Agricultural Policy Framework Site

[parsley]

rodbradshaw,


You say, " they control the supply" . No they don't. Last I heard there are other tractors out there manufactured and sold by Massey, Ford etc. Sold into every province and state, sold in all countries of the world, as many as the company wants to manufacture and market.

Then you say, " you also can start milking cows tomorrow without quota and without going to jail. " If I were to buy 200 dairy cows tommorow and milk them, what can I do with the milk and where can I market the milk?

parsley

[dalek]

Parsley you get a license and get on the export contract market where you sell your milk to processors to export on the world market. Then you can compete with the only other farmers in the world currently playing on the world market, mainly New Zealand and Australia at some times of the year, and I think maybe Poland. Other than those countries there IS no world market, everybody else has some form of supply management, tariff protection or subsidy. BTW export contract prices now are about half of the US milk price.

[parsley]

Just so we can put this together in simple terms, would you agree there are two operating systems for trade and commerce:

1. Would it be fair to say John Deere competes for business (they manufacture, they market). and they do it without coercion and jailing laws?

2. Would it be fair to say that the dairy industry uses coercion and jailing laws because as dalek states, "Other than those countries there IS no world market, everybody else has some form of supply management, tariff protection or subsidy ( those laws all have built in penalties)?

parsley

[rodbradshaw]

Tom4cwb

If they are late entrants into the business, quota costs are probably dragging them down. If they have been in the business along time they probably misjudged the vagaries of the market as production is adjusted to keep supply in check.
Supply chain integration is important for producers to try and get a larger chunk of the final selling price no matter whether it is supply managed or competing in the open market.

Governments are getting increasingly out of touch with the agriculture community. We don't have the bucks to buy support (other than Quebec) to get the time and consideration we are due.

Parsley
Last time I checked Massey was part of AGCO and Ford was part of CNH. If they don't control supply, why have they closed dealerships, shut factories and bought out competition. Yes you can start manufacturing tractors but you better have deep pockets as it is not an even playing field out there unless your going to make every part yourself. It will be interesting to see how long or for that matter how many tractors that Buhler or McCormick sell. It may not be legislated but if they don't practice supply management, how come prices for tractors have increased 4.5 times in the last 30 years and barley is floundering in the same range it did 30 years ago. I know that we can't blame it all on the CWB. We have increased production and reduced variable costs and we still are not making money. What we need to due is limit supply. Maybe Ken Goudy and his "Focus on Sabbatical" is on the right track. It will never work though as I will let my neighbour cut back and I'll plant wall to wall to capture the increase.

Finally you asked if there are two systems. One where John Deere manufactures and markets. The second where Dairy and the feather industry control supply and set price because of Cost of Production Formula's. I would say that the first one is the Canadian Grain Farmer who produces as much as physically possible and then says what will you give me for it. Remember it is the %of unsold that dictates the price of what gets sold, not what the value of the product is worth.
I am not a great supporter of the present Supply Management System but I think that there is a lesson that we can learn from them. If we continue to produce all that we can produce and there is surplus to what is needed we are goiung to be subjected to low prices. It's a no brainer. Quota systems will never work in grains and I wouldn't advocate that we try to make one. Ther is an old adage, The cure for low prices is low prices. How low do they have to go before people quit producing grains.