dairy industry operates within a supply management system, whereby
the supply of raw milk from dairy farmers is controlled in order to
match the domestic market needs of dairy processors. The system was
introduced in the early 1970's and is applicable to industrial milk
only (i.e. milk used in the manufacture of yogourt, ice cream, cheeses,
butter, powders). Each dairy farmer in Canada has a production quota
(Market Sharing Quota) that has been established through the National
Milk Marketing Plan, which is an agreement between the federal and
provincial governments providing for the provincial shares of MSQ.
The national plan has been signed by the government and dairy farmer
organization in each of the ten provinces.
Dairy Commission (CDC), a crown corporation, provides leadership
and coordination with the provinces for the supply management system
in the country. The Canadian Milk Supply Management Committee (CMSMC)
administers the national plan and is comprised of producer, government
and processor members in each province. The CMSMC develops national
policy for the dairy industry and is chaired by the CDC. It reviews
production, economic and marketing factors at its regularly scheduled
meetings to determine if supply and demand are being met.
not only controls the domestic production allowed within the country
but also limits the amount of imported dairy products through tariff
rate quotas permitted by the World Trade Organization agreement
on international trade. The third aspect of supply management is
the price setting authority of provincially mandated marketing agencies
and the federal government support for the target price.
There are three
pooling agreements that have been negotiated and agreed to in order
to accommodate the changing markets within Canada. The Special Class
Pooling agreement provides for the pooling of market returns from
the special classes is shared by all dairy farmers across the country.
The All Milk Pool (P5) is administered by a Supervisory Body and
covers the provinces of Ontario, Quebec, PEI, New Brunswick
and Nova Scotia. This agreement not only pools dairy farmer returns
from the special classes but also for the returns in the fluid milk
and industrial milk markets. The Western Milk Pool includes the
provinces of BC, Alberta, Saskatchewan and Manitoba in much the
same way as the P5 does.
the Farm Products Marketing Commission of the Ministry of Agriculture,
Food and Rural Affairs, oversees the entire dairy industry. It and
Dairy Farmers of Ontario, the organization representing the interests
of dairy producers, are the signatories to the national and regional