Supply Management – It’s A Good Thing

Before this page was created, I was asked to contribute to the Calgary Stampede Aggie Days blog (nope, it’s not an event devoted to me). I wrote about supply management, which governs the dairy, egg and poultry industries in Canada. Supply management and quota is the core focus of my work, and I wanted to explain how the system benefits producers and consumers, especially for those that value local fares and local farmers.

This post originally appeared here, on March 30, 2015.

At the Egg Farmers of Alberta, I’m responsible for processing all quota transactions between registered egg producers in Alberta. It goes without saying that I have an intimate relationship with supply management. I believe in supply management, and I believe it benefits both consumers and producers.

First, let’s take a step back – what is supply management?

Supply management is a uniquely Canadian system that balances demand and supply.

It operates on three pillars:

1. Production discipline – the number of eggs produced matches demand to limit market fluctuations and maintain price stability

2. Pricing mechanisms – ensures that Canadian egg producers receive a fair price for their products

3. Import controls – borders are open to a predictable number of imported products

Supply management was first introduced in the late 1940’s, but it wasn’t fully implemented in the egg industry until 1967. For over four decades, producers have worked together to keep Canada’s egg industry stable and free of government subsidies. Canada’s egg industry is completely self-sufficient.

Supply management is good for consumers, because it ensures that consumers have access to fresh, locally-produced eggs and egg products. When you purchase eggs at the grocery store, you’re directly supporting a local farmer. If you ask me, that’s great news!

Supply management encourages producers to invest back into their farms. For example, a producer can suspend production for one year to build a new barn – producers earn quota credits and increase production for subsequent cycles to make up for lost time. This and other programs encourage producers to make continuous improvements to animal health and welfare. Alberta is a leader in this regard. In fact, a producer in Alberta was the first producer to install an enriched/furnished housing system in Canada, and one of our producers won the inaugural Canadian Poultry Sustainability Award.

Supply management encourages farmers to give back to their communities. Our producers volunteer their time to meet with consumers at various events across the province, including the Calgary Stampede. The Egg Farmers of Alberta, with our producers’ help, donated $30,000 to the Alberta Food Banks, and provincial marketing boards across the country work together to provide eggs for Breakfast 4 Learning, a program that feeds breakfast to school-age children.

Supply management’s opponents claim that it creates a hardship for budget-minded Canadians. Its opponents claim that marketing boards control prices at the retail level – this is incorrect. The pricing mechanisms are based on average costs of production. The only “set” price is to producers. Once the eggs leave the farm, prices are subject to free market principles. Unbeknownst to many, the producer price for one dozen eggs decreased by $0.05 in January, but retail prices haven’t changed. The amount paid to our producers is also available on our website – it’s not a secret.

This system is good for Canadians – it’s good for our farmers, who contribute millions to the economy, and it gives consumers a guarantee that eggs purchased are fresh, local, and safe.