In September 2012, police in Canada’s Niagara region announced that they had busted a cross-border smuggling ring. The contraband? Cheese.
This international criminal conspiracy was not exactly sophisticated, as it came out at trial. It involved people buying cases of cheese in the United States, driving them back across the border into Canada without declaring the goods, and selling the ill-gotten product to local pizzerias. This “Mozzarella Mafia” scheme lasted for years, during which the ringleader, himself a police officer, pocketed an estimated U.S.$165,000 in profit. The reason this was so lucrative was Canada’s agricultural policy known as “supply management,” which results in milk and cheese prices that are as much as three times higher in Canada than in the United States. If this rings a bell, it might be because President Donald Trump has repeatedly attacked Canada during NAFTA talks over the past year for being “unfair” to American dairy farmers.
Canada’s supply-management system dates back to the 1970s. It first encompassed dairy and was later expanded to eggs and poultry. Strict production quotas limit the domestic supply of these products and raise prices, while tariffs of about 250 percent to 300 percent keep cheaper American dairy effectively out of the market. Paying more for dairy isn’t something voters clamor for, but the system has remained in place for decades thanks to the power of the Canadian dairy industry, widely acknowledged as the most fearsome lobby group in politics. Its deep pockets and ability to mobilize voters in key areas have made challenging supply management a politically risky bet. But this cozy arrangement could soon be coming to an end. Supply management is at the center of the biggest political shake-up in Canada in more than a decade, which could lead to the formation of a new breakaway political party that fractures the opposition Conservatives and all but guarantees Justin Trudeau another term as prime minister in next year’s elections. And the only person who could break the iron grip of the dairy cartel on Canadian politics could be Trump. Welcome to the strange world of Canadian dairy politics.
Federal elections in Canada usually come down to which party can win the two most populous provinces, Ontario and Quebec. It just so happens that the dairy industry is also centralized in those provinces, making politicians loath to challenge the system. And while the industry’s PR depicts dairy farmers as running mom-and-pop operations, most dairy farmers are millionaires. All three major national political parties still fall over themselves to sing the praises of the quota system, from the socialist-leaning New Democratic Party through the centrist Liberals led by Trudeau and all the way to the supposedly free market Conservatives.
That is, until recently.
The only person who could break the iron grip of the dairy cartel on Canadian politics could be Trump.
After the Conservatives were kicked out of office…
