Subsidizing Dairy Not Sound Economics For Anyone Except Farmers

Sigh. I can't believe what I just heard on CJAD radio about subsidizing the dairy industry. Sigh. Unfortunately, the position of supporting subsidizing dairy doesn't surprise me. Sigh.

The dairy industry is part of what's called supply-side management and its impact does disproportionately impact low-income families.

Interestingly, the same people who claim to care for low-income families are willingly ignoring this because...stable prices!

It's interesting to note how policy picks and chooses how poor people will benefit from their decisions.

That's the very definition of paternalism and arrogance. 'Yes, okay. You pay for it but at least you're not paying wild prices like you see in the USA!'

Let me expand.

One of the panelists used the rock solid anecdotal example of going to buy a pound of butter in the USA .She deliberately or unwittingly took a snap shot price to base her argument on. That is, the price of butter shot up to $5 for a pound. Worse, she went on to pull a ridiculous 'this is what you get in the free market' line. Hence, not fair thus subsidizing is good.

Except it's wrong and all too typical of a left-wing, Soviet-style idea deeply entrenched in the Canadian economic psyche scarce removed from 1974.

How dare the market fluctuate!

It's simple why it's wrong. We know the price of butter won't stay at $5 in the U.S. since price movements are tied to many factors including consumer demand and inflation. For example,  if the cost to produce butter goes down, then the price will shoot back down.

More importantly, it's not reflective of the overall average of the price of butter which is far lower in the United States. Same for milk and eggs. Each being staples every citizen wants or needs; particularly the income bracket everyone on the left seems to want to help through paternalism: the poor.

Fluctuation in prices are not bad. In fact, it's healthy. We've been taught it's bad and that somehow someone is trying to screw us over. But this perceived vulnerability has more to do with general economic ignorance than it does Mr. Burns cornering the butter market. Which is what Bernie Sanders and his idiotic economic rantings amount to.

Contrast this to Canada. Where we're so much more progressive, caring and intelligent here.

A subsidy acts to distort market prices. As such, it masks that true and actual cost of what you're paying for.

So to get back to Trudy Mason's specious claim that butter in Plattsburgh is $5 and that we industrious Canadians figured out a way to make sure we 'stabilize' prices seemingly proves her point that this 'stability' is better. I contend this is absurd.

Nobody is subsidizing that $5 butter in the USA. Here, taxpayers do and notice they never bother to examine the exact cost of that subsidy has on prices. They can ignore this all they want but it's the singular factor in determining whether 'price stability' is worth it. Better to just pretend and hide behind a narrative perhaps?

Whatever it is, I'm pretty sure it's above what we pay for. So you may pay $4.50 for butter here but the true cost is probably $6 or $7. In other words, you're really paying $7 all year round.

To take the subsidized day care example here in Quebec. Parents pay $7.30 for day care. But the true costs are closer to $100 which taxpayers pay through higher taxes.  For your Bernheads out there this can't be said enough: Nothing in life is free. And no, raping people out of their earned income to pay for free shit you demand is not 'free'. You just robbed Paul to give to transgendered Mary - or something.

Anyway. The average cost of a daycare on the continent is about $70-$80. So, in our rush to pretend we're smarter than the rest, all we've managed to do is inflate the costs through policy. And make a mess of an entire industry to boot. Moreover, a private daycare without a subsidy can run its operations at substantially lower prices.

Oh, because they offer less quality you say?

Pish posh. That's just subjective fear-mongering pushed by the subsidy crowd and statists. You can offer a superior service at a fraction of the cost. Whereas, more often than not, you're not getting $100 worth of services on the subsidized side.

In this vain, and to get back to the subject at hand, I've heard the argument made that such protectionism ensures Canadian dairy is a superior product.

Bull shit as my point about daycare illustrates.

I know which system I prefer.

The other dubious argument the panel made was subsidies are necessary for food sovereignty.

First, off I don't even know what that means. I highly doubt by food sovereignty she means people engaging in their own farming and raising of cattle. You know, free of government intervention on the faulty premise that it may be 'dangerous.' True food sovereignty is achieve when people are free to plant or produce their own "cottage food" in the manner they choose to fit best their local communities and not be harassed by a government agency in Ottawa (or Washington) telling them some bull shit policy with little merit prevents them from doing so.

But in this context, the thinking goes something along the lines of we need to pay farmers to stay on their unproductive and unprofitable farms because we need food.

It all comes down to relying on the government.

I mean, we don't want to import from those icky Americans right?

At least, that's how I interpret whenever I hear such rubbish.

Truth is, is Canada's ability to achieve food sovereignty is limited because of climate and unworkable or bad soil. If sovereignty means not having access to grapefruits and rapini, then I'm not for it. I'm for trade. Free trade is the only way to keep any sense of economic bearings in this country.

The only option to make up for this constraints is if you let technology and innovation reign, which in turn means letting the free market determine to what degree we truly are sovereign. In addition, it that would mean removing arbitrary man-made, self-imposed restrictions that hurt trade and scary things like GMO and other 'frankenfoods' Luddites hate. They prefer, as Mason (who by the way does a good job of generally bringing perspective to the table. Just not in this case) seems to push for, a top-down approach.  That is, to leave it in the hands of bureaucrats. Yes, because that's always worked.

So we're, to me, hampered by climate, irrational economic notions and anti-science fears.

It's not just food we see this play out.

She mentioned we need to be 'energy independent.' But that won't happen as long as environmentalists and unscrupulous or just plain dumb politicians get in the way to stop projects (think pipelines) that prevent us from achieving this goal and objective.

Canada is not independent in many ways and much of it is because of our choices and decisions we've made over the last few decades. We never made a serious attempt to develop a true finished goods based economy funded by our own industrialists or innovation.

We've always had to rely on American ideas and capital on this front thus leaving us a branch plant economy.

Now don't get me wrong. Canada is not the only country to engage in stupid supply-side management. Most major Western nations do and often to the detriment of poorer countries we trade with.

Multiple wrongs don't make a right.

In the end, as the coins and dollars trickle and slide down, guess who pays?

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