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Agriculture

It’s time to end supply management

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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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Agriculture

Federal cabinet calls for Canadian bank used primarily by white farmers to be more diverse

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From LifeSiteNews

By Anthony Murdoch

A finance department review suggested women, youth, Indigenous, LGBTQ, Black and racialized entrepreneurs are underserved by Farm Credit Canada.

The Cabinet of Prime Minister Mark Carney said in a note that a Canadian Crown bank mostly used by farmers is too “white” and not diverse enough in its lending to “traditionally underrepresented groups” such as LGBT minorities.

Farm Credit Canada Regina, in Saskatchewan, is used by thousands of farmers, yet federal cabinet overseers claim its loan portfolio needs greater diversity.

The finance department note, which aims to make amendments to the Farm Credit Canada Act, claims that agriculture is “predominantly older white men.”

Proposed changes to the Act mean the government will mandate “regular legislative reviews to ensure alignment with the needs of the agriculture and agri-food sector.”

“Farm operators are predominantly older white men and farm families tend to have higher average incomes compared to all Canadians,” the note reads.

“Traditionally underrepresented groups such as women, youth, Indigenous, LGBTQ, and Black and racialized entrepreneurs may particularly benefit from regular legislative reviews to better enable Farm Credit Canada to align its activities with their specific needs.”

The text includes no legal amendment, and the finance department did not say why it was brought forward or who asked for the changes.

Canadian census data shows that there are only 590,710 farmers and their families, a number that keeps going down. The average farmer is a 55-year-old male and predominantly Christian, either Catholic or from the United Church.

Data shows that 6.9 percent of farmers are immigrants, with about 3.7 percent being “from racialized groups.”

Historically, most farmers in Canada are multi-generational descendants of Christian/Catholic Europeans who came to Canada in the mid to late 1800s, mainly from the United Kingdom, Ireland, Ukraine, Russia, Italy, Poland, the Netherlands, Germany, and France.

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Agriculture

Farmers Take The Hit While Biofuel Companies Cash In

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From the Frontier Centre for Public Policy

By Joseph Fournier

Canada’s emissions policy rewards biofuels but punishes the people who grow our food

In the global rush to decarbonize, agriculture faces a contradictory narrative: livestock emissions are condemned as climate threats, while the same crops turned into biofuels are praised as green solutions argues senior fellow Dr. Joseph Fournier. This double standard ignores the natural carbon cycle and the fossil-fuel foundations of modern farming, penalizing food producers while rewarding biofuel makers through skewed carbon accounting and misguided policy incentives.

In the rush to decarbonize our world, agriculture finds itself caught in a bizarre contradiction.

Policymakers and environmental advocates decry methane and carbon dioxide emissions from livestock digestion, respiration and manure decay, labelling them urgent climate threats. Yet they celebrate the same corn and canola crops when diverted to ethanol and biodiesel as heroic offsets against fossil fuels.

Biofuels are good, but food is bad.

This double standard isn’t just inconsistent—it backfires. It ignores the full life cycle of the agricultural sector’s methane and carbon dioxide emissions and the historical reality that modern farming’s productivity owes its existence to hydrocarbons. It’s time to confront these hypocrisies head-on, or we risk chasing illusory credits while penalizing the very system that feeds us.

Let’s take Canada as an example.

It’s estimated that our agriculture sector emits 69 megatonnes (Mt) of carbon dioxide equivalent (CO2e) annually, or 10 per cent of national totals. Around 35 Mt comes from livestock digestion and respiration, including methane produced during digestion and carbon dioxide released through breathing. Manure composting adds another 12 Mt through methane and nitrous oxide.

Even crop residue decomposition is counted in emissions estimates.

Animal digestion and respiration, including burping and flatulence, and the composting of their waste are treated as industrial-scale pollutants.

These aren’t fossil emissions—they’re part of the natural carbon cycle, where last year’s stover or straw returns to the atmosphere after feeding soil life. Yet under United Nations Intergovernmental Panel on Climate Change (IPCC) guidelines adopted by Canada, they’re lumped into “agricultural sources,” making farmers look like climate offenders for doing their job.

Ironically, only 21 per cent—about 14 Mt—of the sector’s emissions come from actual fossil fuel use on the farm.

This inconsistency becomes even more apparent in the case of biofuels.

Feed the corn to cows, and its digestive gases count as a planetary liability. Turn it into ethanol, and suddenly it’s an offset.

Canada’s Clean Fuel Regulations (CFR) mandate a 15 per cent CO2e intensity drop by 2030 using biofuels. In this program, biofuel producers earn offset credits per litre, which become a major part of their revenue, alongside fuel sales.

Critics argue the CFR is essentially a second carbon tax, expected to add up to 17 cents per litre at the pump by 2030, with no consumer rebate this time.

But here’s the rub: crop residue emits carbon dioxide, methane and nitrous oxide whether the grain goes to fuel or food.

Diverting crops to biofuels doesn’t erase these emissions: it just shifts the accounting, rewarding biofuel producers with credits while farmers and ranchers take the emissions hit.

These aren’t theoretical concerns: they’re baked into policy.

If ethanol and biodiesel truly offset emissions, why penalize the same crops when used to feed livestock?

And why penalize farmers for crop residue decomposition while ignoring the emissions from rotting leaves, trees and grass in nature?

This contradiction stems from flawed assumptions and bad math.

Fossil fuels are often blamed, while the agricultural sector’s natural carbon loop is treated like a threat. Policy seems more interested in pinning blame than in understanding how food systems actually work.

This disconnect isn’t new—it’s embedded in the history of agriculture.

Since the Industrial Revolution, mechanization and hydrocarbons have driven abundance. The seed drill and reaper slashed labour needs. Tractors replaced horses, boosting output and reducing the workforce.

Yields exploded with synthetic fertilizers produced from methane and other hydrocarbons.

For every farm worker replaced, a barrel of oil stepped in.

A single modern tractor holds the energy equivalent of 50 to 100 barrels of oil, powering ploughing, planting and harvesting that once relied on sweat and oxen.

We’ve traded human labour for hydrocarbons, feeding billions in the process.

Biofuel offsets claim to reduce this dependence. But by subsidizing crop diversion, they deepen it; more corn for ethanol means more diesel for tractors.

It’s a policy trap: vilify farmers to fund green incentives, all while ignoring the fact that oil props up the table we eat from.

Policymakers must scrap the double standards, adopt full-cycle biogenic accounting, and invest in truly regenerative technologies or lift the emissions burden off farmers entirely.

Dr. Joseph Fournier is a senior fellow at the Frontier Centre for Public Policy. An accomplished scientist and former energy executive, he holds graduate training in chemical physics and has written more than 100 articles on energy, environment and climate science.

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