M. M. Veeman and L. M. Arthur
This chapter is concerned with observations and conclusions based on the authors' representation of consumers' interests on the national dairy and poultry task forces. Part of a broad policy review for agriculture and food, these bodies and the subsequent Deputy Ministers' Supply Management Steering Committee sought consensus of major stakeholders on changes to improve the costs, inflexibilities and lack of transparency of Canada's national supply management programs. In contrast to naive public interest theories of regulation, as in hypotheses that supply management has enabled producers to offset the market power of processors and distributors, the operations of these programs involve many areas of joint interests and benefits to producers, processors, wholesalers and importers of supply-managed products at the expense of Canadian consumers. Many of the major problems identified in the task force process have persisted, a situation that reflects the political influence of the supply-side interests in the current supply management system.
The general economic criticism of supply management is based less on the observation that it transfers large sums of money from consumers to producers than on the assessment that these transfers are inefficiently transacted ( Barichello, 1983; Beck, Hoskins and Mumey, 1994; Schmitz and Schmitz, 1994; Veeman, 1982). Indeed, the Royal Commission on the Economic Union and Development Prospects for Canada ( 1985) concluded that for each dollar transferred from consumers to producers, about 25 cents is wasted through efficiency losses. Since their inception, Canadian supply management programs have made little progress in recognition of and action on consumers' concerns regarding regulated marketing.