of great opportunity to expand and engage in very profitable business. The downside is that the more export reliant these industries are, the greater the crash when something goes wrong, like the BSE crisis.
Andrew Coyne turned a harsh eye towards supply management in his recent Maclean’s article. Such scrutiny is necessary and good for regulated industries from time to time. However, agriculture is not a monolithic industry and different approaches are necessary and good for different aspects of this industry. Expect more on the Coyne column next week.
Nathan Stevens is the Research and Policy Advisor for the Christian Farmers Federation of Ontario. The CFFO Commentary represents the opinions of the writer and does not necessarily represent CFFO policy. The CFFO Commentary is heard weekly on CFCO Chatham, CKNX Wingham, and UCB Canada radio stations in Chatham, Belleville, Bancroft, Brockville and Kingston. It is also archived on the CFFO website: www.christianfarmers.org. CFFO is supported by 4,200 family farmers across Ontario.
September 2, 2011
Andrew Coyne, one of Canada’s most respected journalists, has garnered a lot of attention in his recent article in Maclean’s that turned a harsh eye towards supply management. He makes a number of strong assertions in his article that are worthy of further discussion. This is the first in a series of commentaries that will provide counter-points to those assertions, this time focusing on why there are different rules for different farms.
Coyne questions why we should have one set of rules for some farms, and another for the rest? I would ask if having different sets of rules for different situations is really so strange? He seems to think that agriculture is monolithic in approach, which couldn’t be further from the truth. Furthermore, in all areas of employment and business there are different sets of rules with advantages and disadvantages. As an example, there are unionized electricians and independent operators. The key feature of unionized workers is that they have bargaining power at the cost of having to adhere to a set of rules that work for the group as a whole, even if some individuals could or might want to do more. Independent workers have a different set of vulnerabilities and opportunities. It is similar in agriculture.
Supply-managed farmers have accepted limitations on their opportunities by choosing to only produce for the domestic market. If milk and milk product consumption in Canada goes up, new quota is made available. If demand goes down, which it has, production goes down to match it. In return for accepting this limitation, farmers are granted protection from foreign dumping and receive bargaining power when determining price. This is extremely important when dealing with a product that has a limited shelf life and sees new supply produced daily.
Non-supply managed farmers deal with the boom and bust of commodity price cycles. There are good years and bad years, and in the bad years these farmers usually draw on government dollars for support. These farmers are vulnerable to the vagaries of international commodity prices. The upside is that there are times of great opportunity to expand and engage in very profitable business. The downside is that the more export reliant these industries are, the greater the crash when something goes wrong, like the BSE crisis.
Andrew Coyne turned a harsh eye towards supply management in his recent Maclean’s article. Such scrutiny is necessary and good for regulated industries from time to time. However, agriculture is not a monolithic industry and different approaches are necessary and good for different aspects of this industry. Expect more on the Coyne column next week.
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