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Options for Supply Management in Canada with Trade Liberalization

Author

Listed:
  • Barichello, Richard R.
  • Cranfield, John A.L.
  • Meilke, Karl D.

Abstract

Following the Uruguay Round of trade negotiations Canada replaced its import quotas on sensitive products with tariff rate quotas. The over-quota tariffs on those products operating under domestic supply management schemes (dairy and poultry products) ranged from a low of 155 percent on turkey to a high of 299 percent on butter. These tariffs have effectively blocked over quota imports and are likely to continue to prevent imports, under most market conditions, given the likely range of tariff cuts proposed for sensitive products following a successful completion of the Doha Round. However, it’s argued that tariff cuts in the post-Doha Round will severely limit Canada’s ability to restrict imports and it is important to use the next 15 years to better position the supply managed industries to compete at that time. The paper reviews a number of reform options that could be pursued ranging from a full buy-out of current marketing quotas, the introduction of two types of marketing quota, to providing partial compensation of short-term income losses. The advantages and disadvantages of each option are discussed with respect to their costs and impacts on income and asset values.

Suggested Citation

  • Barichello, Richard R. & Cranfield, John A.L. & Meilke, Karl D., 2007. "Options for Supply Management in Canada with Trade Liberalization," Commissioned Papers 6124, Canadian Agricultural Trade Policy Research Network.
  • Handle: RePEc:ags:catpcp:6124
    DOI: 10.22004/ag.econ.6124
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    References listed on IDEAS

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    Cited by:

    1. G. Cornelis van Kooten, 2017. "The Welfare Economics of Dismantling Dairy Quota in a Confederation of States," Working Papers 2017-04, University of Victoria, Department of Economics, Resource Economics and Policy Analysis Research Group.
    2. Richard J Vyn & James Rude, 2020. "The Influence of Supply Management on Farmland Values in Ontario," Applied Economic Perspectives and Policy, John Wiley & Sons, vol. 42(4), pages 815-834, December.
    3. Brennan A. McLachlan & G. Cornelis van Kooten, 2022. "Reforming Canada's dairy supply management scheme and the consequences for international trade," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 70(1), pages 21-39, March.
    4. Alex W. Chernoff, 2015. "Between a cap and a higher price: Modelling the price of dairy quotas under price ceiling legislation," Canadian Journal of Economics, Canadian Economics Association, vol. 48(4), pages 1403-1429, November.
    5. Kerr, William A., 2012. "The EU-Canada Free Trade Agreement: What is on the Table for Agriculture?," 86th Annual Conference, April 16-18, 2012, Warwick University, Coventry, UK 135067, Agricultural Economics Society.
    6. Colin A. Carter & Pierre Mérel, 2016. "Hidden costs of supply management in a small market," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 49(2), pages 555-588, May.
    7. William B.P. Robson & Colin Busby, 2010. "Freeing up Food: The Ongoing Cost, and Potential Reform, of Supply Management," C.D. Howe Institute Backgrounder, C.D. Howe Institute, issue 128, April.
    8. Colin Busby & Daniel Schwanen, 2013. "Putting the Market Back in Dairy Marketing," C.D. Howe Institute Commentary, C.D. Howe Institute, issue 374, March.
    9. G. Cornelis van Kooten, 2020. "Reforming Canada's Dairy Sector: USMCA and the Issue of Compensation," Applied Economic Perspectives and Policy, John Wiley & Sons, vol. 42(3), pages 542-558, September.
    10. Meilke, Karl D. & Cairns, Alexander P., 2011. "An Evaluation of Milk Quota Exchange Policies," Trade Policy Briefs 102303, Canadian Agricultural Trade Policy Research Network.

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