In a recent editorial (Canada could lower grocery bills by scrapping supply management, June 25, 2024), authors Jake Fuss and Alex Whalen of the Fraser Institute declare that destroying Canada’s long-standing supply management system could be a “fruitful way to lower grocery bills.” This narrative is both overly simplistic and patently false.

The authors also fail to mention that farmers do not set retail prices and have no control over the final cost of groceries to consumers.

When considering farm gate prices, supply-managed products have remained stable and generally in line or below inflationary trends in Canada. For example, 2023 year-end data indicates a 6.1% decrease in the farm gate price of chicken, a 0% increase in the farm gate price of eggs, and the farm gate price of milk only increased by 2.2%.

When Fuss and Whalen talk about the “estimated” extra cost for groceries, they are referring to data that is nearly a decade old. In fact, over the 12-month period ending in November 2023, the average retail price per kg of yogurt, natural cheese, and butter in Canada was lower than that of the United States, when converted into Canadian dollars.

Supply management has been inherently good for this country over the last half century. Under this system, farmers produce food at a price that reflects their costs of production while meeting the Canadian demand. Consumers can also be assured that this food is produced with the high-quality standards they have come to expect. This is one of the reasons why Canada is ranked first in food quality and safety by the latest Global Food Security Index.

The authors suggest that one country has “successfully” abolished its supply management system, but if we look at Australia’s experience doing so, although consumer prices experienced a brief decrease in 2001, in the period of 2002-2010 prices increased more quickly in that country than in other dairy economies. There has also been a large increase in price volatility at the farm gate, and most recently, Australian farmers have seen another drop in the farm gate price despite an increase in prices at retail, with some farmers questioning whether they can remain in business. As a matter of fact, the number of dairy farmers in Australia has dropped by 35% over the last ten years, forcing them to become more dependent on foreign importers of dairy.

In other deregulated markets, consumers end up paying for their dairy twice – once through their taxes, and again in retail stores. In the United States, not only is dairy subsidized by the government, but recent data has shown that American prices for dairy and dairy products are comparable to those found in Canada.

If COVID-19 showed us anything, it was the importance of robust local food production to ensure food security. To call for such drastic changes to our food supply without giving Canadians a full understanding of the potential negative impacts of eliminating our time-tested system is short-sighted. Why would anyone suggest that our country would be better off by compromising its food sovereignty and security?

David Wiens, President, Dairy Farmers of Canada

Roger Pelissero, Chair, Egg Farmers of Canada

Tim Klompmaker, Chair, Chicken Farmers of Canada

Darren Ference, Chair, Turkey Farmers of Canada

Brian Bilkes, Chair, Canadian Hatching Egg Producers