User:Oceanflynn/sandbox/Supply Management (Australia)

Supply Management (Australia) was an agricultural policy system that controlled supply and demand of certain agricultural sectors from the 1920s through 2000. In the 1980s the egg industry was completely deregulated. The dairy system was reformed by 2001.

Policies
With SM in place milk products were divided into classes for pricing with fluid milk priced twice as high as industrial milk. The support price for industrial milk used on in the domestic market, was decided by the six state governments. While the prices of industrial milk varied with global price changes, the Australian federal government "guaranteed support payments" to the producers of milk for domestic consumption. Some states, such as Queensland, New South Wales and Western Australia, also "used individual farm quotas to allocate shares for supplying fluid milk".

Background
Supply management model was invented in Australia in the 1920s to stabilize and protect the income of dairy faced with low farm gate prices amid "economic swings".

The egg industry was the first to be deregulated in the 1980s. the egg industry was completely deregulated. From 2013 through 2016, the Australian Egg Corp. Ltd. (AECL), representing 400 commercial egg farmers, was under a federal investigation by the Australian Competition and Consumer Commission. The AECL was faced with culling birds because of an egg oversupply crisis. They had allegedly attempted to "drive up egg prices to ensure farmers’ survival". According to University of Waterloo professor, Bruce Muirhead, the Egg Farmers of Canada chair in public policy, the price of eggs in deregulated Australian market cost from $4.50 to $5.50, which is higher than the price of eggs in Canada under the SM model.

In 2000-2001 Australia eliminated support prices and quotas in the dairy industry, putting an end to the decades-old supply-management system.

Elimination of SM
In 2000, Australia undertook a reform of the laws that governed the dairy industry and eliminated its decades-old supply-management system including its support prices and quotas.

Dairy farmer compensation
A tax on Australian milk consumption was levied until 2008 to finance compensation payments to dairy farmers negatively impacted by the abolition of SM quotas and the decrease in farm gate prices. In 2016, as the dairy industry was again destabilized, the federal government committed a "$555 million support package for dairy farmers."

Economists compare dairy industries in Australia, New Zealand and Canada, as Canada still uses a Supply management system.

Australian dairy industry post SM
By 2003, Australia was of two OECD countries with the lowest agricultural supports.

Bega Cheese, which is listed on the Australian Securities Exchange, a Fonterra brand, is one of Australia's largest dairy companies, with a revenue of A$1,195,967,000 in 2016 and A$1,112,630,000 in 2015. Forty percent of their revenue comes from bulk "core dairy ingredients" such as cheese, cream cheese and powdered skim milk (PSM). Twenty percent of their income is from milk ingredients such as milk protein concentrate (MPCs). In 2016 in spite of "significant competition" in global dairy markets, low commodity prices, farm gate price "turmoil" and "volatility" in "infant nutritional demand" Bega Cheese remained stable.