Canada’s dairy and poultry pricing hurts the poor
Milked and feathered
Canada’s system of supply management for dairy and poultry industries increases the cost of living as a percent of income for poor households much more than for their richer counterparts, a new study reports.
The findings are reported in “Milked and Feathered: The Regressive Welfare Effects of Canada’s Supply Management Regime”, a forthcoming paper to be published in the journal Canadian Public Policy.
Authors Ryan Cardwell, Chad Lawley and Di Xiang, economists at the University of Manitoba, examined consumer food choices to assess the validity of a criticism of supply management: that high prices for dairy and poultry products impose regressive distributional effects on Canadian consumers.
“It is notable that all three national political parties staunchly support a system that impedes access to healthy foods, particularly for poor consumers,” Cardwell says. “Such a policy counteracts poverty-reduction measures and healthy-eating initiatives that are undertaken by various levels of government.”
The production and trade of dairy and poultry products in Canada are controlled by a system of supply management. Output is regulated with production quotas, and imports are restricted through a system of tariff rate quotas.
Canada’s supply management system is earning more public attention since many of Canada’s trading partners, such as the European Union, are seeking better access to Canadian dairy and poultry markets in negotiations over proposed preferential trade agreements. These pressures have renewed debate about the future of supply management in Canada.
The authors used data from the Statistics Canada Food Expenditure Survey to estimate consumer responses to price changes for dairy and poultry products. These estimates were used to calculate the burden that supply management imposes on consumers at different income levels. Canada’s supply management policies are highly regressive, imposing a burden of approximately 2.3% of income ($339) per year on the poorest households, which is almost five times as large as the 0.5% ($554) burden imposed on the richest households. The burden is larger for households with children.
For more information contact Sean Moore, Marketing Communications Office, University of Manitoba, 204-474-7963.