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Wednesday, August 29, 2018

SM Lobbyists on Steroids

Times are tough, no time for sleep.  Lobbyists for Supply Management ("SM") must earn their keep.  NAFTA and TPP are on the rocks.  Canada's SM is being stared down by the hungry wolves around the globe.  Can SM survive?

Maxime Bernier likely lost the PC Leadership race because of his stance against SM; one of the first Canadian politicians to do so.  You have to admire this guy's courage and fortitude.

Alberta's PC members introduced a motion debated at the 2018 PC Policy Convention to end SM:

“In order to lower the cost of food for Canadians, strengthen the agricultural sector and open more markets worldwide for Canadian exporters, a Conservative government will phase out supply management while smoothing the market adjustment for Canadian farmers,” reads the proposed change.

In one of the many other puff pieces designed to support SM, I chose to respond as follows:

Dear Alan:

I saw your article "Canada mustn’t cave on milk marketing" in Charlottetown's The Guardian newspaper on Aug. 26, 2018 (https://www.theguardian.pe.ca/opinion/columnists/alan-holman-canada-mustnt-cave-on-milk-marketing-236378/ ).

It appears that you tried to address all of the standard arguments against Supply Management.  I would like to reply to each of those arguments, and add a few additional arguments on the other side.

Before I begin, I want to make full disclosure of my bias on this hot issue.  I am a small flock chicken farmer, one of 60,000 or so non-Supply Management (ie. non-SM) chicken farmers across Canada. There are about 4,000 SM chicken farmers in Canada, which is just 6.6% of all Canadian chicken farmers.  Small flock, non-SM chicken farmers have had our rights and freedoms stolen from us so that the  SM chicken farmers can rule the roost, and impose tyrannical rules upon the non-SM chicken farmers.  I call it *Chicken Apartheid* because SM allows the minority to dominate and persecute the majority.  While your article and my response will focus on the SM dairy sector, I believe the other sectors of SM are as bad or worse than dairy.

1. You said, "It’s not like there are billions of dollars
   involved...
".  I disagree.  Canadians pay a premium (from 38% to
   300% for Supply Management ("SM") commodities (eg. milk, cheese,
   butter, chicken, turkey, and eggs) over what citizens in most other
   OECD countries pay on the world's free markets.  When the annual
   tonnes consumed by Canadians are multiplied by the premium SM marked
   up prices that Canadian are forced to pay, it's in the Billions of
   dollars per year.

2. You say, "...these same free-enterprisers are not against farmers
   collecting massive government subsidies...
". I disagree.  In
   Canada, there are more lobbyists in the agricultural sector than
   pharma, automotive, IT, tech, banking, finance, or any other
   business sector.  Lobbyists in SM are the largest and best of all
   Agriculture Lobbyists.  Those Ag. lobbyists are highly paid and very
   effective at their job of keeping those subsidies flowing.  The SM
   system double dips in that governmental feed trough.  SM is eligible
   for most of those subsidies and governmental programs like most
   other farmers, then also get to write their own laws and enforce
   them on non-SM farmers and all Canadians as o how SM will control
   and gouge Canadians and manipulate the system to their personal SM
   advantage.  There is a governmental panel that must endorse these SM
   decrees, but it is mostly a toothless lap dog who does what it's
   told to do, rubber stamping and approving almost everything that is
   placed before it by SM lobbyists.

3. You say, "If Canada’s poor can’t afford to buy milk, then
   increasing the subsidies to the poor would be a better use of tax
   money...
", rather than changing the SM system.  In 2015, the
   Ontario SM dairy industry dumped 400,000 litres of skim milk in
   sewage lagoons so that they could maximize their SM profits.  In a
   June 2, 2016 article in the National Post, SM is criticized for dumping
   tens of millions pounds of perfectly good skim milk as animal feed,
   flushing milk down the municipal
   sewer, dumping skim milk in pig manure composting pits, or similar
   wasteful disposal.  Ever since 2015, the skim milk dumping continues
   almost every day, but the Main Stream Media have moved on to other
   issues.  SM says their hands are tied because the Canadian skim milk
   manufacturing plants have been operating at capacity since 2015, so
   SM claims there is no other solution.  What they keep secret is that
   SM operates the system so as to maximize profits for their SM farmer
   members, not so as to serve the greater good of Canadians.  SM lies
   to the public by omission when they hide the obvious facts that they
   could build additional skim milk manufacturing capacity, or the
   liquid skim milk could be shipped to US powder milk producing
   plants, or they could sell the skim milk to Canadian consumers at a
   low enough discount price so as to clear any surplus, or donate the
   skim milk to Food Banks, or run the SM system so that all dairy
   products and by-products are balanced and have a ready market at a
   fair price.  Canadians have consistently wanted more butter than
   what Canadian dairies can produce, and drink less and less homo and
   skim milk because it's so expensive.  SM selfishly obliges these
   desires by charging up to 300% more than world prices for Canadian
   butter, then imports cheap New Zealand ("NZ") surplus butter by the
   tonnes, jacks up the low import price by 300% to sell NZ butter to
   desperate Canadians, and uses the "buy low -- sell high" price
   gouging profits on NZ butter to pay for the Canada-wide advertising
   and lobbying about the goodness of Canadian butter and dairy
   products.  Sheer and udder [sic] hypocrisy!

4. You claim that SM is a "...system that provides high quality dairy
   product...
".  Quality of milk is usually measured by:   a)
   contamination of milk with bacteria,  b) BTSCC (bulk tank somatic
   cell count   ie. puss);  and c) adulterants in the milk.  Using data
   from the Canadian Dairy Commission and USDA, in 2011-2012 Canadian
   milk had an average of 239,556 BTSCC, while US milk was 197,000 so
   US milk is 21% better than Canadian milk for BTSCC.  When the
   Canadian milk quality standards were tightened in Jan. 1992, the
   number of incidents of adulterated milk in Canada from improper
   antibiotic use significantly increased, likely as Canadian dairy
   farmers tried to take the easy way out to meet the tougher quality
   standards.

   The quality of Canadian milk is mediocre, and variation between
   Provinces, and month-to-month are outrageous.  For somatic cell
   counts  (ie. puss) in the milk from Jan. to June 2015, Manitoba had
   the worse milk in Canada, 17% worse than the Canadian average.  BC
   had the best milk, which is 14% better than the Canadian average
   somatic cell count.  The worst month for a Province was 45% more
   contaminated
than the best month.  For bacterial contamination in
   Canadian milk from Jan. to June 2015, the monthly variability across
   all Provinces is 48%, which shows an out of control situation,
   indicating poor dairy management.  Nova Scotia had the worse milk,
   208% worse bacterial count than the Canadian average.  New
   Brunswick had the best milk, which is 57% lower than the Canadian
   average bacterial contamination. The worst month for a Province was
   13 times worse than the best month.  Again, totally out of
   control.  This poor quality milk wasn't dumped, it was sold to
   unsuspecting consumers.  Thank God for pasteurization.  When we
   compare the 1998 data to the 2015 data, there has been little to no
   improvement over this 17 year period of SM mediocrity and/or negligence.

   You claim that all milk sold in Canada is "...hormone-free".
   However our SM system allows friends of SM to import BST milk from
   the USA (a hormone banned in Canada which creates up to 21% more
   milk when that hormone is administered to a cow).  In addition,
   there are credible reports of US drug companies delivering large
   shipments of BST to USA farms that are near the US-Canada border,
   then some Canadian dairy farmers or their agents cross the border,
   pick up their illicit drug supply, and personally import it to
   Canada for their dairy cows.  SM knows about these chronic
   allegations, but has done little to nothing to investigate or stop
   it from re-occurring.  Therefore claims that all milk sold in Canada
   is BST-free are not to be believed.

5. The 17,000 or so SM farmers in Canada are just 8% of all Canadian
   farmers, and just 0.05% of all Canadians.  I agree that SM is
   excellent for the 17,000 SM farmers who are the highest paid farmers
   in Canada, as SM farmers earn 21% more than non-SM farmers on
   average.  While SM is excellent for SM farmers, there is is no proof
   that SM is good for Canadians, and considerable proof that millions
   of Canadian consumers and thousands of non-SM farmers suffer
   significantly under SM's tyranny.

6. In 2015, US Bureau of Labor Statistics ("BLS", who surveys US retail
   prices to calculate US inflation rates) shows "Milk, fresh, whole,
   fortified, per US gal. to sell retail Mid-West in June 2015 for
   US$2.835 per US Gallon.  There are 3.785 litres per US Gal., so the
   equivalent price is US$0.749 per litre. Statistics Canada Table
   326-0012, Average retail prices for food and other selected items,
   monthly shows June 2015 retail price of milk was CDN$2.49 per litre
   (see Statscan).  Bank of Canada shows the average US-CDN exchange rate in June
   2015 was 0.8080 CDN$/US$. The US price converts to CDN$0.927 per litre.

  Therefore I conclude that Canadian milk is 268.6% more expensive than US milk in June 2015.
   The gouging by Canada's SM system has been consistent, both before
   and after this June 2015 example.

7. New Zealand let their SM system run amok until there were just 3
   dairies left standing in 2001, with a billion dollar corporation
   called Fonterra (NZ's biggest dairy conglomerate) producing over 90%
   of NZ milk.  Does Canada have to destroy family dairy farms in the
   same manner as NZ, or can we learn some lessons from NZ?  Today,
   about 95% of NZ's dairy products get exported.  The NZ tail wags the
   dog at this elevated level of export market shares.  With only 5%
   attention span of Fonterra for domestic markets, I suspect some
   NZ'ers feel the export markets get the best service, quality, and
   quantity, while the citizens of NZ get what's left over.  When
   Fonterra was formed in Oct. 2001, they processed 96% of NZ's milk
   supply, and Fonterrra only had two competitors, Westland Milk
   Products on the West Coast and Tatua Cooperative Dairy Company in
   Morrinsville, Waikato.  From 1990, NZ dairy exports have grown from
   NZ$2.1 Billion to NZ$15.5 Billion in 2014.  That's an average growth
   rate of 8.8% per year, doubling and re-doubling in size every 8
   years.  In the same time period, Canadian dairy exports went from
   CDN$196.5 Million to CDN$281 Million.  That's an average Canadian
   growth rate of 1.5% per year, doubling and re-doubling in size every
   47 years (mediocre to sickly).  Note that Canada and its SM system
   had just 17% of the growth that NZ's dairy farmers enjoyed.  That's
   quite a difference!  The other 83% of the potentially available
   growth that Canada could have enjoyed  was pissed into the wind by
   SM's dysfunctional thinking and actions.

8. SM was invented so as to save Canadian dairy farms operated by
   Canadian farming families.  In spite of this lofty goal, the number
   of Canadian dairy farms has dropped from 25,825 in 1993, to 12,430
   in 2011; a 4% per year average drop, halfing and re-halfing every 18
   years.  SM has failed miserably on its most important mission.  In
   2014, there is only 11,962 dairy farms left in Canada, another 1.3%
   drop from 2011.  Like the passenger pigeon decimation in the early
   1900's, the death rate continues as Canadian dairy farms become
   merger & acquisition targets by Big Ag., or go out of business in
   spite of SM's promises and because of their gouging of Canadian
   consumers.  This isn't good news, it's just how extinctions tend to
   occur.

9. SM lobbyists are constantly surveying the Canadian consumers, so as
   to nip any emerging problems in the bud.  Many of these surveys are
   quoted as alleged proof that Canadians support SM, but the only
   thing these surveys truly prove is that most Canadians don’t
   understanding SM.  For example, in 1963 steroids & hormones were
   banned in Canada, but 64% of BC consumers believe they’re still used
   in SM products, and this myth upsets most consumers.  In a 2014
   survey by Chicken Farmers of Ontario (an SM lobby group), only 3% of
   consumers realized that chicken is produced under SM, but thought
   apples, beef, honey & wheat were SM products (not true).  First we
   must educate the public.  Consumer opinions are only valid once
   comprehension is achieved.

10. In Dec. 2015, the Food Institute at the University of Guelph
   announced that food inflation in Canada is the highest in the world,
   topping 4.1% in 2015.  It will be more of the same for the near
   future.  While all food prices are on the rise, the SM commodities
   (ie. chicken, turkey, eggs, and all dairy products) are leading the
   inflation parade.

   For example, for someone earning Ontario Minimum Wage between 1995
   and 2005, the affordability of chicken dropped 31.7%. Since chicken
   has historically been the cheapest meat available, if you can't
   afford chicken, you are forced to become a vegetarian.

   Health Canada reports that 7.6% of Canadians can't afford the food
   they need to feed their families.  In the North, rural areas, and on
   First Nation reserves, 33% to as high as 80% of families have food
   insecurity.  For example, in Rankin Inlet, Nunavut a whole chicken
   sells for $80 to $90, 4 to 5 times the price paid in Toronto ON,
   making chicken unaffordable by most families.  Many families in
   Nunavut are forced to do their "grocery shopping" at the Municipal
   Garbage Dump, cutting off the best parts from the rotting garbage,
   bringing it home to cook supper for their starving family.  The
   Canada is the 7th to 11th richest country in the world, depending on
   how you measure it.  In spite of this, the United Nations Special
   Rapporteur stated that Canadian aboriginals are worse off than any
   other aboriginal population in the world.  Shame on Canada!

11. Economists have determined that Canadian dairy farms and dairy
   processing plants are the 2nd worst in the world for productivity
   (ie. $/litre production cost of milk).  SM has caused or contributed
   to Canadian dairy farmers losing their way, and falling far behind
   their dairy competitors around the world.  If the SM life support
   system was suddenly unplugged, the weak and frail Canadian dairy
   industry would immediately (or slowly) die with little hope of
   recovery.  Every day that SM remains in place, SM farmers are
   getting fatter, weaker, and closer to extinction.

12. In the end, you seem to be calling for a Royal Commission to fully
   and fairly review the entire SM system that has been in place for 50
   years, and make recommendations to improve or replace the system.  I
   can't agree more.  Lets do it.  Lets do it now.

--
Glenn Black   President
Small Flock Poultry Farmers of Canada

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