The Pillars of Supply Management

Supply management is based on three basic pillars, each of which is critical to ensuring that the system operates smoothly.

1) Supply Determination

Alberta’s chicken producers plan production to ensure that a steady supply of quality product is available to meet consumer demand. This balance between supply and demand ensures price stability in the domestic market.

2) Price Determination

Under the Canadian supply management system, producers receive prices that guarantee reasonable returns and a decent living from their production. Canadian producers collectively negotiate prices for their chicken, and these prices are then regulated by provincial chicken boards to enable farmers to cover production costs, including labour and investments. Producers are thus empowered to deal as equals with the small number of large processors who buy their chicken.

3) Import Controls

Producers need to know the level of imported chicken products so they can plan their production to meet Albertans’ needs, without creating a surplus. Canada’s federal government has committed to limit imports to ensure Canadian chicken market requirements are primarily met by Canadian chicken production. A predetermined number of chicken products are imported tariff-free every year. A higher tariff applies to any product above that level, which is subject to agreements of the World Trade Organization. This is the only way to keep imports predictable.