Ottawa—It's time to get real in discussions about the future of dairy production in Canada and grasp the upheaval that dumping supply management would create, says Al Mussell, Research Lead with Agri-Food Economic Systems at the University of Guelph. The dairy sector “is the industry that is the subject of the most government intervention of any industry anywhere in the world,” Mussell said in a presentation to the Senate agriculture committee prepared with fellow ag economist Douglas Hedley. “There is no question. It doesn't matter where you go.” Due to an influx of dairy products under new trade agreements, the “evolution in milk supply management will be complex and perhaps difficult,” he said. “However, we have no responsible or realistic alternative but to engage it. “Abandoning our system of milk supply management in the face of trade pressure will invite the malaise affecting other dairy industries and the need for stabilization and domestic support will likely meet with trade challenges from others,” he said. “Moreover, elimination of production quotas that support milk supply management would destroy an immense amount of policy-created asset value, inviting massive compensation demands from producers and seriously financially weakening the dairy sector, some lenders and some input suppliers. Rather, the relevant task and opportunity is to improve and retool our milk supply management system.” Supply management foes like to point to other countries that have deregulated milk production, he said. “It's usually New Zealand that's trotted out as the Boy Scout. They are undergoing an experience right now where they are having a regulatory review of an organization that has been alleged for some time to be a state trading enterprise, and I think that will probably be revealed more deeply than has already been considered.” The best way to gauge the health of the sector is the level of innovation, which he said can be measured by “the co-operation among producers and processors. In my understanding, I think that compared with where we were 10 or 20 years ago, that's going much better. “The fact that we managed to get a producer-processor agreement to arrive at a class 7 was really quite an accomplishment,” he said. “Some years ago, I doubt very much it could have happened.” A producer-owned cooperative developed the first new yogurt brand in year through this co-operation, he said. “I'm not so sure we are quite as lacking in competitiveness or innovation as some of my colleagues are.” Senator Terry Mercer of Nova Scotia and the longest-serving committee member said Canada continues “to compare ourselves to people who do not play the game fairly. “We are honest about the game. We don't subsidize our agriculture. … Our farmers can compete with anyone in the world, but not when European farmers are being subsidized and when the 30 per cent of budget is on agricultural subsidies. The Americans hide half of their subsidies but when the cheque comes in, it's the most exciting day for the American farmers. “We're the Boy Scouts of the world but we end up paying the price because we don't subsidize our agricultural products,” he said. “You can criticize supply management all you want but it provides the products that they manage at a price Canadians can afford and it employs Canadians. “We can produce products that we can market around the world if we get our act together,” he said. “I don't know how we are going to get our act together when everybody seems to only be sitting here complaining about the things that have gone wrong. Well, guess what? You are not going to get it right if you continue to sit and talk about it.” Mussell said that in addition to adjusting to the European, Pacific and new NAFTA agreements, Canada also has to prepare for the WTO Nairobi Declaration of 2015 to eliminate subsidized exports. As a signatory, as of January 1, 2021, Canada will be entirely out of the market for dairy exports with the exception of products it declares as free of subsidy. Alex Binkley is a freelance journalist and writes for domestic and international publications about agriculture, food and transportation issues. He's also the author of two science fiction novels with more in the works.