The coddling of the Canadian cow farmer

DONALD TRUMP is cheesed off. Canada will be left out of a renegotiated North American Free Trade Agreement (NAFTA), he said, unless it does something about its “tremendous trade barriers”, including an eye-catching tariff of “almost 300%” on dairy. Why would a country that embraces free trade erect protectionist walls around this sector?

Canada once had free trade in dairy products, but the market was plagued by boom-and-bust cycles, in which processing firms named their prices and small-scale farmers bore all the risk. Provinces argued about flooding each other’s markets with milk. The milky white flag of peace flew in 1972 when Canada instituted a “supply-management” system, which set prices for dairy products, and later poultry and eggs. Farmers were allocated quotas. Imports were strictly controlled, with high tariffs on imports over a set amount. Government subsidies were modest; consumers paid for the system through extortionate prices.