The TPP & You: What the Trans Pacific Partnership Means for Agriculture

Jan 13 2016

 

This article is the second in our series on the Trans Pacific Partnership and it’s impact on Canadian industries. Catch up on the others here.

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Agriculture is one of Canada’s main points of trade, contributing more than $18-billion annually to our Canadian economy. The TPP negotiations have put our agriculture sector under the microscope and have pushed Canadians to consider the fate of this sector.

Supply management helps to connect our domestic supply to our domestic demand; ultimately and hopefully, offering a fair return to the producers (farmers) and a supply of dairy, poultry, and other consumables to the consumers.  

With the TPP, countries that currently exist without a supply management system are managed and operated by the free market and are subject to volatility and swings in commodity and price fluctuations – farmers and other producers usually have little to no control over this.

Those in favour of supply management see this as the main point of contention: allowing the free market to rule and govern the way the agriculture sector is run in Canada could reduce that $18-billion dollar contribution significantly. It could also lead to issues of monopolization, as in the case of New Zealand, where the company Fonterra holds a controlling share of the dairy sector.

As of October 5, 2015, the concluded negotiations included an agreement for Canada to provide “limited” concessions on the sectors that are governed by supply management, including poultry and dairy. These concessions include more duty-free imports of products from the TPP countries into Canada – while allowing the brunt of the ever-controversial supply management to exist through government investments. These investments will total to $4.3 billion dollars over the next 15 years.

Through offering a hybrid system and allowing an open and unregulated market, this could lead to increased food exports due to the reduced tariffs that are commonly imposed on various food, beverage and dairy products produced by nations in the TPP. Lower prices come with a myriad of positive benefits:

  • Lower product prices

  • Freer flow of products

  • Ultimately it will help boost demand and open up new markets

  • Strong and ethical trade practices could create opportunities for Canada to become a preferred trading partner

Overall, the addition of Canada in the TPP will provide opportunities that have not existed before, on a new frontier – one that is in the foremost growing market in the world. Not to mention the practical benefit of Canadians seeing lower prices at the checkout counter as a result of these changes.

Mantralogix has been offering ERP services to companies who use supply management for years. Supply chain management software helps to support a company’s management and movement of raw materials, inventory and finished products from the beginning of production to the end point: consumption. Supply chain management is a company’s main source of profitability. Using the proper software is critical to a company’s success, and Mantralogix can help you find the perfect fit for your company’s supply management needs – while taking into account the upcoming changes that the Trans Pacific Partnership will bring.

Contact us here at Mantralogix today!

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