Response to: Research paper states low income earners hit hardest by dairy supply management.
There are so many holes in this research it looks a lot like swiss cheese to me.
The concept that lower income earners will always have a higher percentage of their income go towards consumer goods and services compared to a higher income is obvious. This theory can be used for toilet paper to cars as well and does not simply apply to dairy. So it’s important to not get caught up in the smoke and mirrors of this headline: Supply management works for Canadians.
One does not need to look far other than AC Nielson, the gold standards for consumer prices, to identify that dairy prices in Canada are in fact lower than in the USA. For example, the cost of one litre of milk in Canada is $1.51 and in the USA it’s $1.61. This compares the synthetic hormone-free varieties in the USA as it’s illegal in our Canadian cows.
This isn’t an anomaly. The prices in deregulated markets have in fact increased in countries like Australia, thus costing the lower income earners a higher percentage of their income.
And let’s be clear: supply management isn’t a tax of any sort. In fact, the USA’s open market system will hit their wallets a lot more than ours. Tax payers pay $22.2 billion of their tax dollars to subsidize their dairy farms. So they pay twice. Canadians pay once at the till and those tax dollars go towards schools, roads and infrastructure.
This story also doesn’t show the entire picture. It ignores the desperate state of the dairy industries in deregulated countries. American dairy farmers are struggling to make a living and many states are seeking a supply managed model as a solution.
Tom Kootstra, local dairy farmer and chairman of Alberta Milk