From The Editor: Talking supply management

Talking supply management
Brett Ruffell
October 09, 2019
By
Laval’s Maurice Doyon, an agricultural economist, has conducted extensive research about the impacts of supply management.
Laval’s Maurice Doyon, an agricultural economist, has conducted extensive research about the impacts of supply management.
In a recent column, I shared one agvocate’s call to arms. As a refresher, dairy farmer Andrew Campbell has been speaking at poultry events from coast to coast urging producers in supply managed sectors to raise awareness about the value of the system.

Campbell says there’s great power in individual advocacy efforts, and emphasizes that even one-on-one conversations with people around town about the benefits of supply management are valuable. To that end, he advises producers to stay current on the latest evidence.

New research out of Laval University provides fodder for those conversations. Economists first set out to analyze the economic impact of agriculture. Using 2015 data from Statistics Canada, they analyzed six segments: eggs, chicken, diary, hogs, beef and oilseeds and grains.

They found the sectors together contributed over $8.7 billion to Canada’s GDP that year. That activity generated $1 billion in tax revenues. Then, they delved deeper into the data, separating supply managed and non-supply managed sectors.

They found that chicken, eggs and dairy only accounted for 20 per cent of farm receipts. However, the sectors were responsible for 25 per cent of total investments, 30 per cent of total jobs created and 28 per cent of total GDP generated by farm investments. In short, supply managed sectors punch above their weight.

In the second part of their research, the Laval economists took things a step further. They conducted interviews in three rural towns in Quebec – one where supply managed farmers were dominant, another where there was more of a mix and a third community with no supply managed producers.

They spoke to virtually every small business owner, farmers and even mayors. “We were wondering about people’s perceptions regarding agriculture and supply management in terms of economic impact,” explains Laval’s Maurice Doyon, an agricultural economist.

The quick answer is they see supply management as vitally important. For one, it adds stability to local economies. The researchers talked to retailers who provide inputs for farmers. They said when other sectors are struggling, supply managed farmers were always there to pick up the slack.

“So, although for a few years I will not sell any tractors to hog or grain farmers, I will still sell some to supply managed farmers, which keeps me in business,” Doyon says. “It keeps the infrastructure so when the other sectors pick up things aren’t dismantled.”

They also talked to retailers about indirect benefits of supply management. For instance, a restaurant owner said the system was a boon for her business. “She says it’s not that the farmers are all eating at my place,” Doyon says. “It’s all the activity around the farm that’s generating most of my business.”

Also of note, a hog farmer said he envied the income stability supply managed farmers enjoy because it makes it easier to invest. The producer said he had to sit on a pile of cash to prepare for bad times, as many go bankrupt during downturns due to cashflow problems. “The supply managed guys know they have regular income so they can plan and invest better,” he told the researchers.

Doyon proposes an ‘elevator pitch’ poultry producers could share: “The stability associated with revenue from supply management enables producers to make regular investments, which in turn allows communities to keep local infrastructure vital to agriculture and other sectors intact.”

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