Supply Chain of Dairy Product in Canada

Supply Chain of Dairy Product in Canada

Introduction

If one looks at the time period between the years 2007 and 2008, it is pretty evident that farmers were left in a pretty dire state after all these events. Then came the events of 2009, the recession had quite an impact on the farming industry in Canada. All these things gave government lot of headache. There was this new interest on the governmental level to initiate the supply management programs (Al-Mudimigh et al., 2004). This paper demonstrates the impact of supply management system had on consumer price index in dairy market in Canada.

Discussion

Why there was need for such system

Even if one looks at the history, the production of Milk has been tried to be disrupted by lot of countries. This was pretty common especially during the years of the Second World War. With the advent of these programs, there has been an impact on the number of dairy farms that are working at that moment of time (Reardon et al., 2003). Their size was also being discussed and at the same time, the consumption growth and the consumption price was also being looked at.

The Policy of the Management of the Supplies

The policy of the management of the supplies has been carried out by the Canadian government for a long period of time. The policy has been devised to ensure that there is greater price control in the prices of certain commodities in Canada. These commodities are most of the times, dairy products such as Milk, Cheese and eggs and some other poultry stuff. What this system does is that it takes control of the supply of such products that are limited in the market and they way they can be controlled is that the amount of the goods that are produced each year, they are needed to be kept in the local market (Fisher, 1997). At the same time, the imports of the commodities are needed to be limited by the use of the tariffs that are high most of the times. When the supply is restricted, the price level is on the higher side. This is one of the basic principles of the macroeconomics. This increases in price in return the profits of the farmers. What this system does is that it allows the governments at the federal as well as the local level that it gives government an opportunity to make sure that they are not subsidizing their product and what it does is that they farmers are actually benefitted due to the market price being on the higher side. It has to be kept in mind that some of the other agricultural sectors of the Canada, such as beef, pork and grain are not limited by such controls. They are more or less competing in a fair manner at the global market. It is a pretty common consensus among the economist that the supply management programs are designed in a manner that they are ...