As food prices rise, some experts say supply management isn’t helping

Critics say supply management leads to higher prices for Canadians while stifling innovation and export opportunities. Some are advocating for it to end.

Earlier this year, a since-removed TikTok video of a Canadian farmer dumping milk while decrying supply-management rules received national media attention. It’s not the first time the image a scene, of thousands of litres of fresh milk running down a drain, has come under scrutiny.

“Milk … is a very emotional product for us,” said Michael von Massow, a food economy professor at the University of Guelph in Ontario. “We feed it to our kids, it’s a staple, one of the biggest sellers in grocery stores.”

In fact, von Massow thinks that’s one of the reasons that dairy in Canada is supply managed, alongside eggs and poultry — to protect a Canadian product for Canadian consumers.

After all, you can’t talk about competition in Canadian industries without mentioning the sectors where competition has been purposefully restrained.

First introduced in the dairy industry in the 1960s before expanding into eggs and poultry, supply management is a system that regulates the production levels, wholesale prices and trade of dairy, poultry and eggs in Canada.

It’s intended to address issues such as fluctuating supply and price volatility, yet supply management is also one of the reasons that farmers sometimes dump milk.

The kind of milk-dumping in the TikTok video — where farmers dispose of milk they can’t sell because they produced more than their quota allows — is rare in Canada, von Massow said, noting that milk also occasionally gets dumped in the U.S., where dairy farmers aren’t supply-managed.

“No farmer ever wants to dispose of milk,” said Dairy Farmers of Canada president Pierre Lampron in a statement. He said supply management is actually intended to prevent overproduction, among other things, and in exceptional circumstances milk disposal happens as a result of factors beyond farmers’ control, such as road closures or processing disruptions.