Traditionally the term 'supply management' has referred to a variety of systems to decrease supplies, from government purchasing of surplus stocks to providing financial incentives to reduce production. Here we refer to supply management as a comprehensive system involving agricultural production quotas, producer marketing boards and import controls used to regulate agricultural products and the prices farmers receive for them.

For farmers, supply management supplements farmer income, takes the risk out of farming, and generates wealth. Under careful management, a relatively small decrease in production (5-10%) significantly increases the price of crops received by all producers. Production management is achieved through the use of quotas that assign a given amount of product to each farm. Once farmers purchase a quota, they are assured a stable source of income, and the smaller farms least able to withstand price fluctuations remain viable. The same quota also provides farmers with wealth, as quotas are initially capitalized dollar for dollar (since a quota ensures a higher price for farm products, it quickly becomes a valuable commodity itself). With increased farm prices, higher consumer prices replace billions in government subsidies.

Supply management systems have been proposed in the US on several occasions, though none have been implemented. At present Canada is the only working model of a supply management system, with programs in place for poultry, turkey, milk, eggs and broiler hatching since the early 1970's. While supply management is not without its problems, it remains a model system for ensuring fair producer prices.

RULES

• Supply Management - Federal - United States
  In the 1920's, the farm cooperative marketing movement sought to organize commodity cooperatives that could control the supply of goods in an attempt to stabilize markets. But without an ability to control production, they failed. The idea of supply management has resurfaced every few decades since, most notably in the 1960's and 1980's. During the 1980's farm crisis the idea of a supply management system for agriculture was proposed again, this time by Senator Tom Harkin and Rep. Bill Alexander in the 1985 Farm Policy Reform Act (S.1083). More...
• Supply Management - International - Canada
  In Canada, supply management has evolved into a comprehensive system involving production quotas and producer marketing boards that regulate and stabilize the both the supply and farm prices farmers receive for their poultry, turkey, eggs, and milk products. This system needs three components to work: control of imports, production, and pricing. Supply management began in Canada with the establishment of the Agricultural Products Marketing Act (AMPA) in 1949. The Act set the foundation for the current supply management system by delegating power to provincial commodity boards and agencies to regulate marketing (set pricing and production) of agricultural products and to set and use levies in relation to inter-provincial and export trade for their province. More...

More:

• See an analysis of the Canadian poultry industry under supply management in the Fall 2000 issue of The New Rules journal.
• National Contract Growers Association
• Chicken Farmers of Canada
• When the Farmer Makes the Rules - by Brian Levy, The New Rules, Fall 2000