Here's a plan on how to own our industry

[nicolaas]

The biggest problem with the supply management system is that only the rich can enter the industry since dairys were allowed to include the quota as an asset..and activley buy/sell a 'worthless' piece of paper. The trend for the supply managed system in canada is towards fewer but bigger farms, as the big guys buy up the quota. Isn't this the same thing that is happening in the USA dairy industry without the quota? Not to mention the grain/beef farms in Canada? I think we have to focus on getting more money out of the existing system. THat is the only way to save the farm in the long run.....how to do that is the problem. I figure the government would love to get rid of supply management,a major trade irritant, but then they may be on the hook for billions for compensation for the now worthles quota.

[grassfarmer]

Quota cost needn't be a deterrant to new entrants - this post started of quoting $100 per share to buy in to the project that could be fixed as the cost of "quota" for eternity.
Seems to me the "free market economy" we have already is ensuring "only rich europeans and inherited farms could afford to be in the industry" - and oil money people.

[spudchucker]

Do you seriously think it would stay at $100 per head if there is a guaranteed margin? When the quota exchange system first started in my home province quota was about $1500/kg. It is now 30K .
If there was no quota system then I would at least have a chance in the business. With the quota system, it guarantees that I will never have a chance unless I have a million dollars burning a hole in my back pocket.

[grassfarmer]

Some of the latter quotas that were introduced in Europe had a fixed value at time of creation set by the regulaterly bodies and they worked fine. They only increase in value in an uncontrolled marketplace where high margins can be earned. I don't think that that would really apply to the project we are discussing here. If, like the dairy world, you could keep 40 cows on a quarter and make $50,000 a year then the "quota" would be worth bidding up.

[cswilson]

How would quota affect guys who run stocker cattle-develop breeding heifers-etc. I can see it just another means for the government trying to whittle everybody's peg to fit in their preordained hole-when you try and legislate it so nobody fails very few succeed. If the dairy industry is so rosy why are their dairies going under in their supply managed utopia. A quota system would be good for me because I'd get it grandfathered but for my kids-can't see that happening. There'd be more ways to inflate the price of it and hide it than you can shake a stick at.

[kpb]

A couple of thoughts on this. First of all, the plan could be flexible enough, surely, to accomodate stockers, backgrounders, bred heifer producers, etc.

Secondly, there is no denying that, from a purely financial point of view, the dairyman is the most successful farmer in the country. Now you can say that this or that dairyman has gone under but I think that is a mighty rare occurrence. Year in and year out it is the dairy industry that prospers and the small hog and beef guys that wither on the vine.

In regards to quota--I favor grassfarmer's suggestion of a fixed quota. But for sake of argument lets look at spud's objection of a high entry fee to the industry based on rising quota. If it costs $1.2 million to own a viable dairy operation, what do you think it costs to own a sometimes viable beef operation? I figure a commercial cow-calf operator running a herd that sells calves in the fall needs 300 cows. I'm not talking about guys who work off the farm (how many dairy guys need to do that?)--but rather a full-time cow-calf man. The cows will cost $300,000 and in just about anywhere in Alberta the land base to run these animals will be at least $1 million.

All of this to gain entry to the cow-calf industry--an industry with an uncertain future, at least for the small guy (and unless we do something 300 cows will look small in 10 years time) and an industry where the prices the producer gets are set by huge, monopolistic, multi-national corporations and generally provide a poor relative living. As opposed to an industry where the prices are set by the producers themselves. And we like our current system???

Finally, again, the plan is voluntary. If anyone likes the current system, then stay with it, don't join up, keep the government out of your operation. The export market will still exist, just like it does now and you'll get the same price for your cattle you get now.

kpb

[cowman]

A few things you might have missed kpb: A minimum stand alone dairy requires at least 100 cows(couple of Dutch dairy farmers have told me that)which means your quota is $3.5 million?(Again Dutch dairy farmers claim quota is 35K/cow)
Very unlikely you can buy the cows, barn, land, equipment for less than another $million?
I believe the mistake the government made was ever letting quota become real property? It should have always been allocated...until your farm quit milking cows and then it went to the next guy? The idea was supposed to be to manage supply...not as a get rich scheme?
It would appear, in the beef business, there is no end of optimists ready to plunk down their money for the opportunity to play cowboy? And a lot of them can afford to! This cow/calf business seems to have some sort of appeal, outside dollars and cents? Or sense? Almost like the horsey set?
The way I see it is let them go at it! If farmers can't make it pay...then probably no one can? But then they don't have to, right?

[spudchucker]

I realize that it is going to be expensive to get into any agricultural business. My problem with the dairy business is that most of that investment will be in a paper asset that can disappear with the stroke of a bigwigs signature on a trade deal at any moment.
At least with another agricultural enterprise, I will be borrowing for "hard" assets that I can see and touch and as opposed to a piece of paper.

[cswilson]

Thank God there's somewhere in the world besides Alberta to run cows in-1,300,000 would probably get a 5-700 cow unit over here in 'have not' Saskatchewan-we've run cows here for 90 years but I think a quota system would pretty much do it for me. Our industry needs alot less government not alot more-over here where we ranch without Ralph's largesse we've learned to live like that.

[coppertop]

cswilson, I don't quite understand your last comments about learning to live like that, do you mean less government in Sask.? I thought NDP was a nannystate type of government !!!

Actually, we in Alberta, will be living without Ralph fairly soon !!!

[cswilson]

Alberta is alot more socialist in their handouts to Agriculture than the NDP's ever were-hate to shattter the free enterprise Alberta loves to cultivate but your government cow milks on a few more teats than ours does. Would love to pay your land taxes about a third of what ours are here for comparable land-but it's all good-if it was too easy more people would move here lol.

[coppertop]

The province does NOT set the land taxes cwilson. Those taxes are set by individual municipalities, and they vary from one area of the province to the other depending entirely on the assessment of the municipalitiy.

Municipalities with lower assessment or that are carrying a large debt usually have a higher millrate. In most cases farmland and residential mill rate is significantly less than commercial/industrial.

I think that your NDP auto insurance is likely considerably less than Alberta, at least until this province took steps to get insurance rates under control.

I would appreciate it if you would list some of these Alberta subsidies, maybe I am not getting some of them, thats why I don't realize what they are !