Dear Editor,

Chris Judd’s July 9 column makes me want to better understand Canada’s supply management system (SMS). I have no skin in this game, but am a city dweller – and cottage owner at Green Lake – so my only participation is paying for food, whether it be covered by an SMS or not. Chris, I have questions about your “three principles”.

First principle: Were original quotas free? Does this not favour the original farmers? Why should all quotas not be cancelled when farmers are done with them (died, retired), if they were free? If SMS makes sense for dairy, eggs, and chickens, why not for e.g., beef, pork, lamb? Is everything else export-driven, and Canada does not want to export anything subject to SMS? Why remain small in certain industries? Are small dairy farms more sensible than small beef farms? If Alberta is more beef-oriented and Quebec is more dairy/egg/chicken-driven, does SMS not protect Quebec and let Alberta fend for itself?

Second principle: If a farmer receives a price based on cost of production (COP) – presumably with a ‘fair’ profit factored in – what is the incentive for farmer or SMS regulator to rein in costs, since that price is passed to consumers? How is the ‘fair’ profit determined? I observe more significant sales of foods not subject to SMS than those that are. As a lawyer, I opposed Bell Canada rate increases. The main issue was whether Bell was padding its rate base. The CRTC always found that, to some extent, the rate base was indeed, padded.

Third principle: Chris refers to ‘dumping’ by external (US) producers “at a price lower than the COP”. ‘Dumping’ means selling in a foreign country below cost of production in the home country. If foreign producers dump, there is a tribunal to address that. If Chris means selling below the COP of SMS farmers, again what incentive do they have to control costs, and why is that even relevant? If locals have COP set under the second principle, is that a non-tariff barrier (since the higher the home market cost, the higher the foreigner must price its goods)? Conversely, if a foreigner is selling into Canada at a price that provides it a fair profit, why should the home market be protected, if we believe in free trade at all? Are US farmers given unfair subsidies allowing them to undercut foreign markets? Ottawa has a tribunal that addresses that in non-SMS situations, so why carve out SMS? The US continually claims Canada cheats on softwood lumber because of prices charged for cutting on Crown lands. Parties deal with that in a regulatory tribunal. Why protect SMS industries – or why not protect all industries the same way?

Unnumbered principles: Can SMS be justified on arguments about subsidies elsewhere, larger corporate-owned operations, tax breaks, illegal labour etc.? Those arguments apply to everything produced here – someone somewhere always has one or more of those legitimate, or illegitimate, advantages. Why not address this by generally applicable tax policy, dumping rules, labour and competition laws?

Maybe Chris and I should meet for a beer to talk this over!

Anthony Keenleyside, Green Lake