Wednesday, June 27, 2012

Timing right for Al Mussell

Al Mussell, senior economist at the George Morris Centre, has hit the right timing for another of his commentaries about supply management.

This time, in the midst of news media coverage of the role of supply management in Canada’s entry into the Trans-Pacific Partnership trade negotiations, Mussell has released a paper saying Canada need not lose supply management.

He says there are many things the marketing boards can do if and when market access for imports increases and tariffs decline.

Mussell had similar good timing when the Doha Round of World Trade Negotiations looked like it would lead to the demise of supply management.

Then he outlined a proposal for phasing out high-value quota by replacing it with lower-priced quota to produce milk, eggs, chickens, turkey and hatching eggs at lower market prices. 

As the market for high-priced products declined, the market for lower-priced dairy and poultry production would increase and farmers could choose, by their quota decisions, how to manage the transition.

Mussell’s current commentary underlines the real issues for Canadian dairy and poultry farmers as giving up a larger share of the Canadian market to imports and price declines as tariffs are reduced.

The question then becomes whether farmers continue to accept the disciplines of supply management when the benefits have substantially declined.

The main threat then could become some provinces defying national discipline to ramp up their production.