Dairy farming in Canada
Dairy farming is one of the largest agricultural sectors in Canada. Dairy has a significant presence in all of the provinces and is one of the top two agricultural commodities in seven out of ten provinces.[1]
In Canada in 2011, there were 985,300 dairy cows on 12,746 farms across the country, an average of 77 cows per farm.[2] From 1971 to 2011, the number of dairy farms in Canada has dropped by 91 percent. Quebec and Ontario are the major dairy producing provinces with 49% and 32% of the farms, respectively.[2]
Dairy farming is subject to the system of supply management. Competition, both domestic and international is severely limited, restricting supply and greatly increasing profits for dairy farmers while greatly increasing the price of dairy products for consumers. Indeed, incomes of dairy farmers are consistently higher than incomes of farmers in other agricultural sectors.[3] Due to supply management, the Canadian dairy industry is isolated from the global market, and the almost all the dairy produced in Canada is consumed in Canada, and almost all of Canadian dairy consumption is from Canadian farmers.
Supply management
Dairy farming has been subject to the system of supply management since the 1970s. It restricts the supply of milk by limiting and controlling the amount produced domestically and starkly limiting imports with high tariffs. With a restricted supply, the prices increase, increasing profits for the farmers.[4] Though this system allows the federal and provincial governments to avoid subsidizing the farmers directly, consumers instead subsidize dairy farmers in through artificially high prices paid for groceries.[5] Most other agricultural sectors in Canada (grain, beef, pork, etc.) do not have similar controls, and for the most part compete fairly on the international market.
To keep supply low and prices high, it has been made deliberately difficult to become a new dairy farmer in Canada. Because the dairy industry is so lucrative, the right to own a single dairy cow is worth $28,000 (this does not include the actual price or value of the cow itself), and an average farm has $2,000,000 worth of quota.[3] For farmers wishing to enter the market and start a new farm, the price of the quota can be prohibitively expensive, and up to 75% of start-up costs. This leaves those farmers entering the industry with a heavy debt burden.[6]
Supply management isolates Canadian dairy from the international market. In order to keep prices high and farmers' profits high, purchasing milk from international farmers must be blocked. This was originally accomplished by a total ban on imports, but international trade rules forbade this. Instead there is a tiny import quota, around 8% of the cheese market or 1% of the yogurt market – the equivalent of around one teaspoon of yogurt per Canadian per year.[3][6] Past this amount, tariffs are exceptionally high, in the neighbourhood of 246% for cheese and over 300% for butter. These high tariffs render imported food unable to compete.[6][7] At the same time, because Canadian processors have to pay so much to buy milk, they are unable to compete internationally. Total dairy exports in Canada amount to only 5% of production.[3]
History
The Canadian Dairy Farmers’ Federation was founded in 1934. The group became Dairy Farmers of Canada in 1942, and its mandate was to stabilize the dairy market and increase revenues for dairy farmers.[8] In the face of lobbying, government programs were instituted in the 1940s and 1950s to increase prices and limit imports. 1958 saw the creation of the Agricultural Stabilization Board, though it was not limited to dairy.[3] In the 1950s and 1960s there was significant volatility in dairy prices, dairy producers had too much bargaining power relative to dairy farmers, the United Kingdom was poised to enter the European Common Market, resulting in the loss of Canada's largest dairy export partner. These challenges led to the creation of the Canadian Dairy Commission, whose mandate was to ensure producers received a "fair" return on investment, and to ensure the quality and supply of milk, (though without concern for consumer prices).[9]
In 1970, the National Milk Marketing Plan came into effect to control supply, with the federal government and the governments of Ontario and Quebec, the two largest provinces, signing on. By 1974 every province except Newfoundland had signed on.[3] Concurrently with the domestic controls on supply and price, the high tariffs on imported products were put in place to protect Canadian producers from competition, and keep foreign imports to very low levels.[7]
Statistics
In the 1940s butter production in Canada averaged 150,000 tonnes (150,000 long tons; 170,000 short tons) and cheese production averaged between 43,000 tonnes (42,000 long tons; 47,000 short tons) and 94,000 tonnes (93,000 long tons; 104,000 short tons). The United Kingdom received 23,000 tonnes (23,000 long tons; 25,000 short tons) in 1949.[10]
Snapshot of Canadian Dairy Industry, 2011[2]
| Province | Number of Dairy Farms | Number of Dairy Cows | Production (hectolitres) | Dairy Cows per Farm | Production (hectolitres) per Farm |
|---|---|---|---|---|---|
| British Columbia | 512 | 70,500 | 6,766,330 | 138 | 13,215 |
| Alberta | 592 | 90,000 | 6,603,623 | 152 | 11,155 |
| Saskatchewan | 182 | 30,000 | 2,304,452 | 165 | 12,662 |
| Manitoba | 344 | 44,500 | 3,213,844 | 129 | 9,343 |
| Ontario | 4,137 | 322,000 | 25,385,472 | 78 | 6,136 |
| Quebec | 6,281 | 366,000 | 28,958,369 | 58 | 4,610 |
| New Brunswick | 219 | 18,700 | 1,335,831 | 85 | 6,100 |
| Nova Scotia | 245 | 22,500 | 1,700,045 | 92 | 6,939 |
| Prince Edward Island | 200 | 13,000 | 1,005,675 | 65 | 5,028 |
| Newfoundland & Labrador | 34 | 5,900 | 476,783 | 174 | 14,023 |
| CANADA | 12,746 | 983,100 | 77,750423 | 77 | 6,100 |
See also
References
- ↑ "An Overview of the Canadian Agriculture and Agri-Food System 2012; Agriculture and Agri-Food Canada".
- 1 2 3 "Canadian Dairy Information Centre; Dairy Facts and Figures; Number of Farms, Dairy Cows and Heifers".
- 1 2 3 4 5 6 Hall Findlay, Martha; Margarita Gres (June 2012). "SUPPLY MANAGEMENT: PROBLEMS, POLITICS – AND POSSIBILITIES" (PDF). The School of Public Policy SPP Research Papers (University of Calgary School of Public Policy) 5 (19): 1–33. Retrieved October 19, 2013.
- ↑ "The price of eggs and the Throne Speech". The Globe and Mail. October 15, 2013. Retrieved October 19, 2013.
- ↑ Kline, Jesse (September 20, 2013). "Help consumers. End supply management". National Post. Retrieved October 19, 2013.
- 1 2 3 Andrew Coyne (August 15, 2011). "The $25,000 cow". Maclean's. Retrieved October 22, 2013.
- 1 2 Lee, Ian (June 27, 2012). "Tear down the supply management wall in Canada". Toronto Star. Retrieved October 19, 2013.
- ↑ "Our History". Dairy Farmers of Canada. Retrieved October 19, 2013.
- ↑ "Mandate". Canadian Dairy Commission. March 19, 2010. Retrieved October 19, 2013.
- ↑ Cloutier, Edmond, ed. (1951). The Canada Year Book 1951 The Official Statistical Annual of the Resources, History, Institutions, and Social and Economic Conditions of Canada. King's Printer and Controller of Stationery. ISBN 0-7715-8268-4.