Supply management in Canada’s agriculture Econ 233
Abstract
The purpose of this paper is to give an idea of how supply management is different than normal subsidy in terms of agricultural market and how to remove supply management. Agriculture policies can heavily affect agriculture business. government giving subsidy to the farmer to develop a sustainable agricultural market. In Canada the majority agricultural production is not covered by supply management, only few product are. By supply manage those product Canadian consumers suffer from a higher price. But inefficient Canadian farmer is protected by international trade from supply management. The trade off from doing so is not balanced. But the pressure
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Back then, there were about 145,000 dairy farms in Canada. Today, that number has shrunk to under 13,000, less than half of one per cent of Canada’s economy. A small number of farmers are benefiting disproportionately, at the expense of millions of Canadian consumers.”(The Globe and Mail 2013 reference 1 )
This literature gives a good point on why the supply management system created to help producers stabilize their incomes just like other agricultural policies. but the number of farmer in the industry under the system decreases dramatically, it can be caused by new technology but at 1971 the number of farm population in Canada is about 1480000 (reference 2) and farm population in 2011 is about 20000 (reference 3) there is 86% population loss in agriculture but from this literature in the 1970s there are 145,000 dairy farmer till 2013 there are only 13,000 dairy farmers left. there is 91% population loss during supply management which is 5% more than total population losses in Canada agricultural population. It's a proof that under supply management dairy farmer is not doing well than others. the average total income of dairy farmer in 2011 is about 96.243(reference 4) but the average total income for all farmer in 2011 is about 110,563(reference 5) the average total income for dairy farmer is 13% less than another farmer.
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why not subsidize dairy, egg, chicken, turkey producer under supply management in a different way? Firstly, government needs to abolish the restriction on quantity by allow international goods enter domestic market and buy out quotes from farmer under supply management, by doing that they need to spend around 30-billion dollar(reference 7), which is hard for government to afford that, government also lose in tariff. Secondly, is the impact that supplies managed producer will face once government removes the restrictions on import. When there is no restriction there is surely a decrease in retail price. The dairy farmer in Canada with low efficiency will be forced out due to lower price. farmers and government will not accept something that could destroy their market. Thirdly, vote loss, politicians also make decisions based on vote. When doing something may cause vote loss or increase in unemployment rate, they will not risk it. And also large farmer who is doing well under supply management is lobbying government to keep supply management. In the other hand by getting rid of supply management. Firstly consumers will get lower retail price because the international price is lower than domestic price when import restriction removed, firms will compete with each other, but under Canadian law, they can't sell things under their production cost so it's a healthy competition. Secondly, domestic
Unfortunately, this business model was unsustainable due to the increasing input costs of farming and the low prices the Hatcher’s were receiving for their milk. All other local dairies faced the same issues. As a result, a federal buy-out
The article goes over the affects this deal has on some local Canadian industries. For example, the author explained that this deal will possibly increase the amount of imported foreign car parts and maybe even dairy products, which could mean a better selection as well as lower prices for consumers but also hurt some workers who operate locally in these businesses. Currently the absence of foreign products in the Canadian dairy market means that there is less selection for a higher price, but this also means that local farming communities can have stable incomes and can be
In order to fully understand the island of Tap’s market for corn, the broad term market structure must be defined. Market structure exists as the makeup of companies operating in a specific market. The two basic types of structures remain as perfectly competitive markets and monopoly markets. These exist as the two most basic and opposite forms of market structure, many other forms exist in between these two. Applying these two forms of structure to the corn market in Tap, results in different outcomes of both quantity of corn produced and price at which corn sells. The examination and application to Tap’s corn market will correspond with the two forms.
this notion of stable supply and demand affected prices of farm commodities. “Low prices on
A counter argument to the conclusion that we should not trust nor buy from our food industries could be the obvious reason that food is cheaper than ever before. When times are hard in America, we can always count on the cheap price of our fast food restaurants and their dollar menus. However, these cheap prices come at a high cost. The reason meat or grains, for example, are so cheap, is due to subsidizing the market. While this may be great for consumers, it is actually incredibly harmful to local farmers. Artificially driving down the prices
In conclusion, although CETA will bring many advantages for the Canadian industry, it will also harm major sectors resulting in decreased sales, increased taxes and lack of investment for Canada’s economy in exchange for technology and open market to millions of customers in Europe.
From a financial and marketing standpoint, the effects have been catastrophic. In some areas, milk production has decreased by an average of two liters daily and calving index (efficiency at which new calves are produced) went down by an average of twenty days (Davies NP). Th...
Farming in Canada is a backbreaking occupation. Due to the fact that many tribulations come alongside farming, the outcome is not always a positive one. Many problems can occur with the climate and soil, which creates difficulties in crops and livestock. This essay will show that farming is an extremely tough job in Canada. The sources that will be used are “Food and Agriculture”, “Fruit Growing Industry in Canada”, “Making Connections” and “www.omafra.gov.on.ca”.
The idea of the family farm has been destroyed by large food corporations. As discussed in class, industrial farming typically leads to the mass produ...
The government does this by providing financial assistance to farmers and by managing the cost and supply of certain commodities. There are a few reasons for this. One reason is to provide assistance to family-sized farm owners who have trouble competing with commercial farms. This is supposed to maintain an efficient market balance. Another reason is to control the prices of commodities and keep the global food prices low.
...struggling to earn any income at all and sometimes do not even get the opportunity to eat. Another issue that Raj Patel did not touch on is the lack of care consumers have for the farmers. It seems that consumers care about farmers about as much as the corporations do, which, in my opinion, is not a lot. When consumers only care about low prices and large corporations only care about making a profit, the farmers are left out to dry. Many consumers believe “food should be available at a bargain price, a belief that relies on labor exploitation and environmental exhaustion at multiple points along the commodity chain.” (Wright, 95) Corporations as well as consumers generally tend to be selfish and I think Raj Patel is afraid to mention this. If only these people cared a little bit more about each other I believe the hourglass of the food system will begin to even out.
One of the major areas in which the government intervenes is in the agricultural sector of the economy. The government has three ways it can intervene and help its producers. These ways include price policies, direct payments, and input policies. Price policies have the largest effect on producers. Tariffs, quotas, and taxes are just a few examples of price policies. While these policies bring revenue into the government, in the end they hurt consumers. Each of these policies raise the prices of both imported and native goods. They are designed to help stabilize prices and give the native producers a chance to compete with foreign goods. Under the doctrine of laissez-faire, the government would not interfere with prices and the native producers would be forced to lower their prices, giving the nation's citizens a better deal in the market.
When they are put in place the consumers can afford more thus increasing the demand for it. While producers make less money because its offered at a lower price, and that leads to a decrease in supply. Which is hard to understand because normally when demand goes up supply should increase as well, whether it’s a big amount or not. So the smartest thing to do would to be to raise the prices so they demand isn’t as much, allowing the supply to kind of catch up and even things out. But, suppliers can’t raise the price because that government says they
Farmers are essentially the back-bone of the entire food system. Large-scale family farms account for 10% of all farms, but 75% of overall food production, (CSS statistics). Without farmers, there would be no food for us to consume. Big business picked up on this right away and began to control the farmers profits and products. When farmers buy their land, they take out a loan in order to pay for their land and farm house and for the livestock, crops, and machinery that are involved in the farming process. Today, the loans are paid off through contracts with big business corporations. Since big business has such a hold over the farmers, they take advantage of this and capitalize on their crops, commodities, and profits. Farmers are life-long slaves to these b...
As agriculture has become more intensive, farmers have become capable of producing higher yields using less labour and less land. Growth of the agriculture has not, however, been an unmixed blessing. It, like every other thing, has its pros and cons. Topsoil depletion, groundwater contamination, the decline of family farms, continued neglect of the living and working conditions for farm labourers, increasing costs of production, and the disintegration of economic and social conditions in rural communities. These are the cons of the new improved agriculture.