Tuesday, October 7, 2014

Dairy, poultry prices hit poor people hard

Canada’s supply management system is hard on poor people, say the authors of a new study published in the journal for Canadian Public Policy.

The authors compared dairy, chicken and egg prices in Canada and the United States and found Canadian prices are consistently higher.

Maybe Agriculture Minister Gerry Ritz will find a few minutes to read the report.

They say the price differences amount to 2.3 per cent of the annual income of Canada’s poor people, but only half of one per cent of annual income for the rich.

This means supply management is what economists call a “regressive” government policy, hitting the poor harder than the rich.

The study compared prices in supermarkets close to the Canada-U.S. border and found that whole fresh chickens sold for $3.11 a kilogram in the U.S. and $5.26 in Canada, chicken legs
for $3.22 per kilogram in the U.S. and $3.55 in Canada.

Eggs were $1.48 a dozen in the U.S. and $2.39 in Canada.

They say supply management is probably the main, but not the only, reason why prices are higher in Canada. To that, I comment that our supermarket chains boast that they operate on far slimmer margins than supermarkets in the United States.

A report by the Winnipeg Free Press does not cite dairy price comparisons.

The authors are economists Ryan Cardwell, Chad Lawley and Di Xiang.