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Guaranteed agricultural costs: how does it work within the United States and Canada?

The concept formulated by Emmanuel Macron of flooring costs to ensure farmers' revenue was met with skepticism or doubts from many gamers within the agri-food system. However, a number of nations together with the United States and Canada have used related mechanisms for many years.

In Canadathe costs of milk, eggs and poultry are regulated by way of “of a well-defined formula”defined to Agence France-Presse (AFP) Sylvain Charlebois, professor specializing in agri-food at Dalhousie University in Halifax, Canada.

For instance, the value that dairy farm operators obtain for the milk they produce is established by the Canadian Dairy Commission (CCL) and adjusted within the ten Canadian provinces. This value – usually up to date every year – varies and depends upon how the milk is used.

“It is a very rigid and highly regulated system which is more than fifty years old and which is strongly defended by producers”continues Mr. Charlebois.

In the USAit’s Congress which units in legislation, for 5 years, the costs of twenty-three agricultural merchandise, together with wheat, corn and soybeans (however not meat). “We are talking about reference pricesexplains Thierry Pouch, chief economist at the French Chambers of Agriculture, to AFP. The American government pays the farmer the difference between this reference price and his sales. »

Milk benefits from a different system and a real minimum price, without compensation from the government but below which sales are not possible. It is the only agricultural product in this case, to the knowledge of Jonathan Coppess, professor at the University of Illinois. This price is set independently in eleven major regions in the United States and is based on a complex calculation method, which varies depending on the final use of the milk (drinking, cheese, butter, etc.).

According to Mr. Coppess, this program is not “really effective”partly as a result of the costs are established in a tortuous approach, on the nationwide stage due to this fact with out making an allowance for regional specificities, and since they’re there for 5 years.