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The main reason the Dairy Supply quota is in place is to stop US dairy producers from dumping dairy into Canada. That's why the USA has never reached the tarri
by Throaway826 1mo ago
The main reason the Dairy Supply quota is in place is to stop US dairy producers from dumping dairy into Canada.
That's why the USA has never reached the tarriff limit. The big producers there would just dump 20 million litres at once if they could. They aren't interested in 1 or two.
And if they were able to do that, the Canadian producers would go under. So its kinda simple, the Dairy Supply system is there to protect the Canadian Dairy industry. If it was removed, we would be flooded with cheap, low-quality US milk.
The entire Canadian dairy industry produces less milk than Wisconsin alone. Why does the US need the Canadian market? A: They don't, they just want it anyways.
- retvrn 1mo agoThe broader context is that approximately any country that wants a healthy, stable dairy industry (often regarded as a component of national security) has to provide government support to their farmers one way or another. “Stable” is particularly important for dairy because recovery when lots of dairy cattle are culled is expensive and takes years. The US and Canada use different, incompatible means for accomplishing this, so you can arbitrarily paint either as “cheating” the other by saying “well (Canada/The US) does X to the tune of (a dollar amount) and the other does zero of that, they’re cheating!”, i.e. by lying by omission. Because of the way the US subsidizes theirs, Canada could be vulnerable to dumping. So there are protections in place. This is not remotely a big deal so long as both sides are competent and operating on something resembling good faith…
- canadiantim 1mo agoThe main reason for the dairy supply quota is to protect a politically powerful cartel, everything else is justification
- kps 1mo ago> The main reason the Dairy Supply quota is in place is to stop US dairy producers from dumping dairy into Canada. Yet the same rules apply to European cheese: limited quantities that can only be imported through an established dairy cartel member. Anti-Americanism is a convenient marketing tool, along with the nostalgic myth of the independent family farm. The reality is oligarchs like https://en.wikipedia.org/wiki/Saputo_Inc https://en.wikipedia.org/wiki/Saputo_Inc.
- ericmay 1mo agoI’m dumb and misread the comment. Please ignore.
- kps 1mo agoIt sounds like you misread my comment.
- ericmay 1mo agoSorry, I did. I thought you were accusing American companies (which they can be) of being oligarchies. You’ll have to forgive me, I’ve been doing the lord’s work defending the United States a bit here and trying to clear up confusion that others have with respect to trade.
- withinboredom 1mo agoI didn't know the US had royalty... You should consider moving to the EU if you want to do work for lords and ladies.
- ericmay 1mo agoThat doesn’t make any sense. But happy to answer any questions you may have!
- yostrovs 1mo agoIt follows then that the USA also wants to protect its industries, such as timber, oil and gas, and maple syrup, from Canadian producers that are happy to dump their stuff south of the border for cheaper than US competition.
- badc0ffee 1mo agoThe US sets the price it pays for Canadian oil, a discount from the market price. I don't know about timber, but the US maple syrup industry is healthy, just unable to keep up with demand. I think that's a consequence of geography and the time investment required to get mature trees, not Canada undercutting.
- yostrovs 1mo agoCanadians don't negotiate when selling their oil? US just sets the price? Amazing.
- badc0ffee 1mo agoI don't really know how the discount is built into the price, but it's a result of the fact that only about 10% of the oil Canada produces can make it to a port to be sold to non-US buyers. https://en.wikipedia.org/wiki/Western_Canadian_Select https://en.wikipedia.org/wiki/Western_Canadian_Select
- cwillu 1mo agoThe price is “discounted” as in “it's cheaper than the global market price”, because of the shipping difficulties, but it's not a “discount” in the sense of “americans get a discount because we're nice neighbours and they have a coupon”. A common point of political contention up here are various pipeline issues, precisely because it potentially permit access to more markets, improving the sale price. (However it would also raise the price of gas in Canada for the same reason, with all the implications that comes with that).
- throw0101a 1mo ago
- EdwardDiego 1mo agoThe US has the same on dairy imports into the US for the same reason.
- gruez 1mo ago>So its kinda simple, the Dairy Supply system is there to protect the Canadian Dairy industry. If it was removed, we would be flooded with cheap, low-quality US milk. Flooded? Cheap? Yes. Low quality? Doubtful. If quality were the sticking point, you'd expect this would be amicably resolved with equal standards for both domestic and imported milk.
- conorcleary 1mo agoOk, if not blanket-ststement lower quality, it's definitely less regulated than CDN dairy.
- gruez 1mo ago>it's definitely less regulated than CDN dairy. Again, if that were the sticking point that can be fixed with rules around imports. The fact that these negotiations always end with quotas and/or tariffs strongly suggests the reason is political (ie. lobbying).
- maest 1mo agoIt's not wild to imagine Canada wants to protect a domestic food producing industry. Same how all countries, including the US, heavily subsidize and protect their agricultural sector. I'd call this strategic, not political (although ofc it involves lobbying, again, like in every other country including the US)
- gruez 1mo ago>It's not wild to imagine Canada wants to protect a domestic food producing industry. It's still protectionism, even if it's for a "good cause". During the mercantilist era protectionism was considered the obvious thing to do. After all, why would you want to make yourself poorer and enrich your enemies in the process? That doesn't mean it wasn't protectionism. >I'd call this strategic, not political (although ofc it involves lobbying, again, like in every other country including the US) For every policy that benefit some interest group there's almost always a fig leaf "strategic" justification for it. Jones act? It's to protect domestic ship building. Banning discounted medicines from abroad? They aren't been certified safe by the FDA. Tariffs on sugar? Food security and American Jobs™, of course!
- vintermann 1mo agoMaybe it's obvious, but you left out subsidized. US dairy production is extremely subsidized compared to Canada's. It's not in any sense "free trade". The subsidies would allow the US dairy industry to destroy Canada's (it might even without the subsidies, but the subsidies guarantee it). Once the local industry was destroyed, the US producers/government would be free to increase the price. No country wants that, which is why things like staple foods are subsidized and tariff-protected anywhere in the world where not doing so would give a large neighbor/bloc leverage over them.
- snayan 1mo agoThat's just a convenient talking point for our government. The model in Canada is effectively a regressive tax on consumers in the checkout line. It conveniently allows for our government to talk about how they don't subsidize farmers, and have a clean budget on that front, but I would prefer to see a model that was actually funded by government taxes such that it could be a progressive tax born more by wealthier Canadians rather than lower income ones being hit hardest. I also have doubts that our current model is the best way of achieving the goals we had in mind when the programs were created in the 1970s. I know the error bars are quite sizeable, and it's not quite apples to apples, but recent studies that suggest our supply chain management in dairy, eggs, and poultry, costs approximately $244pp per year in higher costs. That's over $10billion per annum Canada wide, equivalent to 2% of the federal budget! I have been discussing this with someone in another thread for days, and the more I look into it, the more I feel like we really need to take another look at the implementation of this program. Dollar amount breaks my brain.
- win311fwg 1mo agoThe elephant in the room is that the government is legally required to buy back the quota if change were to happen, and that is an estimated $50 billion dollar bill. Which actually doesn't sound so bad compared to your $10 billion per annum figure, but the $10B is hidden so it is easy to let it be ignored. A one time $50B payout will stick out like a sore thumb and no politician wants to attach their name to that. When they did it for tobacco back in 2009 it was only around $300 million on the table which isn't nearly as mind boggling and thus much more easily forgotten. Not to mention that very few Canadians realized that tobacco was ever supply managed to begin with so it easily few under the radar. Anything that affects dairy will be headline news.
- longitudinal93 1mo agoIt should also be noted that Canada does not permit dairy products produced with Bovine Growth Hormone, which makes our industry less competitive that American where the practice is widespread.
- win311fwg 1mo ago> does not permit dairy products produced with Bovine Growth Hormone It should also be noted that this is misleading. The dairy products are permitted to be produced with rBGH and you will almost certainly find some on the shelves as not all dairy products in Canada come from Canadian cows. What isn't permitted is giving it to cows in Canada as it is concern for reasons of animal welfare. I know you already know that, but the audience needing your message doesn't and they are prone from messaging like that to think there is some reason to be afraid of the milk even though it perfectly satisfies Health Canada concerns. It wouldn't be allowed across the border if it were deemed dangerous. It is worth reminding that Canada happily allows all and every drop of American milk across the border as long as someone is willing to pay the tariff.
- subarctic 27d agoIsn't growth hormone in your milk a bad thing? Isn't that a loophole that should be closed?