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| ▲ | hylaride 14 hours ago | parent [-] | | > It's essentially the same system No it's not. For bulk commodities, the US subsidies are largely commodity-specific and acre-based; Canadian support is whole-farm and income-based. US subsidies trigger when income margins fall below a set percentage; an Iowa farmer with base acres gets a price loss coverage payment whenever the national corn price is low, good year or not. A Canadian prairie farmer with a good year gets nothing regardless of wheat prices. In the US, most of the money goes to row-crop growers on large acreages, increasingly through discretionary ad hoc payments. In Canada, most money goes to prairie grain and oilseed farms through yield-triggered insurance. If you excluded dairy, US subsidies account for about ~9% of farm receipts (plus or minus a quarter percent depending on year) and Canada ~5% (long term average; payouts tend to spike in bad years). Swinging to dairy, the US actually sets price floors for wholesale dairy and transfers revenue across processed dairy types. The US system also pays out directly to farmers if margins fall too much (the calculations of said margins is complicated, but it essentially encourages production even if prices fall due to oversupply). These subsidies have historically encouraged overproduction and consolidation and the issue has become acute as the rates of dairy consumption hasn't matched population growth due to a variety of reasons (eg veganism, milk alternatives, etc). One reason Trump has been complaining is because the US would love to have somewhere to dump said surplus. The Canadian dairy system (which I want to make abundantly clear I'm not defending!), basically links pricing against a hard quota. The result is higher prices for consumers, and tariffs that make unique foreign cheeses very expensive. > Neither is milk from other animals (e.g. goats), other types of meats (e.g. pork, beef), but none of these have the same system. Moreover, until 2009 tobacco was also supply managed under the same system and it is a bulk commodity that is shipped around the world. So I'm not sure your theory, as fun as it is, holds. > ... this doesn't explain what is special about the three (once four) agriculture categories. Because it's political! Tobacco farmers used to be a force to be reckoned with, but when smoking rates plummeted they lost a lot of said power. Other forms of dairy were niche enough not to matter. Bulk meat (beef, pork, etc) are a relatively recent phenomenon and were part of a world trade market by then, whereas chicken, milk, and eggs were considered a staple. If you're a Canadian dairy farmer, the US system looks like it encourages production above all else and the subsidies are structured enough where a large one-off issue (herd sickness, serious equipment breakdown, etc) will wipe you out. The number of US dairy farms is down almost 80% since the 1990s and it's been driven by low margins. Canadian farmers have a lot more of a direct influence on their government (again for better or for worse). This is what I meant when I said "Creating a fair and level trading system around it is difficult" because you run up against these interests. I would much prefer a theoretical fair trade system where Canada didn't protect its poultry/dairy and the US didn't protect its sugar (which has a lot of similarities to CA dairy supply management, though the foreign import limits are proportionately less). | | |
| ▲ | win311fwg 12 hours ago | parent [-] | | > For bulk commodities, the US subsidies are largely commodity-specific and acre-based Again, the largest component is crop insurance, which is modelled essentially the same as it is in Canada. ~60% of the premium is paid for by the government in both cases. The payout is dependent upon acres. > The number of US dairy farms is down almost 80% since the 1990s And 74% in Canada, for what it is worth. > If you're a Canadian dairy farmer Not anymore. I am among the 74%. The double-edged sword with the stability offered by supply management is that it makes borrowing much easier (effectively government-guaranteed cashflow), which pushes the price of everything higher, so the economics aren't all that great unless you sold your $100,000 per acre farm in the Netherlands or Germany to pay for it. > the US system looks like it encourages production above all else I am not sure I would say that. Co-ops with quota-like systems are not uncommon in the US. What their system does allow is that one guy who thinks he can undercut the prevailing market to slide in, while Canada has a legal path to put a halt to such behaviour. Maybe that's something favourable, but why only in dairy, poultry, and eggs? Isn't that something that every market would want? > Canadian farmers have a lot more of a direct influence on their government I do remain a Canadian farmer, though, so I would love for you to expand upon that thought. > Because it's political! This is quite a deviation from the bulk commodity/farming practice explanation before. Why the change in tune? | | |
| ▲ | hylaride 10 hours ago | parent [-] | | > Again, the largest component is crop insurance, which is modelled essentially the same as it is in Canada. ~60% of the premium is paid for by the government in both cases. The payout is dependent upon acres. Only if you look at it from a permanent funding point of view. The US gov'ts portion of crop insurance in the USA amounted to $14B in 2026, but ad hoc/disaster spending (which is separate from insurance) is $26B and an alphabet soup of Farm Bill programs is $15.6B. And the bulk of the farm bill's spending (70-80%) is indirect via SNAP and other programs that Canada doesn't really have (though measuring how much if this is an actual farming subsidy is very difficult). > And 74% in Canada, for what it is worth. I was basing my statement on numbers I saw off of American stats (which go back further easily obtainable data), but the Canadian/US numbers I can directly pull up comparisons are from 2018 to 2025 (raw statistics Canada data is hard to come by, something the USA does much better on): Canada: 10,679 → 9,048 = −15.3% USA: 37,468 → 23,609 = −37.0% The exit experience is different, though. A CA dairy farmer leaves with a capital asset in their quotas as well as any land/equipment/herd value. A US dairy farmer is liquidating just the latter. Anecdotally, I grew up in Winchester, Ontario which is a dairy hub - a lot of the farming kids I grew up with didn't want to get into farming and a lot of the family farms were sold off and a lot of them are quite comfortable. A lot of farms closer to Ottawa also got gobbled up by suburbs. > I am not sure I would say that. Co-ops with quota-like systems are not uncommon in the US. What their system does allow is that one guy who thinks he can undercut the prevailing market to slide in, while Canada has a legal path to put a halt to such behaviour. Maybe that's something favourable, but why only in dairy, poultry, and eggs? Isn't that something that every market would want? Again, I'm not defending supply management, but the dairy farmers are holding onto it and it's been a major pain in almost all of Canada's trade agreements. The fact that Canadian politicians are fighting so hard for it isn't because it's a better system. The one advantage of the Canadian system is that it costs the government little and you don't really contribute to it if you don't consume milk, though. But I'm for free trade and fewer subsidies all around. > I do remain a Canadian farmer, though, so I would love for you to expand upon that thought. Dairy farmers have put enough pressure on politicians across the political spectrum that they vigorously defend supply management that, due to its inflexibility, is a major trade headache for Canada from an industry that makes up a very small portion of economic output in Canada; it almost cost us the USMCA renegotiations and caused the CETA negotiations to last much, much longer than necessary. Awhile back, the nominally free market federal Conservatives forced CN and CP to have minimal grain shipment numbers to deal with a bumper crop because the farmers were fuming at higher freight rail prices against other commodities (mainly oil at the time). > This is quite a deviation from the bulk commodity/farming practice explanation before. Why the change in tune? I don't see it as a change in tune. My original comment was that "Agriculture is always the hardest due to a variety of factors, including standards, but also farming is among the most subsidized and/or protected businesses in the developed world. Creating a fair and level trading system around it is difficult." Agriculture made up ~90% of the economy when most modern countries were founded and the political weight is often historical (and arguably constitutionally baked-in in the USA which gives smaller predominately rural states equal numbers of Senators, of which in the USA are very powerful). It's been an American political joke for ages that kissing babies is less important than kissing corn during the primaries that started in Iowa. Also, the Canadian farmers were very upset at the very limited expanded access USMCA provided us dairy farmers. The US unequivocally supports corn production, which feeds (pun not intended) into cheaper feed for livestock. But these subsidies can be labelled as "strategic" energy independence (ignoring if that's actually the case or not). Is that fair? Should Canada then have to encourage corn production the same way? How would/do you untangle this? It's a political problem. Untangling these into a fair trade (in the free sense) would require political capital that some countries or parties may or may not have. I'll finish that I think we broadly agree on how things SHOULD be, but I see the barriers to getting there as not politically feasible. If it was, supply management would already be gone. It causes higher prices and the benefits are highly marginal. | | |
| ▲ | win311fwg 9 hours ago | parent [-] | | > Dairy farmers have put enough pressure on politicians across the political spectrum How? I do remember the big protests in the 90s quite well, certainly, but that was 30-some-odd years ago and when, as we saw earlier, there were 300% more diary farmers. Pressure doesn't last forever, especially as you grow into insignificance. From what I see the pressure comes from the general public, mostly from having built up this idea that supply management keeps "hormone laden" milk out of the market, combined with the people of Quebec seeing any kind of federal "meddling" as an attack on their people. When longstanding party favourite Maxime Bernier ran for leader of the CPC, the as you say the nominally free market party, on the platform of eliminating supply management it wasn't just dairy farmers who laughed him out of the room. It was everyone. Same thing happened with the early PPC party, before eventually pandering to the crazies to try and find any kind of support. It was quite clearly non-farmers who wanted no part in seeing an end to supply management. > because the farmers were fuming at higher freight rail prices against other commodities Words are only worth so much, granted, but when this occurred it was framed as being necessary for the sake of the entire Canadian economy and to preserve Canada's reputation as a trustworthy supplier. The message sent was abundantly clear that it wasn't being done to appease farmers. How do you translate that into farmers having political sway? | | |
| ▲ | hylaride 6 hours ago | parent [-] | | > How? I do remember the big protests in the 90s quite well, certainly, but that was 30-some-odd years ago and when, as we saw earlier, there were 300% more diary farmers. Pressure doesn't last forever, especially as you grow into insignificance. They have an organized lobby that straddles a lot of important ridings in eastern Ontario and parts of Quebec. It also includes a lot of the broader dairy industry. I could accept the argument that it is no longer as powerful as it once was, but I haven't met many non-industry people who care either way. All being equal, Canadians would prefer lower prices, I think. I don't think the general public would have cared, especially if Europe flooded us with cheaper gouda or brie. There has always been a dose of anti-americanism that bounces from healthy to unhealthy and back depending on the geopolitical climate, though. > when this occurred it was framed as being necessary for the sake of the entire Canadian economy and to preserve Canada's reputation as a trustworthy supplier. The message sent was abundantly clear that it wasn't being done to appease farmers. How do you translate that into farmers having political sway? CN and CP were already moving records amount of grain that year (IIRC almost 40% above previous records), so to argue that it put Canada's reputation at risk rings hollow. It was because farmers were getting squeezed storing it as well as paying for higher freight costs, on top of the fact that many grain companies and farmers held onto grain from the previous harvest for a variety of reasons. Many grain farmers, who used to have to sell their wheat to the wheat board, got caught flat footed when trying to go out on their own due to then recent deregulation (I'm not convinced this last argument effected things as much as some claim, though). |
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