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Agriculture

Australia ignoring the solution to government-induced malaise

Published

1 year ago

7 minute read

Australian PM Chris Bowen

From the Frontier Centre for Public Policy

By Alan Moran

Conscious of the imperative of self-preservation, European governments and the EU Commission itself have already taken baby steps to dilute and delay carbon emission-abating and economy-crushing agricultural and energy policies.. Not so in Australia

Studying last month’s Davos meeting of the world’s (largely self-appointed) elites, Walter Russell Mead sees an inflection point.

He says that when they listened to Argentinian President Milei promoting free market capitalism, the Davosies’ applause was more than polite clapping. There was a sense that all was not well in the supposed government-planned China, and a recognition that the more hands-on EU governmental approach has resulted in Europe slipping behind the US with its lighter government touch over the economy. This was coupled with a concern that the farmer revolts around Europe reflected a sudden rejection of trust in the establishment. Above all, Ukraine has made the Euro grandees ‘uncomfortably aware of how dependent the global system is on the leadership that only a prosperous and self-confident America can provide’.

Conscious of the imperative of self-preservation, European governments and the EU Commission itself have already taken baby steps to dilute and delay carbon emission-abating and economy-crushing agricultural and energy policies.

Not so in Australia, where governments remain totally focused on reducing the economy’s productive potential.

The Albanese government, under the Svengali and serial ministerial failure of Chris Bowen, has turbocharged carbon abatement programs crippling energy. It has:

  • Vastly increased direct and regulatory-enforced expansion of the transmission lines in an attempt to allow wind and solar to work.
  • Introduced a requirement for the top 215 businesses to reduce their emission levels by 30 per cent over and above reductions made necessary by the subsidies generally.
  • Put in place measures to combat objections to intrusive wind farms and transmission lines.
  • Refused to introduce requirements for the rectification of land and safe disposal of the materials used in wind and solar facilities.
  • Vastly expanded the budgetary assistance to wind, solar, and hydrogen.
  • Introduced costly requirements on firms to identify the emissions of their own activities and of those of their suppliers and customers.

The measures have been put in place by politicians, hardly any of whom have any knowledge of the energy sector, how it works, and what its costs are. Politicians have been pressed in this direction by the so-called experts, a professional elite supported by and bankrolled by subsidy-seekers, who see the global warming con as a means by which they can get paid for promoting particular forms of energy.

But the outcome is already apparent in the loss of competitiveness of our industries. The bellwether is smelting and all three of the major aluminium smelters are now in hospital care, relying on government support to offset the imposts they incur from government penalties on cheap electricity. The distress is also seen in agricultural and mining industries, which in addition to being buffeted by ever-increasing environmental costs, with their prices set globally, are seeing their margins come under pressure.

Every week brings another measure – last week we saw requirements on car retailers to ensure more fuel-efficient – higher cost cars are sold with penalties on sellers that fail to meet these requirements, penalties that will certainly increase the price Australians pay for motor vehicles.

This week, Environment Minister Tanya Plibersek boasted of spending $205 million of taxpayers’ money to buy back another 44 gigalitres of water from Murray irrigators. This is part of a process to divert 2,700 gigalitres per annum (out of 7,000 gigalitres ‘high security’ water available) from productive agriculture to uses designated as ‘environmental’. These measures massively reduce the productivity of the Murray-Darling region, responsible for 35 per cent of the nation’s farm income. They were originally justified to respond to environmental agitators’ spurious claims that irrigation was creating salt infusions, claims that were reinforced during the ‘millennial’ drought of 1997-2008 by specious assertions that climate change would drastically reduce the available water. These original rationales having been disproven, politicians’ and activists’ hostility to productive enterprise have lent the programs an ongoing inertia.

We also saw a new $100 billion a year in additional carbon tax floated by Ross Garnaut and Rod Sims; their study’s funding source was not revealed but the beneficiaries would likely be, in my opinion, subsidy-seeking economy wreckers. While ostensibly rejecting that proposal, the Prime Minister has foreshadowed extensive new decarbonisation spending programs. Nothing is being learned from the collapse of Australia’s nickel mining industry, which cannot compete with overseas mines favoured by the low-cost coal-generated electricity that Australian governments are closing down.

In addition to the current $10 billion a year in subsidies through regulations forcing the use of wind and solar, and billions of dollars spent on revoking the productive use of irrigation water, governments provide huge sums to groups that promote such waste. Unlike squandering through inefficiency that is endemic in government programs, all this spending is aimed at poisoning once highly competitive low-cost industries. Adding to measures that load the dice against employers in workplace relations, it is akin to government forcing the nation to manufacture bombs to be dropped on the people financing them.

Has anybody put the solution more succinctly than Trump-aligned Presidential hopeful, Vivek Ramaswamy? His answer was, ‘Drill. Frack. Merit over “Diversity, Equity, and Inclusion”. Stop paying people to stay at home instead of work. Fire bureaucrats. Shut down corrupt agencies. End lobbying.’

Alan Moran is a noted economist who has analysed and written extensively from a free market perspective focusing on environmental issues, housing, network industries, and energy markets. First published here.

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Agriculture

Liberal win puts Canada’s farmers and food supply at risk

Published on May 1, 2025

By

This article supplied by Troy Media.

By Sylvain Charlebois 

A fourth Liberal term means higher carbon taxes and trade risks. Could Canada’s farmers and food security be on the line?

The Liberal Party, now led by Mark Carney, has secured a fourth consecutive term, albeit once again with a minority mandate. This time, however, the Liberals have a stronger hand, as they can rely not only on the NDP but also the Bloc Québécois to maintain power.

This broader base of parliamentary support could provide much-needed political stability at a crucial time, particularly as Canada prepares for a new round of trade negotiations with the United States and Mexico.

For the agri-food sector, the implications are significant. From carbon taxes to trade rules, federal decisions play a decisive role in shaping the costs and risks Canadian farmers face.

First and foremost, carbon pricing will remain a central issue. Carney has made it clear that the industrial carbon tax will stay—a policy that continues to erode the competitiveness of Canada’s agri-food sector, where fuel, fertilizer and transportation costs are especially sensitive to carbon pricing. The tax, currently set at $95 per metric tonne, is scheduled to climb to $170 by 2030.

While consumers may not see this tax directly, businesses certainly do. More concerning is the Liberals’ intention to introduce a border carbon adjustment for imports from countries without equivalent carbon pricing regimes. While this could theoretically protect Canadian industry, it also risks making food even more expensive for Canadian consumers, particularly if the U.S., our largest trading partner, remains uninterested in adopting similar carbon measures. Acting alone risks undermining both our food security and our global competitiveness.

Another looming issue is supply management. Although all parties pledged during the campaign not to alter Canada’s system for dairy, poultry and eggs, this framework—built on quotas and high import tariffs—is increasingly outdated. It is almost certain to come under pressure during trade negotiations. The American dairy lobby, in particular, will continue to demand greater access to Canadian markets. The Liberals have a chance to chart a more forward-looking path. Modernizing supply management could lead to a more competitive, resilient industry while providing consumers with greater choice and better prices.

The previous Parliament’s passage of Bill C-282, which sought to shield supply managed sectors from all future trade negotiations, was a deeply flawed move.

Fortunately, the new parliamentary makeup should make it far less likely that such protectionist legislation will survive. A more pragmatic approach to trade policy appears possible.

On the domestic front, there are reasons for cautious optimism. The Liberals have promised to eliminate remaining federal barriers to interprovincial trade and to improve labour mobility, longstanding obstacles to the efficient movement of agri-food products across Canada. For example, differing provincial rules often prevent products like cheese, meat or wine from being sold freely across provinces, frustrating farmers and limiting consumer choice. Momentum was building before the election, and it must continue if we are serious about building a stronger domestic food economy.

Infrastructure investment is another bright spot. The Liberals pledged more than $5 billion through a Trade Diversification Corridor Fund to upgrade Canada’s severely undercapitalized export infrastructure. Strategic investment in trade gateways is overdue and critical for agri-food exporters looking to reduce reliance on the United States and expand into global markets.

Finally, the Liberal platform was alone in explicitly committing to support food processing in Canada, a crucial pillar of domestic food security. An increased focus on manufacturing will not only create jobs but also reduce reliance on imported food products, making Canada more resilient in the face of global disruptions.

Farmers have long felt sidelined by urban-centric Liberal governments. The past four years were marked by regulatory and trade clashes that deepened that divide. The hope now is that with greater political stability and a clearer focus on  competitiveness, the next four years will bring a more constructive relationship between Ottawa and Canada’s agri-food sector.

If the Liberals are serious about food security and economic growth, now is the time to reset the relationship with Canada’s farmers, not ignore them yet again.

Dr. Sylvain Charlebois is a Canadian professor and researcher in food distribution and policy. He is senior director of the Agri-Food Analytics Lab at Dalhousie University and co-host of The Food Professor Podcast. He is frequently cited in the media for his insights on food prices, agricultural trends, and the global food supply chain.

Troy Media empowers Canadian community news outlets by providing independent, insightful analysis and commentary. Our mission is to support local media in helping Canadians stay informed and engaged by delivering reliable content that strengthens community connections and deepens understanding across the country.

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Agriculture

It’s time to end supply management

Published on March 23, 2025

By

From the Frontier Centre for Public Policy

By Ian Madsen

Ending Canada’s dairy supply management system would lower costs, boost exports, and create greater economic opportunities.

The Trump administration’s trade warfare is not all bad. Aside from spurring overdue interprovincial trade barrier elimination and the removal of obstacles to energy corridors, it has also spotlighted Canada’s dairy supply management system.

The existing marketing board structure is a major hindrance to Canada’s efforts to increase non-U.S. trade and improve its dismal productivity growth rate—crucial to reviving stagnant living standards. Ending it would lower consumer costs, make dairy farming more dynamic, innovative and export-oriented, and create opportunities for overseas trade deals.

Politicians sold supply management to Canadians to ensure affordable milk and dairy products for consumers without costing taxpayers anything—while avoiding unsightly dumping surplus milk or sudden price spikes. While the government has not paid dairy farmers directly, consumers have paid more at the supermarket than their U.S. neighbours for decades.

An October 2023 C.D. Howe Institute analysis showed that, over five years, the Canadian price for four litres of partly skimmed milk generally exceeded the U.S. price (converted to Canadian dollars) by more than a dollar, sometimes significantly more, and rarely less.

A 2014 study conducted by the University of Manitoba, published in 2015, found that lower-income households bore an extra burden of 2.3 per cent of their income above the estimated cost for free-market-determined dairy and poultry products (i.e., vs. non-supply management), amounting to $339 in 2014 dollars ($435 in current dollars). Higher-income households paid an additional 0.5 per cent of their income, or $554 annually in 2014 dollars ($712 today).

One of the pillars of the current system is production control, enforced by production quotas for every dairy farm. These quotas only gradually rise annually, despite abundant production capacity. As a result, millions of litres of milk are dumped in some years, according to a 2022 article by the Montreal Economic Institute.

Beyond production control, minimum price enforcement further entrenches inefficiency. Prices are set based on estimated production costs rather than market forces, keeping consumer costs high and limiting competition.

Import restrictions are the final pillar. They ensure foreign producers do not undercut domestic ones. Jaime Castaneda, executive vice-president of the U.S. National Milk Producers Federation, complained that the official 2.86 per cent non-tariffed Canadian import limit was not reached due to non-tariff barriers. Canadian tariffs of over 250 per cent apply to imports exceeding quotas from the European Union, the Comprehensive and Progressive Agreement for Trans-Pacific Partnership, and the Canada-United States-Mexico Agreement (CUSMA, or USMCA).

Dairy import protection obstructs efforts to reach more trade deals. Defending this system forces Canada to extend protection to foreign partners’ favoured industries. Affected sectors include several where Canada is competitive, such as machinery and devices, chemicals and plastics, and pharmaceuticals and medical products. This impedes efforts to increase non-U.S. exports of goods and services. Diverse and growing overseas exports are essential to reducing vulnerability to hostile U.S. trade policy.

It may require paying dairy farmers several billion dollars to transition from supply management—though this cartel-determined “market” value is dubious, as the current inflation-adjusted book value is much lower—but the cost to consumers and the economy is greater. New Zealand successfully evolved from a similar import-protected dairy industry into a vast global exporter. Canada must transform to excel. The current system limits Canada’s freedom to find greener pastures.

Ian Madsen is the Senior Policy Analyst at the Frontier Centre for Public Policy.

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