Colby Cosh: Canada's dairy cartel, the unkillable sacred cow made of other, literal cows

Does our dairy supply management serve as a useful reminder of what awaits us if we turn back to quotas and protectionism in our other industries? Our pathetic cheese sections may induce despair, but imagine the whole grocery like that, and every other store too.

Canadians still seek Chobani yogurt out on cross-border trips after it was banned in Canada.

Married friend of mine comes home from a fancy American vacation. Did you all have a nice time, I ask. She had a nice time, husband had a nice time … and her four-year-old had the time of her life. The kid discovered Chobani brand Greek-style yogurt, you see. She is being raised mostly without the conveyor belt of candy our generation lived at one end of, so she gets excited by that kind of thing. They had Chobani at the resort and having a cup of it became the highlight of her day.

The mom’s a grazer of newspapers, a weekend-reader type. She probably won’t even see this column unless I bring it to her attention. So she gets home from vacation, wonders about the local availability of Chobani, starts Googling, and … well, if you read the Financial Post religiously every day, you know where the story goes. You remember how Chobani, a hipster yogurt business based in New York state, got a temporary permit to sell the product in Ontario and won over customers. You know how it tried to meet our supply-managed dairy system halfway by making plans for a factory in Kingston. You know how milk processors waged berserker war in court to prevent the permit from being renewed, and closed ranks to deny the company a supply of Canadian milk.

And, most of all, you know how the product disappeared from our shelves, how Canadians still seek it out on cross-border trips, and how slow and confused the dairy cartel was about meeting the new demand for extra-heavy yogurt. None of this is going to be too easy to explain to a four-year-old.



It is not the thought of a four-year-old being deprived of trendy yogurt that bothers me: it is the overarching “Why?” Why do we tolerate this one old-fashioned protected oligopoly? Why, when existing dairy marketers pleaded explicitly in court that Chobani would “destroy the delicate balance” of the supply-managed milk business, did consumers not riot?

It is the logical oddity as much as anything that gets to me. Most of the rest of us go to work in a globalized, competitive world of less tightly organized labour and quicker career transitions, with robots, computers, Google, and armies of foreign workers breathing down all our necks to some degree. Even grain farmers and cattlemen live in this world. Dairymen, alone, reserve the right to use the power of the state to say “We’ll pass,” and drift onward as their fathers did. And we let ’em!

Well, you all know the real reason: supply management froze the world of Canadian dairying at a perfect moment for Quebec, and so the system has become a sacred cow made of other, literal cows. Because economists and intellectuals know that supply management is a transfer of wealth from consumers of all classes to a few thousand affluent farmers, the beneficiaries reinvest a great deal of the profit in hapless, defensive public-relations efforts that only tend to make us loathe them more.


They have even found a political champion in Steven Blaney, the cadaverous oddball from the Eastern Townships who is in the Conservative leadership race to play milk spoiler to fellow Quebecer Maxime Bernier. Bernier wants to retire supply management by buying farmers out of their quotas with a national tax on dairy, lasting for a fixed period.

This is a generous approach to free trade in dairy: it is a buyout of unearned entitlements. Producers who want to leave the industry would do so with an enormous grubstake — the kind of which workers laid off from regular jobs can only dream. Those who hang in there would get to keep something like the present value of their annulled production quotas as they face new careers in an honest-to-God marketplace (which is what some of them very much wish to do).

One alternative approach would be to end supply management instantly with no buyout, leaving the farmers with nothing — nothing but their beasts, their equipment, and their staggeringly valuable farmland. Because Bernier proposes to be kinder than this to bloodsucking oligopolists, Blaney heckles him for advocating a tax and thereby being a bad Conservative.

“There is nothing good in what Maxime is proposing — nothing,” he recently told the Huffington Post’s Althia Raj, belabouring her with dairy-industry propaganda over breakfast at the Chateau Laurier. (Her sketch of the encounter is remarkable, and slightly frightening.) His own figure for the Bernier buyout, the imagined parting gift from the state to its dairyman clientele, is $30 billion. If such a sum can be described as a “nothing,” what word would Blaney use if it were zero?

National Post 

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