Imagine living under a system of market control so stringent that federal police will swarm your home and arrest you if you try to sell eggs from your own farm. You don’t have to imagine it in Canada. Southern Alberta chicken farmer Henk Van Essen had multiple RCMP cruisers descend upon his property last year, and he was jailed for the crime of selling eggs without a government-issued quota.Imagine a cartel that controlled the prices of a commodity so strictly that producers would be forced to destroy any product that they produced above and beyond the limits the cartel set. That’s exactly what happens in Canada’s dairy industry, where up to a billion gallons of milk are dumped by farmers every year because they would be jailed if they tried to sell it.In any other industry, such cartels would be illegal and charged with price fixing. In Canada, we call it supply management.The supply management system works well, too. Industrial milk prices are 30% to 50% higher than in other Western countries. Families in Canada are forced to pay inflated food prices to shore up a shrinking number of increasingly rich dairy farmers, and it’s illegal to compete with them.Supply management was ostensibly created to protect the family farm. It has done the opposite. Since supply management was created in 1972, Canada has gone from having 45,000 dairy farms to fewer than 9,000 today. Starting a small operation is impossible because large farms own all the quotas, and even if they were willing to sell their precious permission to produce dairy products, the costs are out of reach for any reasonable operation..Profit margins are generous for those dairy farmers who have quotas. They average around 20%. Compare that to the four percent that grocers operate with or the five percent that restaurateurs earn for an idea of who is really gouging you on food prices. It’s not hard to maintain high profit margins when the government illegalizes competition on your behalf, of course. Or if one really wants to examine an oligopoly that robs consumers, they should check out the profit margins that banks enjoy.Citizens remain distracted from how dairy, egg, and poultry producers are robbing them, though, because those supply-managed industries are incredibly effective lobbyists. They spend tens of millions of dollars on misleading information campaigns about their industries and their competitors. They also funnel countless millions into every political party and have paid lobbyists knocking on every elected official’s door regularly.That's why members of parliament have been silent on supply management, but are now questioning the prices of canned vegetables sold at dollar stores to Canadians trying to squeak by. It’s no secret that Maxime Bernier narrowly lost his bid for the CPC leadership because he dared to openly oppose supply management. The cartels quickly shovelled mass support toward the leadership campaign of Andrew Scheer and managed to give him a narrow win. That win ended poorly for the CPC, but it was a fantastic outcome for the dairy cartels. They reminded politicians of the consequences that face public figures who oppose them..The regional factor comes into play as well. Quebec has acquired a disproportionately large amount of Canada’s dairy quotas. That’s why the Bloc Quebecois pushed legislation to try to make it impossible to tear down the price-fixing system, and the cowardly conservatives were too terrified to oppose it.Conservative supporters should call out their MPs and party representatives on supply management regularly. It is a Soviet-style system, and it goes against every fiscal principle allegedly held by conservatives. The party should be ashamed of itself for supporting a system that robs Canadian consumers so boldly, and they will only feel that shame if members stand up and push them.Inflation is pressuring Canadians and will only get worse as energy prices remain high due to the war in Iran. Meanwhile, job losses are mounting across the country, and the GDP per capita continues to decline sharply compared to other Western countries. The country is in for some hard times, and to add insult to injury, Canadian families are being ripped off on essential food purchases to protect a small number of corporate dairy farms raking in huge profits.Many things must be done to fix Canada’s ailing economy and give consumers a break. One easy fix would be to take on and end the rotten supply management system once and for all. Other countries had such systems, and they dumped them decades ago. In getting rid of supply management, the dairy, poultry, and egg industries actually got better thanks to competition, and consumers got fair prices. It’s time to end supply management now. Don’t let politicians keep hiding from this issue.
