What is Supply Management? Part 1

by Lisa Bishop-Spencer on June 9, 2009

Canada’s chicken farmers operate under a system called supply management. You may have heard of it, but what does it mean, and how does it affect you?

Supply management is a system that matches production to Canadian demand, allows farmers to receive a fair price from the marketplace without relying on taxpayer dollars, eliminates major fluctuations in prices at the farm, processing or distribution level, and ensures an efficient and secure food supply that respects Canadian sanitation and health standards.

With supply management, farmers work together to match what they grow with what consumers need and want. Consumers get good value for their money: a reliable supply of quality food at reasonable prices. Farmers receive their returns from the marketplace without relying on subsidies or taxpayer dollars.

Supply management is founded on three critical and equally important pillars. If one pillar is weakened, supply management as a whole is weakened.

Import Controls Pillar

Matching supply with demand for food allows Canadians to count on stable food prices. This, along with the predictability of imports, ensures that it is possible to make a living in agriculture.

Producer Pricing Pillar

In Canada, farmers collectively negotiate minimum farm gate prices for milk, poultry and eggs. By acting together, farmers negotiate a fair price for their products based on what it costs to produce them.

Farmers do not set retail prices and have no say in the price being paid at the retail level.

Production Planning Pillar

Under supply management, farmers plan their production to produce a steady supply of quality food that efficiently reflects changes in consumer demand. This prevents sudden price shifts as products move from farm to plate.

Did you know that the  dairy, poultry and egg Industries:

  • contribute a net $13.7 billion to the GDP
  • generate $7.4 billion in farm cash receipts
  • sustain more than $43 billion of economic activity
  • employ more than 215,000 Canadians throughout the country

Do you have questions about supply management?  Post them in the comments and we’ll do our best to answer them.

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