Thursday, October 17, 2013

The Simple Way Out

Everybody needs a simple way out of this Canada-wide #SupplyMgmt mess.   Here is the solution.

Why or why didn't I see this obvious solution before!

Others have pointed out that there is an intricate web of interlocking statutes between the Federal Government and all of the Provinces, but Alberta has already given notice that they are leaving as of Dec. 31, 2013. That system took decades to build, and will decades to dismantle, but Canadians need relief now.

The 2001 Federal-Provincial Agreement for Chicken is the master document holding the entire system together.  This agreement assumes, but doesn't specifically state that the Federal Government will continue to charge an outrageous 285% duty for chicken imports.  Under international trade agreements, Canada must allow 7.5% of our previous years domestic chicken meat production into the country at a more reasonable import tariff cost of 0% (NAFTA) or 5% (WTO).

All the Supply Management  statutes, regulations, marketing boards, and everything else can stay in place as it is today.

This avoids the government being seen as reneging on its solemn vow to maintain and support Supply Management.  Supply Management can stay if that is what the #ChickenMafia and the Provinces want.  However, the Federal Government has sole jurisdiction over import tariffs.  Adjusting import tariffs avoids all those messy negotiations that take decades to achieve.

There have been many discussions about the value of quota, the crystallization of values for the quota for capital gains, the freezing of quota values, controlling the sale and transfer of quota, and reimbursing the farmers for the inflation of quota values, or any drop in quota values.

As I understand it, quota originated from the marketing boards, and was given away free to the Chicken Mafia as far as I have been told.  If it inflated in value after that, or drops in value, it wasn't the government who directly ordered that to occur; it was the free market.  Chicken quota inflated in price because it gave the owner a legal method to steal from all Canadians who bought chicken.  This proposal will likely drive quota values slowly back to where they started; worthless.  The sooner the Chicken Mafia realize this and cash out, the more they get to keep of their ill gotten gains stolen from the Canadian public.

Eventually the Chicken Mafia and everybody else may plead for the removal of these obsolete Supply Management regulations with one unanimous voice.  Until then, the Supply Management relic will be a fossilized remnant to warn us and our children about repressive schemes that create monopolies against the best interests of the people.

For the new solution to the Supply Management Monster, we need to realize 4 basic facts:
  1. Canadians need immediate relief from the Chicken Mafia and their oppressive tyranny;
  2. Chicken Mafia needs time to adapt, and get their house in order; and
  3. Federal Government has taken the side of consumers in their recent Throne Speech, and needs to make make fast tracks on those promises if they are to be re-elected;
  4. Federal Government needs tax revenue to solve their deficit.
Sigmoid Curve for the rate of change in the
removal of Supply Management from Canada.
Likely, the Chicken Mafia needs to un-learn their old evil ways, and re-learn the correct way of behaving under the new rules. This will likely be the limiting step in this change process.  If we force change upon them too quickly, there will be chaos that everybody will pay dearly for.

The Learning Curve is therefore a necessary part of this change process.  The simple concept is described on Wikipedia, and the more complex version is here. I suggest using a sigmoid curve, slow changes at first, then rapid change as the Chicken Mafia gain experience and competency, then slow change as it becomes more and more difficult once the low hanging fruit has already been harvested from within the fossilized Supply Management system.  That means the use of a Sigmoid Curve.

Here is the solution that meets all 4 of the above criteria, and will eventually solve the Chicken Mafia Fiasco:

The Solution

  1. Announce immediately this entire plan, scheduled to start taking place 6 months from now.  That will give hope to the oppressed, and allow the Chicken Mafia to get ready for what is to come.
  2. At 6 months from today, drop the import tariff on chicken from 285% to 265.11%.  That is a 7.5% drop.  The various branches of the Chicken Mafia can fight over who takes the haircut, or whether all of them share the haircut equally.  The most important factor is how much of that tariff reduction gets passed on to the consumers.  If the consumer gets none of the savings because of the continuing unbridled greed of the Chicken Mafia, then US chicken imports will likely accelerate even faster as the US food distribution companies want to establish a beach head in Canada, to get ready for what will soon come.  Passing the savings to the consumer will drop the driving force for the US invasion.
  3. The Federal Government holds back a second tariff drop of another 7.5% (from 265.11% to 247.77%) if the Chicken Mafia plays nicely.  However, if they continue to screw the Canadian consumer, the Federal Government will drop the second 7.5% reduction onto their heads sooner rather than later.  The Federal Government can track the drop in tariff and the resulting drop in consumer prices, if any.  It a disconnect between these occurs, the Federal Government can threaten another 7.5% dose of medicine, accelerating the drop in tariff.  The tariff can continue dropping until the Chicken Mafia learn to play ball, and pass the savings onto the consumer.  It's the Chicken Mafia's choice as to which path they take.
  4. Assuming that the Chicken Mafia plays nicely, a sigmoid reduction curve (see above) is used to consistently, predictably, and slowly lower the import tariff from 265.11% to 7.5%.  I believe that a 10 year period should be sufficient timing for allowing the necessary changes to occur without chaos.  Therefore 10.5 years from today, the import tariff for chicken will be 7.5%.
That's it.  Small Flockers 4 point plan for saving the free world from oppression and tyranny from the Chicken Mafia.

What do you think?

Should it be faster or slower?

Will the Chicken Mafia bypass or find a loophole to avoid the plan?

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