Thursday, October 16, 2014

SM Screws the Poor

Another study has found that Canada's Supply Management is a regressive policy which hurts the poor significantly more than the rich.  Canadians in major Canadian cities are forced to pay up to 69% more for whole chickens that the nearby US cities.

Canadian Public Policy ("CPP") has accepted the manuscript of Ryan Cardwell, Chad Lawley and Di Xiang; all Professors of Economics, Department of Agribusiness and Agricultural Economics at the University of Manitoba.  That journal is expected to come out in December 2014.  In the interim, the Winnipeg Free Press has summarized the soon to be published paper.

Ontario Farmer added:
"They say the price differences amount to 2.3 per cent of the annual income of Canada’s poor people, but only half of one per cent of annual income for the rich.
This means supply management is what economists call a 'regressive' government policy, hitting the poor harder than the rich."
Whole chickens should be ubiquitous, the lowest common denominator, the primary resource from which all other chicken products are derived.  As such, it should be the cheapest, generic form of chicken.  How do we explain that what should be the cheapest, generic form of chicken has a 69% price differential between Canada and US, just on the other side of the border?

The SM boys are quick to shoot holes in the papers data and arguments.  For example, the #CHickenMafia claim that SM has been unfairly singled out, for no matter what the poor buy, it will consume a larger portion of their available income.

That is the reason I took a different approach.  Rather than comparing the rich to the poor, I compared each strata to themselves over time.  Chicken has become up to 31.7% less affordable for minimum wage earners between 1995 and 2005 (see SFPFC's Blog Posting "Unaffordable Chicken In Ontario" ).  Notice that the SM boys haven't attacked that sad statistic because there is no easy method to dismiss.  I'm sure the #ChickenMafia research labs are toiling night and day to find a propaganda solution to that sad fact that I have uncovered.  In the interim, it exposes the Supply Management System for what it is; a method to make a few millionaires from the price gouging paid by all Canadians.

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