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| A very good answer. In a perfect world we could have a free market and farmers would all only produce what the markets needs, which would mean the prices remain reasonably profitable but not excessive. That’s far from how the real world works though.
In reality, both supply management and the open market have relatively similar costs to consumers.
In supply management, the cost is directly paid at the store. This makes it highly visible and thus it gives the illusion of being more expensive.
In the open market of the US, there is support through subsidies, which comes from tax dollars, which comes from the consumers. The true cost is hidden, so it appears a lot cheaper.
There likely is some difference in actual cost to the consumer but it is not as big of a difference as it appears to be.
Another factor that needs to be considered is inflation. It seems that the price of a lot of foods has increased substantially.
One issue with supply management is that it introduces what is basically the equivalent of what land is to a grain farmer. It has been said many times on here that it doesn’t matter how profitable grain farming (open markets) is the farmers will effectively bid themselves down to a tiny profit margin through land prices. The same thing has happened in supply management with quota. The price increased enough to reduce the profit margin.
Both systems have flaws and no one has found a perfect answer yet.
Edited by havin’funfarming 9/26/2020 08:13
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Is supply management sustainable?
