How Did Canada’s Supply Management Policy Come to be? | Part 1

Aug 23, 2012

Evolution of Canada’s Dairy Supply Management Policy

The George Morris Centre – Canada’s leading agriculture think-thank in partnership with the Conference Board of Canada released the first paper in a series that is examining Canada’s dairy supply management system. The paper entitled “Canada’s Supply-Managed Dairy Policy: How We Got Here” looks at the policy from the dairy industry’s perspective.

The study provides context into supply management, explaining how the policy came to be. The combination of historically low profit returns for dairy farmers and milk surpluses was one of the leading drivers for the creation of supply management. In the early 20th century, Canada was a major exporter of dairy products to the UK during World War II. However, after the war UK dairy production recovered and Canadian dairy products declined. This prompted a swift response from the Canadian dairy industry to begin shifting their priorities from a leading exporter to serving the domestic market. However, this proved to be a challenge for the dairy sector as it led to milk supply surpluses and poor economic returns for farmers. In the midst of these unfavorable market conditions post-war both the federal and provincial governments stepped in and intervened to stabilize the markets.

Over a period of time, the cost of surplus removal became a burden for governments, so the policy shifted to limit the production eligible for subsidy, which later led to limit production. In the 1960s the dairy policy saw fragmentation between the federal and provincial government policies. The tension caused three major things happen. First, province’s began to streamline their producer agencies that were involved in milk marketing. Second, in 1967 the federal government created the Canadian Dairy Commission which introduced quota eligibility. Lastly, in 1971 the interprovincial market-sharing agreement was established.

Since then, the supply management policy has evolved into a popular policy among many dairy farmers. However, the last 20 years has been a source of contention between the policy and free trade opportunities.

The next installment in this series will provide a comparative analysis between Canada’s supply management policy and other peer countries. The research is being produced for the Global Commerce Centre that seeks to help political leaders understand economic dynamics at the global level and often provides advice for public policies.

The link to the full paper can be found here:

http://www.conferenceboard.ca/e-library/abstract.aspx?did=4980

Video: Evolution of Beef Cattle Farming

The Clear Conversations podcast took to the road for a special episode recorded in Nashville during CattleCon, bringing listeners straight into the heart of the cattle industry. Host Tracy Sellers welcomed rancher Steve Wooten of Beatty Canyon Ranch in Colorado for a wide-ranging discussion that blended family history and sustainability, particularly as it relates to the future of beef production.

Sustainability emerged as a central theme of the conversation, a word that Wooten acknowledges can mean very different things depending on who you ask. For him, sustainability starts with the soil. Healthy soil produces healthy grass, which supports efficient cattle capable of producing year after year with minimal external inputs. It’s an approach that equally considers vegetation, animal efficiency, and long-term profitability.

That philosophy aligned naturally with Wooten’s involvement in the U.S. Roundtable for Sustainable Beef, where he served as a representative for the Colorado Cattlemen’s Association. The roundtable brings together the entire beef supply chain—from producers to retailers—along with universities, NGOs, and allied industries. Its goal is not regulation, Wooten emphasized, but collaboration, shared learning, and continuous improvement.