On August 14, Sylvain Charlebois published “Ten myths Canadians need to stop believing about supply management”. The piece is more nuanced than some of his previous columns. On a few points, I even agree with him. On others, however, the facts presented are only partly accurate, stripped of essential context, or used to support conclusions they do not actually demonstrate.
That is probably what disappoints me most. Sylvain Charlebois is not just any commentator: he is a professor, holds a research chair, and is regularly presented in the media as an expert on food policy. It is therefore reasonable to expect a particularly high level of rigour from him. Yet several times, the starting facts are not necessarily false, but the missing context, the conflation of different concepts, or the conclusions drawn from them give readers a distorted picture of reality.
Rather than answer with ten opposing slogans, let’s look at his ten “myths” one by one.
1. Are dairy farmers millionaires?
Yes, if you add up the value of the land, buildings, herd, machinery and quota, many dairy farms are worth several million dollars. But a six-million-dollar farm is not a six-million-dollar bank account.
The value of those assets, by itself, tells us nothing about a farmer’s disposable income, debt load, reinvestment needs or the return earned on all that tied-up capital. That is precisely the distinction I explored in Dairy farmers are millionaires. Yes, but….
Charlebois nevertheless raises a real issue: high asset values make it harder for new farmers to enter the sector and for farms to be transferred to the next generation. But equating productive assets with personal wealth remains a shortcut.
2. Does supply management protect the family farm?
No, supply management has not prevented consolidation. The number of Canadian dairy farms has fallen sharply since the system was created. But that figure alone absolutely does not prove that the system failed to protect family farms. To know that, we have to compare what happened elsewhere.
Between 2014 and 2024, Canada went from roughly 12,007 dairy farms to 9,256, a decline of 22.9%. Over the same period, the United States went from about 44,809 licensed dairy herds to 24,811, a decline of 44.6%. The proportion of farms that disappeared south of the border was therefore almost twice as high.
This comparison does not prove that supply management alone explains the difference. The two countries have different farm structures, markets and policies. It does show, however, why simply counting the number of Canadian farms cannot serve as proof against the system. The data are instead consistent with the idea that more stable farm income can slow consolidation, even if it cannot stop it.
3. Do Canadian dairy farmers receive no subsidies?
It depends on what we call a subsidy. Charlebois groups together compensation payments, tariffs, import restrictions, administered prices and various public programs. In a broad economic sense, all of these can be described as support. But they are not equivalent mechanisms.
A tariff is not a government cheque. An administered price is not a budget expenditure. And compensation paid because the government permanently gave up part of the domestic market in a trade agreement is not the same thing as a permanent program that tops up farm income every year when market prices collapse.
The contrast with the United States remains important. American dairy farmers have access to federal programs such as Dairy Margin Coverage when their margins become insufficient. Canada chose a different mechanism: match production to demand and derive most farm income from the marketplace.
Another shortcut deserves attention. In his “ten myths” article, Charlebois refers to a national dairy marketing budget approaching $200 million while discussing the “dairy lobby.” But that does not mean $200 million is being spent on political lobbying. Producer-funded money supports advertising, promotion, market development, education and nutrition programs, sponsorships, research and other industry initiatives. As in many other industries, only part of that activity is directly related to political representation.
4. Do trade agreements make every dairy farmer lose money?
Charlebois emphasizes that individual farmers were not required to submit financial statements proving a farm-specific loss before receiving compensation. That is true. But that was not what the program was designed to measure.
The Canadian government permanently granted foreign competitors access to a portion of the Canadian dairy market. Compensation was then distributed in proportion to quota held, meaning according to each farm’s share of production capacity in that market. A farmer holding twice as much quota did not receive the same cheque as a smaller producer: the compensation was proportionally larger.
That approach strikes me as about as fair as it could reasonably have been. The loss is structural and collective, not simply a decline in accounting income observed in a given year. Quota is precisely the instrument that allocates each producer’s share of the Canadian market.
It is also worth remembering that farmers themselves finance the promotion and development of that market through levies tied to their production. Advertising, educational programs, market development, sponsorships, research and other initiatives are funded collectively. When a government then decides to permanently give away part of the market that producers helped build, compensating farms in proportion to their market share is anything but arbitrary.
5. Would ending supply management automatically lower prices?
On this point, Sylvain Charlebois and I agree. Ending supply management would not guarantee lower grocery prices. He acknowledges that himself in his ten myths.
The farm-gate price of raw milk is only one component of the final retail price. Processing, energy, packaging, transportation, equipment, distribution, wages and benefits, including in plants with unionized workforces, as well as retail margins would all still exist if the price paid to farmers went down.
There is also an important evolution in his public position. In another article published August 19 by La Vie agricole, following a discussion with farmer Frédéric Poulin and Simon Bégin, the reported conclusion is that none of the three wants to abolish supply management. Charlebois instead talks about reform. That is an important distinction, and one I readily acknowledge: our disagreement is therefore more about the diagnosis and the proposed reforms than about outright abolition.
6. Do farmers alone bear the cost of dumped milk?
Here, we have to distinguish between two situations that Charlebois’s wording tends to blur together.
When an individual farm exceeds its quota and has to dispose of milk that cannot be marketed, the loss is borne directly by that farm. The dumped milk is not reimbursed through some collective mechanism.
When there is instead a collective market surplus, the situation is different. Costs can be shared among producers through pooling mechanisms. In that case, yes, the loss is pooled. But it is still borne collectively by producers, not mysteriously transferred to someone else.
We should also avoid speaking as though every surplus necessarily means whole milk being poured down the drain. Imbalances often involve milk components, particularly non-fat solids, which need outlets distinct from butterfat.
7. Is milk dumping unavoidable?
As in virtually every agri-food industry, losses exist. No real-world system uses 100% of every litre produced perfectly, every day of the year. The relevant question is therefore less whether waste exists than how large it actually is.
On this point, official data paint a far less dramatic picture than some headlines suggest. Agriculture and Agri-Food Canada states that in 2023, more than 99% of raw milk produced on Canadian farms was processed and notes that milk disposal is rare in Canada. In other words, the system already processes virtually all the milk produced.
We should be especially cautious with estimates claiming that several billion litres have been “dumped” since 2012. Those figures do not come from a national registry adding up actual measured volumes poured down drains. They are based on an estimate of the gap between theoretical production calculated from cow numbers and average yield, and the volumes actually sold to processors. That gap can include a variety of things, including milk fed to calves, milk that cannot be marketed, normal losses and methodological differences.
That research can certainly raise a legitimate question about the quality of available data. But an indirect estimate of “missing milk” should not be presented as a precise measurement of billions of litres deliberately dumped.
8. Has Canada fully complied with CUSMA?
The disputes have to be distinguished from one another. The United States won an initial dispute over the way Canada reserved certain shares of its tariff-rate quotas for processors. Canada subsequently changed its rules.
Washington challenged the revised system again. This time, in 2023, the majority of the panel rejected the main U.S. challenges. In other words, the fact that the United States is dissatisfied with Canada’s implementation of CUSMA does not automatically mean Canada is violating the agreement.
Our interpretation of the current rules was therefore indeed upheld on important elements of the second dispute. I explored this issue in more detail in Closed dairy market? The numbers say otherwise and in my recent articles on U.S. demands.
9. Does supply management guarantee food security?
I would replace the word “guarantee” with contributes significantly to. No system can by itself guarantee food security in the face of a major animal-disease outbreak, a natural disaster, a logistical breakdown or an international crisis.
But supply management contributes directly to the stability of our production capacity. It seeks to avoid both extremes: chronic surpluses that collapse prices and drive farms out of business, followed by shortages that send prices soaring and force us to rebuild lost production capacity quickly.
Food security does not mean autarky. The fact that farmers use imported tractors, veterinary medicines or certain inputs does not make domestic dairy production capacity irrelevant. A farm that disappears cannot be restarted in a few months: it requires a herd, buildings, land, equipment, capital and labour. Maintaining that infrastructure in Canada is clearly one component of food-system resilience.
10. Does reform mean abolishing the system overnight?
On this, we agree again: reform means reform, not abolition. Keeping the system entirely unchanged and abolishing it immediately are not the only two options. That willingness to reform without necessarily abolishing the model also emerges from the discussion reported by La Vie agricole.
The problem lies instead in the concrete content of the proposed reform. In his ten myths article, Charlebois proposes, among other things, a 15-year transition, lower industrial milk prices, easier entry for new farmers, more processing and innovation, and a gradual approach to quota values.
But the measures that directly affect farms have one thing in common: they place most of the cost of the transition on producers. Lowering industrial milk prices reduces farm income. Reducing or gradually eliminating quota value simultaneously hits a major asset on farm balance sheets. Making it easier for new producers to enter without explaining how additional production would be allocated could also dilute the economic value of existing production rights.
A reform of this kind could cause exactly the phenomenon Charlebois criticizes the current system for failing to prevent: accelerated consolidation. The most indebted farms, smaller farms and farms that have recently invested would be the most vulnerable. Better-capitalized operations could more easily absorb lower income, buy the assets of those leaving the sector and grow larger.
A credible reform therefore has to answer a very simple question: who pays? If lower milk prices and the loss of quota value are absorbed mainly by producers, then the reform also needs to explain why that transition would not trigger a mass exit of farms.
Criticize supply management, yes. Oversimplify reality, no.
Supply management is not perfect. The cost of entry for the next generation, quota values, processing capacity, transparency, surpluses of certain milk components and industrial competitiveness are all real issues. Farmers and their organizations have to be willing to discuss them.
But criticism deserves the same scrutiny. A farm worth several million dollars does not necessarily mean a farmer has millions in liquid wealth. The decline in the number of Canadian farms cannot be assessed without noting that consolidation has moved much faster in the United States. Trade compensation was not distributed equally at random: it was calculated according to quota held. More than 99% of Canadian raw milk is processed. And a U.S. challenge under CUSMA does not automatically amount to a Canadian violation.
I have no problem with Sylvain Charlebois wanting to reform supply management. On some points, I even share his diagnosis. But when an academic with such a prominent public platform sets out to “debunk myths,” he should also accept that his own shortcuts will be examined with the same rigour.
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