The days of supply management seem numbered
Sunday, February 6, 2011
There are signs that the political consensus supporting this long-standing arrangement is about to collapse, among them the defection of a leading Quebec spokesman
by BARRY WILSON
Pascal Lamy, the director general of the World Trade Organization (WTO), insists that 2011 is the year when trade negotiators must fish or cut bait.
If they want an end to the Doha Round of WTO talks, launched more than nine years ago, then this is the year to turn off the answering machines and begin making serious bargaining concessions at Geneva negotiations, he told negotiators late last year.
Many trade observers believe that the future of the Doha Round depends on a quick conclusion or a concession of defeat. Lamy set a deadline of mid-2011 for the outline of a deal, followed by a ministers' meeting and final horse-trading. But, in Ottawa, there was appropriate skepticism from trade and agriculture ministers that anything meaningful will happen in 2011.
Let's assume they are correct, only because the Doha Round seems doomed to become a zombie round because no one can figure out how to make it live and yet are afraid to call it dead. Yet Ottawa is very bullish on completing a free trade deal with the European Union in 2011. Late last year, both sides said they wanted a deal this year and that it will be "ambitious" and "comprehensive."
If indeed a miracle happens in Geneva and a WTO deal is struck, or Canada-EU talks produce results, there are implications for supply management.
The Conservative government insists supply management tariff protections will never be compromised and opposition MPs say they will hold the government's feet to the fire on the issue. But with all the momentum toward free trade (despite obvious protectionism on the part of the largest players), it seems the days of Canada's unique supply managed system are numbered.
At some point, the political consensus will collapse. There are signs that this is happening already and that industry leaders, if not on-the-ground producers, recognize that change is coming.
The time line may be in years but, in the long run, the system cannot withstand the hypocrisy of Canada demanding access abroad while protecting vulnerable sectors within.
Meanwhile, internally the consensus is eroding. For years, business lobbyists, the restaurant and food processing industries and farm exporter advocates have called for an end to supply management protectionism. But the system has had its defenders and politicians have used them as cover.
Recently, one of the most stellar of those defenders has defected to the other side. Mario Dumais, former chief economist with the powerful Quebec farm lobby l'Union des Producteurs Agricoles and later general secretary of the Co-op Fédérée de Québec, said in an analysis published by the Montreal Economic Institute, that the farm support model of the past four decades is no longer relevant.
Supply management price setting, quota values and high border tariffs are out of date and should be abandoned in international trade talks, he wrote. Marketing boards with single-desk powers hurt farmers and should be ditched. And farm income stabilization programs retard the industry's ability to adjust to market realities and should be changed.
He said the old policies to protect farmers have increased costs to consumers and new farm entrants and insulated farmers from market signals. "There is therefore good reason to advocate agricultural policies whose goal is not to subsidize the sector's income but to support agricultural entrepreneurship in order to help farmers become more competitive and allow them to earn their income on the market," Dumais wrote.
It is one man's opinion but from an iconic figure in the supply management wars.
The ground seems to be shifting. BF
Barry Wilson is a member of the Parliamentary Press Gallery specializing in agriculture.