Supply management

Strong and united for our agriculture, jobs and local food products

Supply management is a system that allows milk, poultry, turkey, table egg and hatching egg farmers to establish the best possible balance between supply and demand for their products in Quebec and Canada.

Under this system, farmers produce only the quantity of products needed to meet the requirements of Canadian consumers, thus avoiding surpluses that would have to be sold at a loss. Canadian supply-managed sectors rely entirely on market prices and receive no government subsidies to support their revenues. They need the Canadian market to be protected so that exporting countries that heavily subsidize their producers or that benefit from weather conditions we cannot compete against, less stringent rules and cheap labour are not allowed to invade the Canadian market.

Image

The three pillars of supply management:

  • Production planning based on Canadian demand;
  • Producer prices negotiated on the basis of production costs;
  • Import controls to efficiently match supply to demand.

Supply management is a model that benefits:

Consumers, who have access to local, high-quality products at affordable prices, without having to support producers through taxes;

Governments and society, which benefit from substantial economic and tax spinoffs from the sector;

The agri-food industry, which is assured a steady supply of high-quality products;

Producers, who obtain a fair income entirely from the marketplace.

Image

The Trans-Pacific Partnership (TPP) free trade talks

The multilateral Trans-Pacific Partnership (TPP) free trade talks, in which Canada has been actively engaged since 2012 with Australia, Brunei, Chile, the Unites States, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam, could wrap up very soon.

Although the Canadian government has repeatedly committed to defending supply management in all trade negotiations, dairy, egg and poultry farmers are highly concerned that the government will accept new concessions that will lead to the dismantling of the system. Canada is under tremendous pressure to open its supply-managed markets. With the United States, New Zealand and Australia calling for a complete deregulation of agricultural markets as part of this deal, the level of anxiety among farmers is very high. They are justifiably skeptical, particularly in light of the last-minute concession granted by Canada in 2013 to conclude an agreement under the Comprehensive Economic and Trade Agreement (CETA), which allowed 17,700 tonnes of additional, heavily subsidized cheese imports from the European Union into the country. In the medium term, farmers’ ability to maintain supply management will be under serious threat if any concessions are made during the TPP or any other free-trade agreement.

Image

What would be the consequences of a deal that jeopardizes supply management?

  • Increased dependence on imported products not subject to the same rules, and possible supply and quality problems. As an example, milk producers in the United States dairy are permitted to use bovine growth hormones, which are banned in Canada;
  • Disappearance of thousands of farms in Quebec and Canada;
  • Loss of thousands of direct and indirect jobs on farms, in processing plants and with suppliers;
  • Heavy government subsidies to maintain and compensate supply-managed sectors.

Image

Our request to the Canadian government:

We are asking the federal government to obtain the conditions necessary to fully maintain the existing supply management system in any future TPP trade deal.

Quebec’s supply-managed commodities account for:

  • 6,920 family farms (dairy, poultry, hatching eggs and table eggs);
  • $3.4 billion in farm cash receipts, or 43.2% of all agricultural revenues in Quebec;
  • More than 92,000 direct and indirect jobs (production and processing) spread across all regions of Quebec with a tangible impact on the vitality of rural communities;
  • $1.38 billion in tax benefits at the federal, provincial and municipal levels;
  • A contribution of $8.2 billion to our GDP.