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. Boards are delegated authority through AMPA-sanctioned marketing orders. The boards collectively negotiated for farmers with processing and retail industries. Instead of farmers fending for themselves, marketing boards negotiate with the processing industry on behalf of farmers to guarantee a fair price is paid. However, the boards' jurisdiction ended at the provincial border. Without inter-provincial controls, farm products crossed from province to province, undermining the supply management of the boards. This became painfully apparent in the 1960s, when various provinces started banning each others' products in order to protect their own producers. Overall increases in prices also spurred demand for lower cost American imports. To overcome these difficulties the federal government passed the Farm Products Agencies Act (FPAA) in 1972. The Act founded the National Farm Products Council (NFPC) and national marketing agencies. These marketing agencies are assigned authority to implement and administer national marketing plans, allocate quota and market share and generate revenue through levies. The NFPC was then placed in charge of overseeing these agencies and administering the AMPA and FPAA legislation.

In the following six years, national boards were established for eggs (NEMA), turkey (CTMA) chicks (CMHEMA), poultry (CFC) and milk (CDC). In these Canadian industries, both the supply and farmgate prices are regulated by producers and their representative provincial and national boards. Critical to the regulation of supplies is a quota production system, whereby farmers purchase a permit to produce a specified amount of product. Legally, quotas are retained by the marketing board, which reserves the right to make small adjustments (typically +/- 2-3% a year). Quotas are bought and sold in each province; they may also be willed or passed on. Based on cost of production figures, quota and price are set to give farmers a fair return. Regulation of price is achieved by negotiations between marketing boards and processors. Producers pay a uniform fee (a levy) on all product produced to finance the agency's administration and marketing expenses.

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