Re:On the death of my family's dairy farm
by motohagiography on Tuesday March 12, 2019 @12:36PM
(#19369999)
The question I can't seem to find a consistent answer to is whether closing/limiting a market from imports/exports has the same net effect of supply management.
Supply management is for smoothing out volatility, but one major source of that volatility is exogenous demand from futures and far away competition.
Dairy economics worked fine when they were bound by geography. What broke the economics is industrial scale operations optimized for exporting from the region. The policy solution for that to keep farmers alive and dairy available would be to impose borders on the markets.
European (French) dairy subsidies are a variation on supply management, where instead of centralizing production, they close their borders to imports and redistribute general revenue as a way to maintain culture.
The consequence of supply management is that you can't just start a dairy farm in Canada with a few cows and some land. While that may seem trivial, distortions like this mean small towns are not economically viable because there is little local production that produces economic activity.
It makes dairy management a fundamental cultural problem. I would be interested in a sound comparison of the tradeoffs between supply management vs. borders/tarrifs to solve the same problem.
Supply management is for smoothing out volatility, but one major source of that volatility is exogenous demand from futures and far away competition.
Dairy economics worked fine when they were bound by geography. What broke the economics is industrial scale operations optimized for exporting from the region. The policy solution for that to keep farmers alive and dairy available would be to impose borders on the markets.
European (French) dairy subsidies are a variation on supply management, where instead of centralizing production, they close their borders to imports and redistribute general revenue as a way to maintain culture.
The consequence of supply management is that you can't just start a dairy farm in Canada with a few cows and some land. While that may seem trivial, distortions like this mean small towns are not economically viable because there is little local production that produces economic activity.
It makes dairy management a fundamental cultural problem. I would be interested in a sound comparison of the tradeoffs between supply management vs. borders/tarrifs to solve the same problem.