How the Agricultural Marketing Boards fix prices

Shopping recently we bought a 2-litre carton of lactose-free skim milk. It cost $5.89. I paid more than $5 for a pound of butter.

Comparing the price of four litres of milk to gasoline, milk costs $11.78 while the same amount of gasoline costs $5.16. Let’s try four litres of beer. Assuming a case of 24 costs $36, four litres costs about $11.50, slightly less than milk.

But then the breweries control the price of beer because they own the Beer Stores. In fairness, beer is heavily taxed. But then so is gasoline. But not dairy products.

Then, I checked the prices of cheese, and other milk derivitative products.  In the free-market economies, prices are lower as much as 50 to 75 per cent.

One comparison was milk–based products sold in the U.S. A similar sized carton of skim milk costs about $2.80. A pound of butter (unsalted) packaged in quarters, cost $2.58. Granted the market is 10 times that of Canadian markets and enjoys great economies of scale, but here we allow marketing boards to determine the price of product.

Basically, in Ontario and Quebec , the marketing boards own a supply management monopoly granted by Provincial governments. There is no consumer choice. It is the antithesis of our free market economy. It’s a system designed to protect the producer at the expense of the consumer.

This marketing system was established to prevent the importation of raw milk products into Ontario, even from other provinces. The free trade agreement, signed 23 years ago with the U.S., opened the door for the low-cost importation of milk products, but also chicken, beef and pork.

Imported U.S. frozen pizza’s have an advantage over Canadian fresh pizza producers who pay higher prices for their cheese made in Canada. That loses the intent of free markets and eschews free trade.

The powerful agricultural lobbies convinced the provincial government to set up specific marketing boards. This was to protect the producers of these products from the importation of lower priced foods.

Oh, they’ll claim that the system stabilizes prices and gives the producers a level of predictable income. It also insists on a measure of quality control, to protect consumers. But at what price?

No provincial political party will risk taking on the marketing boards because they fear losing the rural ridings in the province that, in 35 years, has consistently delivered rural ridings to the winning party.

Ironically, the Ontario growers of fruits and vegetables operate without a supply management system. Seems to work for them without a “big brother” marketing board controlling their marketing.

Consumers are paying a huge price to uphold the incomes of these vital food producers. It’s time for them to compete in the modern world of free markets.

All monopolies have the same weakness. They are basic food marketing dictators that prevent the consumer from making choices to lower their food costs.

These protections must stop. The cost to Ontario consumers of most of these products is obscene and unwarranted.

Wake up Ontario. It’s time to eliminate agricultural marketing boards and let competition dictate the prices of these basic food commodities.

Shopping recently we bought a 2-litre carton of lactose-free skim milk. It cost $5.89. I paid more than $5 for a pound of butter.

Comparing the price of four litres of milk to gasoline, milk costs $11.78 while the same amount of gasoline costs $5.16. Let’s try four litres of beer. Assuming a case of 24 costs $36, four litres costs about $11.50, slightly less than milk.

But then the breweries control the price of beer because they own the Beer Stores. In fairness, beer is heavily taxed. But then so is gasoline. But not dairy products.

Then, I checked the prices of cheese, and other milk derivitative products.  In the free-market economies, prices are lower as much as 50 to 75 per cent.

One comparison was milk–based products sold in the U.S. A similar sized carton of skim milk costs about $2.80. A pound of butter (unsalted) packaged in quarters, cost $2.58. Granted the market is 10 times that of Canadian markets and enjoys great economies of scale, but here we allow marketing boards to determine the price of product.

Basically, in Ontario and Quebec , the marketing boards own a supply management monopoly granted by Provincial governments. There is no consumer choice. It is the antithesis of our free market economy. It’s a system designed to protect the producer at the expense of the consumer.

This marketing system was established to prevent the importation of raw milk products into Ontario, even from other provinces. The free trade agreement, signed 23 years ago with the U.S., opened the door for the low-cost importation of milk products, but also chicken, beef and pork.

Imported U.S. frozen pizza’s have an advantage over Canadian fresh pizza producers who pay higher prices for their cheese made in Canada. That loses the intent of free markets and eschews free trade.

The powerful agricultural lobbies convinced the provincial government to set up specific marketing boards. This was to protect the producers of these products from the importation of lower priced foods.

Oh, they’ll claim that the system stabilizes prices and gives the producers a level of predictable income. It also insists on a measure of quality control, to protect consumers. But at what price?

No provincial political party will risk taking on the marketing boards because they fear losing the rural ridings in the province that, in 35 years, has consistently delivered rural ridings to the winning party.

Ironically, the Ontario growers of fruits and vegetables operate without a supply management system. Seems to work for them without a “big brother” marketing board controlling their marketing.

Consumers are paying a huge price to uphold the incomes of these vital food producers. It’s time for them to compete in the modern world of free markets.

All monopolies have the same weakness. They are basic food marketing dictators that prevent the consumer from making choices to lower their food costs.

These protections must stop. The cost to Ontario consumers of most of these products is obscene and unwarranted.

Wake up Ontario. It’s time to eliminate agricultural marketing boards and let competition dictate the prices of these basic food commodities.

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