H. G. Coffin, R. Saint-Louis, and K. A. Rosaasen
The regulatory systems used to govern supplies and influence prices in Canada's dairy and poultry sectors are examined in terms of their organizational and jurisdictional features. The conditions prevailing in these sectors prior to supply management are explored as factors contributing to the implementation of such a system. This chapter also outlines the implications for provincial cost/price relationships and opportunistic behavior under the price leveling and regulatory aspects of national marketing plans.
Extreme price variability and economic hardship in the dairy and poultry sectors during the 1960s, coupled with concerns about vertical integration and the possible loss of the poultry sector to import competition, prompted governments and producers in Canada to seek radical solutions such as national supply management. A solution recommended at the time by the Task Force on Agriculture, which consisted of four academics and an independent businessman, 2 was viewed as a kind of industrial strategy. The implementation of market-sharing agreements began with industrial milk in 1970 and has progressed through eggs in 1973, turkey in 1974, chicken in 1978 and broiler hatching eggs in 1986.
The system of supply management in these sectors is both unique and controversial, involving power-sharing arrangements between provincial and federal levels of government and with agricultural producers. The use of quotas to control production and imports 3 in order to stabilize producer prices has been criticized as costly to consumers and as an inefficient means of transferring income to farmers ( Arcus, 1981; Barichello, 1981; Josling, 1981; Veeman, 1982; Green, 1983). On the other