Supply management is pushing tens of thousands of Canadians below the poverty line. The solution: raise prices?
Raise prices in February by 2.25 per cent and then if your margins aren’t big enough as demand for your product falls, the solution: raise prices again by another 2.76 per cent.
In almost any other business the reverse would be true; lower prices to increase demand and hope that the higher volume would make up for decreasing revenues.
But if you have a monopoly – as does the Canadian Dairy Commission, part of the Canadian Supply Management system for the dairy industry – and your sales for industrial milk used in the manufacturing of yogurt, ice cream, butter and other dairy products are falling and hurting revenues, then just raise prices.
Consumers, and especially those at or near the poverty line be damned, along with the Canadian restaurant industry who have to pass on these increases, for we would not want to see dairy farmers miss a pay day.
And the end result, pushing tens of thousands of Canadians who are at or near the poverty line into poverty according to a column in this morning’s Financial Post.
In fact the Post reports that once this increase goes through it could push a jaw dropping 189,000 Canadians below the poverty line.
But hold on, Dairy farmers are happy.