Regulation and Protectionism under GATT: Case Studies in North American Agriculture

By Andrew Schmitz; Garth Coffin et al. | Go to book overview
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Ultimately, however, the success of the reform initiative in redesigning supply management so that it is stable in the long run and perceived to be fair requires taking seriously the goals of smaller (and usually poorer) provinces to maintain stable rural economies. What is probably needed are commitments by the Canadian government in the form of governmental research and development, credit and other stimulative programs and adjustment policies. And yet, such commitments appear increasingly unlikely given the imperative of fiscal deficit reduction.


Conclusion

The ability of Canada's dairy and poultry supply management systems to survive rests upon institutional and procedural reforms that enable the systems to adapt to changing market circumstances and simultaneously shore up their legitimacy. The current reform process appropriately seeks to enlarge the sphere of support for supply management by paying attention to the interests of nonproducers, including processors, further processors and consumers. The success of reform discussions hinges on an overly optimistic assessment of the consensus-building abilities of private interests -- at least in poultry supply management -- and their capacity to put long-term goals ahead of short-term concerns. Outcomes, which have the result of favoring the interests of producers and processors in some provinces at the expense of those in other provinces, are unlikely to be politically tenable. If the survival of supply management necessitates a greater emphasis on goals of efficiency and market responsiveness as appears to be the case, and if these priorities occasion sectoral restructuring (growth in some provinces, decline in others), then acceptance of these outcomes is likely to be problematic in the absence of compensation for those producers and provinces economically disadvantaged by reforms in this direction. The likelihood of such ancillary adjustment strategies appears slim given the Canadian government's trend toward reduction of its fiscal commitments to agriculture. In the absence of national government initiatives to offset the provincial adjustment costs of redesigned supply management systems, the fate of Canada's national supply management systems rests disproportionately in the hands of industry stakeholders. And that fate, at least in chicken supply management, is by no means assured.


Notes
1.
This conclusion also applies to dairy supply management.
2.
The United States has officially protested Canada's January, 1995 implementation of tariffs on imports of dairy and poultry products, including

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