We witnessed that in the playoffs. The intimidators and the goons came out to scare the other team into not playing smart. Before long, the penalty box was full. We have also noticed a similar game going on with the government just south of us.
For decades, they have tried to conquer the world by selling food (grains, dairy, etc.) below what it costs to produce it (COP) This gave their consumers a false sense that their food was less expensive than elsewhere in the world. Their consumers didn’t realize that the U.S. farm bill was used to compensate producers for selling below COP.
By keeping grain prices low, that indirectly subsidized dairy, beef, pork, and chicken production. When there was too much grain produced, farmers used the “set-aside program” to get paid not to plant a percentage of their farm. Farmers usually picked the poorest, wet, stony, ill-shaped fields to enroll in the “set-aside program” while getting paid for what average acres would produce.
When there was too much milk produced, some farmers enrolled in the whole-herd buyout program that not only allowed some dairy farmers to quit dairy and go into another production, but they got paid for the milk that they would have produced for three years even though the cows went to slaughter and no cows were on that farm. The last U.S. farm bill was $1.3 trillion dollars for the next decade. Yes, some of that is to pay for food stamps so poorer people could eat. Everyone could buy food stamps with a price based on their income, which allowed people that were better off to purchase food at an even lower price that was marked at the store. Some grain was donated to people in a country with drought. Some excess food was recycled as animal feed and some just disappeared.
In Canada, about a half century ago, we had a surplus of butter, skim milk powder, eggs, and chicken. The Canadian government used to buy up the surplus and try to give away some of it to needy people in poor countries. When there was even too much to give away and the expiry date was long past, some surplus was loaded onto ships and dumped at sea. The opposition parties jumped on all this waste and humiliated the government. A committee made up of farmers, government reps from different parties, was struck and given the job of coming up with a solution to this expensive and unnecessary problem. After a few months of work, the committee presented a proposal to eliminate the surplus with the farmers looking after the surplus. The solution was based on three principles.
First, each farmer who wanted to participate would be given a quota which he would be required to produce daily and not overproduce. There was a cushion of about 15 per cent that he could underproduce or overproduce and still balance his quota up without penalty. Second, the price that the farmer would receive was based on a cost of production (COP) calculated twice yearly by doing a very close inspection of all costs, labour, interest, crop inputs, etc., using a random picked group of farms of different size and location. Third, the federal government would not let other countries dump food products into Canada at a price lower than the COP. Many countries use the open-market system of marketing and buy up surplus like Canada used to do, later either dumping it at below COP wherever they can.
Those three principles are what the supply management system is based on. In trade negotiations, some countries try to chip away on some or all of those principles so they can dump more of their surplus into Canada. This supply management system allows farmers with their COP lower than the average to make a profit and remain or even grow their business, while farmers with a COP higher than average can either find a way to lower their cost, or sooner or later may have to find another way to make a living. There is no subsidy paid from taxes to help supply managed farmers. What the consumer pays at the checkout is what they pay for those products. When a farmer retires and no family member wants to continue or buy that farmer out, the farmer can sell his quota on the quota exchange in whatever province he farmed in.
When I was on the milk board twenty some years ago, we encouraged the dairy farmers to put a ceiling price on quota to allow young farmers to buy more quota or even start up a new farm. We also brought in a program to give some quota to every new producer and there was also a yearly competition for new aspiring farmers to get even more free quota. Some of the older farmers with no kids who wanted to farm didn’t like the price being frozen. Many of them had received some or all their quota free and wanted to retire millionaires.
For many years, New Zealand, many countries in the EU, and even California had a milk quota system, but not a full supply management system. Other countries kept chipping away at their system in trade negotiations and some of their farmers thought they were smarter than their neighbours and wanted to expand and bring their sons home; so they voted away their system!
The consumers thought that the prices would decrease too. The milk price decreased for a few months. Then mysteriously, consumers paid milk prices in the store higher than before the system changed, the grocery chains profits jumped, dairy farm milk prices dropped while milk surpluses increased, and mental health and farm suicides spiked.
A year after New Zealand dropped their quota system, a bus load of New Zealanders visited our farm. Many of the passengers had milked huge herds of dairy cows a week before visiting Canada. When the milk price dropped, they sold their cows to slaughter and bought a plane ticket. When I asked, “What next?” they said if the milk price returns, they would buy more cows, if not, they would sell the land!
In the U.S., most dairy farms with a future now milk a thousand cows or more. More new large dairy farms are not family owned but are huge dairy corporations milking 10,000 cows or even more. They are a safe tax haven for rich investors where farms get a break on land and corporate tax. Most cows (97 per cent) are milked by foreign workers, many undocumented. If ICE continues to pick up and deport those workers, the U.S. may have to import milk? Canada doesn’t have 50,000 chickens in one barn and eggs never got to $15 a dozen when bird flu emptied the barn.
The U.S. wants to control the world with cheap food or take it by force. Now, many large corporations that used to call the U.S. home have their head offices and factories in China. Often the team with the smartest coach can beat the bullies who are in the penalty box.
Chris Judd is a farmer in Clarendon on land that has been in his family for generations.
