Dairy and poultry supply management in Canada

Canada's supply management (French: Gestion de l'offre), abbreviated SM, is a national agricultural policy framework used across the country, which controls the supply of dairy, poultry and eggs through production and import controls and pricing mechanisms. The supply management system was authorized by the 1972 Farm Products Agencies Act, which established the two national agencies that oversee the system. The Agriculture and Agri-Food Canada federal department is responsible for both the Canadian Dairy Commission and its analogue for eggs, chicken and turkey products, the Farm Products Council of Canada. Five national supply management organizations, the SM-5 Organizations — Egg Farmers of Canada (EFC), Turkey Farmers of Canada (TFC), Chicken Farmers of Canada (CFC), the Canadian Hatching Egg Producers (CHEP) and the Ottawa-based Canadian Dairy Commission (CDC), a Crown corporation — in collaboration with provincial and national governing agencies, organizations and committees, administer the supply management system.

In the dairy industry, the supply management system implements the federated provincial policy through the Canadian Milk Supply Management Committee (CMSMC), CDC, three regional milk pools — Newfoundland's, the five eastern provinces (P5) and the four western provinces — and provincial milk marketing boards. Since 1970, the CMSMC has set the yearly national industrial raw milk production quota or Market Sharing Quota (MSQ) and the MSQ share for each province to ensure Canada to match production with domestic need and to remain self-sufficient in milk fat. Each province allocates MSQs to individual dairy farmers. In 2017, there were 16,351 dairy, poultry and eggs farms under supply management.

While many federal and provincial politicians from major parties "have long maintained support for a supply-managed system for dairy, poultry and egg farmers", there has been ongoing debate about SM. Proponents of the framework tend to claim that it is designed to ensure that these farms can be profitable and Canadian consumers have access to a "high-quality, secure" supply of what they claim to be "sensitive products" at stable prices without shortages and surpluses. Opponents of the system tend to view it as an attempt by members of the supply managed industries to form a publicly supported "cartel" and profit at the expense of purchasers. Supply management's supporters say that the system offers stability for producers, processors, service providers and retailers.^: 2 The controls provided by supply management have allowed the federal and provincial governments to avoid subsidizing the sectors directly, in contrast to general practice in the European Union and the United States. Detractors have criticized tariff-rate import quotas, price-control and supply-control mechanisms used by provincial and national governing agencies, organizations and committees. Canada's trade partners posit that SM limits market access.^{: 18 : 2 : 18}

The Organisation for Economic Co-operation and Development (OECD) maintained in 2017 that Canada's "export growth would be boosted if Canada phased out its Canadian dairy supply management policies". Supply management was one of many issues in Comprehensive Economic and Trade Agreement (CETA), a free-trade agreement between Canada, the European Union and its member states^: 3 and Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) negotiations and the United States Mexico Canada Agreement (USMCA). Under the October 1, 2018, United States Mexico Canada Agreement, the supply management system remained fundamentally intact however some modifications to the milk class system have weakened supply management.