Food Safety Independent of Marketing Boards

Commentary, Marketing Boards, John Heimbecker

Yes, Peter Holle, Canadians do pay more for their milk than Americans do. What are we paying for besides a reasonable return for our dairy producers? We are able to buy, at a reasonable price, a product that is relatively free from bovine enhancement drugs; that is government quality-controlled (instead of producer-controlled); and all of this for a reasonable price.

Personally, I do not want American-quality milk, eggs or chickens. I do not see the present price of milk as something the poor cannot afford, except in the northern areas where liquor and pop enjoy a transport subsidy that milk does not.

If, Mr. Holle, you really want to make life better for the poor, stop trying to sell Canada off to the U.S. Instead, please do an investigation of the drug industry, or bank charges or any other legal capitalistic enterprise that squeezes the last cent out of Canadians. Stop picking on the agricultural sector of our society. Would you really want hostile serfs producing the cheap milk you want so badly?

JOAN PETERS, Cartier, Manitoba

John Heimbecker, a Winnipeg businessman and a member of the Frontier’s Rural Renaissance Project advisory board, responds to that letter…

Supply management hawks have always argued that marketing boards are crucial elements in the control of food safety. Nothing is further from the truth. Food safety is controlled in Canada today by the Canadian Food Inspection Agency (CFIA), whose mammoth staff and budget set all of the rules and regulations regarding food manufacturing, storage, and transportation. Other government bodies who oversee our system include Agriculture Canada and the Canadian Grain Commission, and some smaller provincial agencies, along, of course, with industry self-regulation. All marketing boards are subject to these regulators’ standards. In many cases; marketing boards have disagreed wholeheartedly with CFIA rulings.

My experience with the CFIA suggests that the food system within Canada is extremely safe and in good hands. More often than not, it will opt for extreme caution, even when ruinous financial harm is the result. Notwithstanding the vigilance of these government and self-regulating agencies, it is the consumer who should ultimately determine what is right or wrong, good or bad. The end users’ ability to exercise their franchise to buy or not buy will ultimately govern how food is produced. That is how market economies thrive and why businesses succeed or fail. We have seen proof of this recently with products created by means of genetically modified organisms (GMOs). Many consumers are resisting GMOs fiercely and this storefront opposition has caused many manufacturers and promoters to re-think their strategies. There will never ever be a substitute for consumer vigilance.

If supply management does not regulate food safety, what does it do? First, it misallocates financial resources. Second, it is used as political capital to buy votes both provincially and federally. Third, through the stroke of a pen, it imparts substantial financial gain to a precious few. Fourth, it prevents innovation brought about by economies of scale and competition. All of these ultimately manifest themselves in the form of an indirect consumption tax on purchasers of supply managed products. These consequences have ample documentation and require no expansion here, except to say that these costs to society are largely unfamiliar to the Canadian taxpayer.

The critic of ag policy reform also suggests that the Frontier Centre “stop picking on agriculture.” I would come at this position from a slightly different view. The very thing we need to do in Canada is to start picking on agriculture, but in a positive way. Canada has been largely without any relevant agricultural policy for many years. Government has been unwilling and unable to bring any leadership to this segment of our economy. It is a complex issue. and not as sexy as American bashing or the doling out of foreign aid. but it is equally, if not more important. The long-term viability of our food production, manufacturing and primary export businesses have been and will be a substantial pillar for Canadian growth, health and prosperity. We need to pick on it, and ultimately strengthen it, by subjecting it to the discipline of market forces.

Canada’s agricultural policy, including our predilection for supply management and other direct forms of subsidy, is a grab bag of confused evasion of free markets. In the past, Canadian and provincial governments have attempted to satisfy the needs of all interested parties, including consumers, with jury-rigged, hastily prepared, staggeringly expensive and misdirected programs, which ultimately benefit no one and end up weakening the very industries they were intended to help. If nothing else, supply managed systems have been insulated from these ludicrous programs mainly because they are stable. It may be that consumers would prefer to pay an indirect consumption based tax to producers who operate within these systems rather than having their governments continuously bail out the industry with direct, income-tax based dollars. But these are not the only alternatives.

The Australian transition from supply management in dairy to a free market offers a valuable lesson for Canadians. It is possible to have the best of all worlds, with a healthy farm sector unsupported by direct or indirect subsidies. The solutions to Canada’s agricultural problems need to be addressed, and the Australian program offers an exit strategy from supply management that can strengthen the dairy industry without long-term penalties for producers or consumers.

Reforming Milk the Australian Way