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HomePolicy Articles Article Summary

Australia's Dairy Reforms: Lessons for Canada

Policy Series by Paul Earl

The ultimate objective of Paul Earl’s study is the potential applicability of the Australian experience to Canada’s Supply Management system. To this end, he presents some statistics on dairy farming in Australia, outlines the previous price support and subsidy regime, reviews the main features of the new program that was introduced, and describes some of the major impacts of the change.

Earl notes that, like Canadian dairy farmers, Australian dairy farmers have enjoyed the benefits of administered prices which exceeded those that would have prevailed in the open market. Unlike Canada, however, only the price of fluid milk destined for human consumption was controlled, whereas milk used for production of dairy products traded freely. As well, farmers received a subsidy on the milk they sold to the manufacturing sector.

Over the 1990s, Australia embraced free markets and competition; in 1999, the dairy industry approached the federal government with a plan to end the regulation regime. In 2000, both the administered price and the subsidy were eliminated, and three programs were introduced to provide financial assistance to farmers to either adapt or exit the industry. Earl suggests the initial effects of the new program have resulted in a significant reduction in farm income and profitability – reductions which were, however, offset by the new programs.

The author concludes with comments on whether the Australian model might provide a framework for compensating dairy farmers in Canada when international trade pressures finally results in the demise of Canada’s system.

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Policy Publication Details

Author(s): Paul Earl;
Publisher: Frontier Centre for Public Policy [ Visit Website ]
Year Published: 2003; Publisher Type: Research Institute
Publicly Available: Yes Research Focus: International;
Registration Required: No Language: English
Payment Required: No Publication Format: Adobe PDF

Subjects / Categories:

Policy Articles / Regional & Sectoral / Agriculture
Policy Articles / Regional & Sectoral / Agriculture / 2003
Policy Articles / Regional & Sectoral

Keywords / Tags:

dairy industry; Australian dairy industry; Canadian dairy industry; fluid milk; price regulations; subsidies; deregulated market; farm profitability;