Welcome!

News Feed Item

Consumers — and farmers — would prosper from reformed dairy policy

Reform means ending price setting, opening export markets, and compensating farmers fairly for milk production quota

OTTAWA, March 6, 2014 /CNW/ - Consumers would enjoy a long-term reduction in dairy prices and the industry could be even more profitable than it is under the existing supply management system, under a reform proposal released today by The Conference Board of Canada.

The report, Reforming Dairy Supply Management: The Case for Growth, proposes a three-part reform in which Canadian consumers could eventually save an estimated $2.4 billion annually, and farmers could gain almost $2.5 billion from exporting high-quality dairy products to markets where demand is growing rapidly.

"A win-win reform package needs to be accompanied by a new vision for industry growth," said Michael Bloom, Vice-President, Industry and Business Strategy. "Dairy producers and rural communities have a lot to gain from reform under a growth scenario. More efficient producers are more likely to see an upside. But we have to change the way we do business."

HIGHLIGHTS
  • Supply management reform needs to co-ordinate three policies: liberalizing prices, unwinding milk production quota and reducing trade barriers.
  • A temporary consumer levy on dairy products could serve as transitional funding as the system is reformed.
  • Under reform of supply management, consumers would see lower prices over the long-term and Canadian producers would more than make up for lower domestic prices through export sales.

The report argues that the transition to a new system must address issues of funding, efficiency, equity, and duration (FEED) in a comprehensive manner.

"Supply management reform must coordinate the three major aspects of supply management: price setting, quota, and trade barriers. Cutting out any single part of the reform makes the entire system unstable," said Bloom.

Production quota reform
Production quota is, in effect, a licence to produce milk, which serves to limit the supply. Quota has become a valuable asset in the dairy industry, with large sums of money tied up in its purchase and sale. Any policy change must address quota reform; the Conference Board recommendations that it be done through a book value buyout-(the price paid for the quota at purchase). Such a reform would cost an estimated $3.6 billion to $4.7 billion, according to the report.

This approach is particularly important for farmers who have recently bought quota and therefore not yet realized the full value of the quota, which takes about 10 to 15 years. A market value buyout is unfair because it would compensate farmers for quota where they have already realized a return, effectively paying them twice for the same quota.

Price reform
The buyout cost could be funded through a consumer levy on dairy products, as was done in Australia. In the short-term, Canadian consumers are unlikely to see a significant change in dairy prices from current levels, which the Organisation for Economic Co-operation and Development has estimated costs about $2.6 billion more than prevailing world prices, or $276 per family. Within about five years, prices would likely settle at about the world average and consumers would see this amount returned to them in lower prices.

Trade reform
While price and quota reforms are taking place, trade policy negotiators need to gain access to international markets for Canadian dairy products. The worse-case scenario is one in which the domestic market opens to dairy imports before Canadian farms are ready to compete by scaling up production.

This report is one of 20 being produced by the Centre for Food in Canada. Since 2010, the Centre has been engaging stakeholders from business, government, academia, associations, and communities in creating a Canadian Food Strategy —one that will meet the country's need for a coordinated, long-term strategy on industry prosperity, healthy and safe food, household food security, and environmental sustainability.

The strategy will be launched at the 3rd Canadian Food Summit 2014: From Strategy to Action, March 18-19 at the Metro Toronto Convention Centre.

SOURCE Conference Board of Canada

More Stories By PR Newswire

Copyright © 2007 PR Newswire. All rights reserved. Republication or redistribution of PRNewswire content is expressly prohibited without the prior written consent of PRNewswire. PRNewswire shall not be liable for any errors or delays in the content, or for any actions taken in reliance thereon.

Latest Stories
Cloud promises the agility required by today’s digital businesses. As organizations adopt cloud based infrastructures and services, their IT resources become increasingly dynamic and hybrid in nature. Managing these require modern IT operations and tools. In his session at 20th Cloud Expo, Raj Sundaram, Senior Principal Product Manager at CA Technologies, will discuss how to modernize your IT operations in order to proactively manage your hybrid cloud and IT environments. He will be sharing bes...
DevOps at Cloud Expo – being held October 31 - November 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA – announces that its Call for Papers is open. Born out of proven success in agile development, cloud computing, and process automation, DevOps is a macro trend you cannot afford to miss. From showcase success stories from early adopters and web-scale businesses, DevOps is expanding to organizations of all sizes, including the world's largest enterprises – and delivering real r...
As DevOps methodologies expand their reach across the enterprise, organizations face the daunting challenge of adapting related cloud strategies to ensure optimal alignment, from managing complexity to ensuring proper governance. How can culture, automation, legacy apps and even budget be reexamined to enable this ongoing shift within the modern software factory?
New competitors, disruptive technologies, and growing expectations are pushing every business to both adopt and deliver new digital services. This ‘Digital Transformation’ demands rapid delivery and continuous iteration of new competitive services via multiple channels, which in turn demands new service delivery techniques – including DevOps. In this power panel at @DevOpsSummit 20th Cloud Expo, moderated by DevOps Conference Co-Chair Andi Mann, panelists will examine how DevOps helps to meet th...
Most technology leaders, contemporary and from the hardware era, are reshaping their businesses to do software in the hope of capturing value in IoT. Although IoT is relatively new in the market, it has already gone through many promotional terms such as IoE, IoX, SDX, Edge/Fog, Mist Compute, etc. Ultimately, irrespective of the name, it is about deriving value from independent software assets participating in an ecosystem as one comprehensive solution.
In his keynote at @ThingsExpo, Chris Matthieu, Director of IoT Engineering at Citrix and co-founder and CTO of Octoblu, focused on building an IoT platform and company. He provided a behind-the-scenes look at Octoblu’s platform, business, and pivots along the way (including the Citrix acquisition of Octoblu).
SYS-CON Events announced today that A&I Solutions has been named “Bronze Sponsor” of SYS-CON's 20th International Cloud Expo®, which will take place on June 6-8, 2017, at the Javits Center in New York City, NY. Founded in 1999, A&I Solutions is a leading information technology (IT) software and services provider focusing on best-in-class enterprise solutions. By partnering with industry leaders in technology, A&I assures customers high performance levels across all IT environments including: mai...
SYS-CON Events announced today that Systena America will exhibit at SYS-CON's 20th International Cloud Expo®, which will take place on June 6-8, 2017, at the Javits Center in New York City, NY. Systena Group has been in business for various software development and verification in Japan, US, ASEAN, and China by utilizing the knowledge we gained from all types of device development for various industries including smartphones (Android/iOS), wireless communication, security technology and IoT serv...
Every successful software product evolves from an idea to an enterprise system. Notably, the same way is passed by the product owner's company. In his session at 20th Cloud Expo, Oleg Lola, CEO of MobiDev, will provide a generalized overview of the evolution of a software product, the product owner, the needs that arise at various stages of this process, and the value brought by a software development partner to the product owner as a response to these needs.
Five years ago development was seen as a dead-end career, now it’s anything but – with an explosion in mobile and IoT initiatives increasing the demand for skilled engineers. But apart from having a ready supply of great coders, what constitutes true ‘DevOps Royalty’? It’ll be the ability to craft resilient architectures, supportability, security everywhere across the software lifecycle. In his keynote at @DevOpsSummit at 20th Cloud Expo, Jeffrey Scheaffer, GM and SVP, Continuous Delivery Busine...
While some vendors scramble to create and sell you a fancy solution for monitoring your spanking new Amazon Lambdas, hear how you can do it on the cheap using just built-in Java APIs yourself. By exploiting a little-known fact that Lambdas aren’t exactly single threaded, you can effectively identify hot spots in your serverless code. In his session at 20th Cloud Expo, David Martin, Principal Product Owner at CA Technologies, will give a live demonstration and code walkthrough, showing how to ov...
SYS-CON Events announced today that Outscale will exhibit at SYS-CON's 20th International Cloud Expo®, which will take place on June 6-8, 2017, at the Javits Center in New York City, NY. Outscale's technology makes an automated and adaptable Cloud available to businesses, supporting them in the most complex IT projects while controlling their operational aspects. You boost your IT infrastructure's reactivity, with request responses that only take a few seconds.
SYS-CON Events announced today that Progress, a global leader in application development, has been named “Bronze Sponsor” of SYS-CON's 20th International Cloud Expo®, which will take place on June 6-8, 2017, at the Javits Center in New York City, NY. Enterprises today are rapidly adopting the cloud, while continuing to retain business-critical/sensitive data inside the firewall. This is creating two separate data silos – one inside the firewall and the other outside the firewall. Cloud ISVs ofte...
SYS-CON Events announced today that Interoute has been named “Bronze Sponsor” of SYS-CON's 20th International Cloud Expo®, which will take place on June 6-8, 2017, at the Javits Center in New York City, NY. Interoute is the owner operator of Europe's largest network and a global cloud services platform, which encompasses over 70,000 km of lit fiber, 15 data centers, 17 virtual data centers and 33 colocation centers, with connections to 195 additional partner data centers. Our full-service Unifie...
SYS-CON Events announced today that CollabNet, a global leader in enterprise software development, release automation and DevOps solutions, will be a Bronze Sponsor of SYS-CON's 20th International Cloud Expo®, taking place from June 6-8, 2017, at the Javits Center in New York City, NY. CollabNet offers a broad range of solutions with the mission of helping modern organizations deliver quality software at speed. The company’s latest innovation, the DevOps Lifecycle Manager (DLM), supports Value S...