Marc F. Bellemare Posts

“Milked and Feathered: The Regressive Welfare Effects of Canada’s Supply Management Regime.” That’s the title of a new article (gated, unfortunately) by the University of Manitoba’s Ryan Cardwell and coauthors in Canadian Public Policy/Analyse de politiques.

I recall first hearing about supply management policies in an international trade class I took as an undergraduate at the Université de Montréal. If you are not familiar with supply management, it consists broadly of three policy interventions:

That is the title of a short talk I gave to a bicameral (i.e., House and Senate), bipartisan audience of senior congressional staffers last Friday at the United States Capitol in Washington, DC. You can find the slides I had prepared for that talk here.

In my talk, I discussed progress (or lack thereof) on the Millennium Development Goals as well as the way forward, and I articulated my vision of what the development “industry” should be doing instead. A lot of what I discussed is related to things I have previously written about on this blog and in a Foreign Affairs article.

This paper provides a framework for thinking about agricultural policy, why and how it is introduced, and how it changes over time. This framework suggests that agricultural policy will be influenced by both concerns for efficiency and lobbying. While agricultural policy will not always be effective, it will be relatively stable, at least in terms of its broad outlines. Underlying this broad stability, however, will be considerable small-scale change as program and policy details shift in response to a changing environment. When policy changes in a major way, which it almost always will, the shift will be abrupt—a punctuation. These abrupt changes come as attention is eventually paid to areas and/or issues that are increasingly understood to be not working. While there is considerable room for economic analysis in the policy process, it will not be the main driver; this role belongs to politics—the ability to change the discourse around a policy issue in such a way that different evaluations and interpretations of the policy and its impact are created. Based on the analysis in this paper, it is argued that supply management is more likely to see significant change than business risk management programs, since more attention seems to be currently directed at the former issue. It is also argued that although proponents of local food, organic production, and urban agriculture have had some success at getting attention focused on these issues, this success will not translate into any major policy changes, in part because markets for these products are developing and appear to be working reasonably well.

That’s the abstract of an article by Murray Fulton in the latest issue of the Canadian Journal of Agricultural Economics. The emphasis is mine.

My favorite part of the article, because it happens to capture how I tend to think about policy making in general, was this excerpt:

… agricultural policy rarely, if ever, gets formed to maximize economic efficiency. While policy makers clearly worry about the size of the economic pie and have taken steps to try and increase it, understanding policy making solely as an economic surplus optimization exercise does not provide a complete picture of the process.