E. van Duren and K. D. Meilke
Niche strategies, or the addition of value to traditional raw agricultural products, have often been suggested as an alternative for increasing the profitability of Canada's supply-managed industries. This strategy is appealing because the producer prices of chicken, turkey, eggs and dairy products are higher in Canada than in United States. This largely precludes the use of a low-cost marketing strategy to increase profits. The feasibility of using niche strategies in supply-managed industries will be determined by general economic and demographic conditions, lifefestyle considerations, the trade environment and marketing arrangements. All Canadian food firms face the prospect of selling their products into a slowly growing domestic economy consisting of older, better-educated and smaller households. As a result of multilateral and regional trade agreements, however, these firms have the opportunity to expand sales beyond Canada. Because of higher raw product prices and limited international marketing experience, Canada's supply-managed industries should spend the next several years preparing for increased competition. To the extent that niche strategies can be helpful, they are best pursued through strategic alliances or joint ventures between Canadian firms and multinational organizations.
An increase in the value of Canada's raw agricultural products has been suggested as a palatable option for dealing with many of the challenges facing the Canadian agrifood sector. One challenge is determining how the supply-managed industries should respond to the General Agreement on Tariffs and Trade (GATT). However, as a strategic direction for the supply-managed industries, the value added option has evolved with a