Supply management compensation put into perspective

While my natural inclination is to rail against the most recent trade deal compensation being paid to the dairy and poultry sectors, after a bit of sober second thought, I revert to the old axiom, “People in glass houses shouldn’t throw rocks.”

Compensation for anticipated loss of market share was promised to supply-managed farms by the federal government. Although individual MPs will occasionally voice concerns and opposition, all the major political parties support supply management.

Whether there is or will be an actual loss of income for dairy and poultry farmers from the trade deals never seems to get much discussion. Farm gate prices for these industries are regularly adjusted to account for cost increases. The process is often criticized for lack of transparency.

However, to appease the Holy Grail of supply management, promises were made for trade deal compensation and the government is fulfilling its commitment. It’s reminiscent of the infamous quote by former Prime Minister Jean Chretien who said, “I’m entitled to my entitlements.”

According to Karen Briere’s article in the November 17, 2022 edition of this newspaper, the allocation of $1.7 billion in the fall economic statement pushes overall compensation for supply-managed industries to $4.8 billion.

The most recent allocation is compensation for the renegotiated North American free trade deal. The federal government says a dairy farm with an average milking herd of 80 cows will receive declining payments over the next six years with those payments totaling over $106,000.

Lots of dairies are 10 times larger than the government example, so you can easily extrapolate the payment level. On top of this, producers are receiving their fourth payments from compensation paid due to trade deals with the EU as well as the Trans-Pacific region.

Remember how beef producers were sold on the benefits of a trade deal with Europe, how it was going go dramatically increase market access? Those promises have been a bust. Canada imports more beef from Europe than what we send the other direction. Canada may have negotiated a trade deal, but evidently did not consider the regulatory fine print.

Perhaps the beef industry should be lining up for trade-related compensation. After all, beef producers are arguably the least protected in the suite of business risk management programming.

While ruminating over the latest compensation for dairy and poultry producers, our farm’s final payment from Saskatchewan Crop Insurance arrived. For the second year in a row, our biggest money-earning crop is crop insurance. After adding up the amounts, the compensation being paid to dairy farmers doesn’t look so large.

Non-farming friends often ask how the crop was this year and I have to tell them it was another dry year and it’s darn lucky we have crop insurance. Then I thank them for their contribution. That usually generates a quizzical look. Most don’t think about their tax dollar subsidizing crop insurance.

Unlike 2021, the majority of grain farmers had pretty good crops in 2022 and won’t be relying on crop insurance money. However, with most grain prices at attractive levels, crop insurance coverage levels for 2023 will again be substantial.

I’m also reminded of the glass house in which I reside every time I look at the farm’s AgriInvest account balance. This little nest egg, built with 50 per cent government contributions is not available to the supply managed commodities.

Supply management may be the golden child, but grain producers may want to hesitate before throwing rocks.